Chicago’s most powerful alderman is resurrecting his stalled plan to slap a $1 surcharge on taxicab rides — and adding ride hailing companies that have siphoned business away from cabs to the mix — to chip away at the city’s $30 billion pension crisis.
Five years ago, Finance Committee Chairman Edward Burke (14th) and Budget Committee Chairman Carrie Austin (34th) proposed that cab riders whose trips originated in Chicago pay a $1 surcharge to generate $70 million in revenue for the city budget.
Cabdrivers struggling for survival were furious. They had already been waiting five years for a fare increase. They couldn’t believe the City Council would even consider raising fares, but leaving cabdrivers out in the cold. The idea went nowhere.
Now, Burke is renewing that stalled proposal, but extending it to ride hailing companies to avoid putting cabdrivers at an even bigger disadvantage.
Chicago’s one-year-old ride hailing ordinance does not regulate ride hailing fares or “surge-pricing” and does not restrict the number ofcompanies, vehicles or drivers that could operate on Chicago streets.
But, it does require ride hailing companies to report to the city on the number of rides they provide. That’s because it creates a two-tier system that allows part-time drivers to escape rigid screening.
That’s a system that could be used to impose the $1 surcharge and determine how much money the ride hailing companies, whose investors include Mayor Rahm Emanuel’s brother, would owe the city.
Burke refused to comment on the surcharge idea, passed along to Emanuel during a private meeting and tipped by the mayor during an interview this week on the WTTW-Channel 11 program, “Chicago Tonight.”
Uber spokesperson Brooke Anderson refused to comment on the surcharge proposal.
Emanuel has moved his 2016 budget unveiling up a month — to September — and urged aldermen to offer cost-cutting and revenue-raising ideas to confront the massive pension crisis.
Revenue-raising and cost cutting ideas have already started pouring in. They range from a city income tax, a gas tax and authorizing video poker in Chicago to a suburban-style garbage collection fee, a 30 percent tax on smokeless tobacco and legalizing and taxing the recreational use of marijuana.
Two mayoral allies have also proposed a ground-breaking, $3.3 million change that would repeal the so-called “grandfather clause” that has allowed more than 1,800 multi-unit residential buildings to continue to get free city garbage pick-ups that were phased out for most other multi-unit buildings in 2000.
Burke and Austin first proposed the $1 taxicab surcharge in November, 2010. It was the same day the City Council approved a city budget that was then-retiring Mayor Richard M. Daley’s last — precariously balanced with parking meter reserves and other one-shot revenues.
“Many other cities across the nation already charge more for cab rides. Chicago needs to determine if higher fares could be absorbed to help balance the budget,” Austin said on that day.
Burke said he proposed the idea to help offset a $1 billion drop in city revenues.
“It is incumbent upon members of the Chicago City Council to find revenue-generating solutions to our chronic budget crisis. This is one area worthy of close examination because of the large amount of additional funding that could be raised to help offset a steep drop in revenue caused by the weak economy,” he said then.
At the time, the average fare for a five-mile trip was $13.22. Since then, Emanuel has made permanent a temporary $1 fuel surcharge. But, he has refused to raise Chicago taxicab fares frozen since 2005 that currently rank No. 32 among major cities.
Instead, the mayor has devised other ways to put more money into the pockets of struggling cabbies. They include creating a centralized dispatch system using a “universal taxi smartphone application” akin to ride hailing and cutting lease rates, fines and credit card transaction fees that gobble up driver income.
Many of the ideas originated with the taxicab industry after hard-fought negotiations over a ride hailing ordinance that, cabbies insist, did not go nearly far enough to protect them.
Last week, Ald. Pat Dowell (3rd) introduced a resolution demanding City Council hearings to determine how to level the “uneven playing field” between taxicabs and ride hailing companies that has caused medallions prices and driver incomes to plummet.