Aldermen want proposed Uber surcharge to surge during surge pricing

SHARE Aldermen want proposed Uber surcharge to surge during surge pricing

Two of the City Council’s most powerful aldermen moved Friday to level the playing field between ride-hailing services and taxicabs — by slapping an escalating surcharge on surge-pricing during periods of bad weather and peak demand.

Finance Committee Chairman Edward Burke (14th) has already persuaded Mayor Rahm Emanuel to include a $1-a-ride surcharge on ride-hailing services in the massive package of tax increases included in the mayor’s 2016 budget.

Now, Burke and Transportation Committee Chairman Anthony Beale (9th) are upping the ante — by proposing to raise the surcharge whenever Uber and other ride-hailing services take advantage of periods of peak demand to charge riders even more.

If Uber charges triple or quadruple the normal fare during a snowstorm, the $1 surcharge will triple or quadruple, Beale said. Whatever multiplier they use to “gouge” consumers, the city will apply that same multiplier to the $1 surcharge to “gouge” them right back.

Beale said his goal is to level the playing field with struggling cabdrivers whose fares are regulated by the city and are prohibited from charging more when demand is high.

Won’t consumers pay the price for the higher surcharge?

“I don’t know if ride-share is going to take the hit, if they’re going to pass the hit onto the driver or if they’re going to try to pass it onto the consumer. That’s for them to figure out,” Beale said.

“If they see the error of their ways and stop doing it, then God bless ’em.”

Uber Technologies is “opposed to any regressive plan that would eliminate driver jobs,” spokeswoman Brooke Anderson said in an emailed statement.

“By instituting the highest rider tax in the nation, this proposal makes it more expensive for Chicagoans in every neighborhood to get a ride, especially in areas that can least afford it. As a result, drivers will earn less and have fewer economic opportunities,” the statement continued. “We urge the City to consider progressive revenue options that don’t cut jobs.”

Earlier Friday, Burke scoffed at Uber’s suggestion that a $1-a-ride fee on Uber and other ride-hailing services would kill the job- and revenue-generating golden goose that ride-hailing has become.

“It seems to me I heard that same argument when I was proposing a smoking ban in Chicago maybe 20-plus years ago,” said Burke, the City Council’s most powerful and longest-serving alderman.

“It didn’t become any detraction to the restaurant industry or the night life industry in Chicago and people are healthier. Our atmosphere is cleaner and safer as a result. So, those kinds of arguments don’t resonate with me.”

Burke noted that he first proposed a $1 surcharge on Chicago taxicab rides in 2007 — before Uber and Lyft existed. At the time, he estimated that the surcharge could raise as much as $80 million a year for the cash-strapped city.

“It was a lot easier to propose a $1 charge on the flag pull. It’s going to be a little bit harder to try to apply that to Uber, but I’m sure that it can be worked out,” Burke said.

“It might give us an opportunity to start talking about what could be done to make sure, if this industry . . . is growing by the day, that they pay their fair share, which they’re not doing right now.”

As the Chicago Sun-Times first reported last week, Mayor Rahm Emanuel is poised to raise property taxes by a record $500 million property tax increase for police and fire pensions and school construction and impose a garbage-collection fee, a tax on smokeless tobacco products and a $1-a-ride surcharge on Uber and other ride-hailing services.

City Hall sources said the $1 surcharge on ride-hailing services would be part of a broader package or reforms aimed at saving Chicago’s taxicab industry.

That prompted Uber to come out swinging against the $1-a-ride fee.

“It’s clear the city’s proposed rider tax would slow economic growth in Chicago and take money out of drivers’ pockets at a time when jobs and growth are needed the most,” Anderson wrote in an emailed statement released earlier this week.

Uber argued that it is “on track to pay more than $7 million in taxes and fees” to the city in 2015 alone, a figure that could grow to $11 million in 2016.

The company claims to employ 200 full-time employees in its Chicago office and more than 20,000 drivers who earned more than $200 million on the Uber app over the last two years.

Uber is also in the process of recruiting 10,000 additional drivers in South and West Side neighborhoods chronically underserved by taxicabs. The $1-a-ride-surcharge would make it difficult for Uber to meet that goal because it would depress demand by making it “more expensive to ride” in Chicago, the company said.

During budget briefings, aldermen appeared to be united in their desire to stop giving Uber a pass and start giving Chicago taxpayers a cut of the action.

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