Lightfoot unveils $40 million congestion fee on solo ride-hail trips; downtown rides take biggest hit

Uber, Lyft and Via passengers who ride solo would pay higher taxes — and face a hefty surcharge for riding alone downtown — under a $40 million mayoral plan intended to cut congestion.

Mayor Lori Lightfoot is following through on her promise to impose a “congestion tax” on ride-hailing companies flooding the streets of the Central Business District, the Near North Side and West Loop.

“For individuals who are taking single rides and causing the congestion, this is truly a luxury. If you have other options and you’re choosing to take a vehicle by yourself, it’s like having your own private chauffeur,” said Business Affairs and Consumer Protection Commissioner Rosa Escareno.

Chicago’s current 72-cent flat, fixed charge for each ride booked on Uber, Lyft and Via “does not fully support the goals of equity and reducing congestion and green-house emissions,” transportation experts from the Metropolitan Planning Council and seven other groups have told the mayor.

They’ve advocated a higher fee downtown, with a heavy emphasis on passengers riding alone.

That’s precisely what the mayor has in mind.

Her plan calls for:

• A new “downtown zone surcharge” that amounts to $1.75 per-trip for single rides and 60 cents-per-trip for shared rides. The surcharge would apply to rides taken between the hours of 6 a.m. and 10 p.m. on weekdays, when congestion is most prevalent. That would raise the total fee for solo trips in the downtown zone from 72 cents per ride to $3.

The downtown zone would stretch from North Avenue to Roosevelt Road and from Lake Shore Drive on the east to a jagged western boundary that includes the North Branch Canal from North to Grand Avenue; Ashland Avenue from Grand to Van Buren Street; and Desplaines Street from Van Buren to Roosevelt.

• Increasing the city’s ground transportation tax to $1.13 on all solo ride-hailing trips citywide — an 88% hike.

• Reducing the ground transportation tax to 53 cents on shared ride-hailing trips citywide; that’s a drop of 11.6%.

The current ground transportation tax is 60 cents per trip citywide and $5 per trip to and from McCormick Place, Navy Pier and O’Hare and Midway airports.

Together, the changes are expected to generate $40 million for the city’s deficit-laden 2020 budget.

The mayor plans to dedicate some of that to mass transit improvements. That includes investments in seven “Bus Priority Zones” on the South and West sides.

The initial steps will tide the city over pending a long-term study on how a more complicated and broader London-style congestion fee might work in Chicago.

The decision to focus only on ride-hailing will not sit well with an industry that, the city claims, has nearly tripled in recent years.

Rich Hein/Sun-Times

Uber CEO Dara Khosrowshahi has argued the ride-hailing giant is not the main culprit for Chicago congestion, noting there are “only 1,400 Ubers on the road” in Chicago — “around three percent of miles driven.” He has argued the city’s solution should target “the whole ecosystem” — and not “one small part of congestion.”

City Hall is armed with data, too: nearly half of all citywide ride-hailing trips begin or end in the downtown area; one of every three of those trips start and end downtown; and a majority Uber, Lyft and Via trips are solo rides.

“This is a problem that the mayor identified pretty early as something that is ... slowing down everything, including CTA, leading to wear and tear on the roads and really kind of mucking up the overall system,” said Lightfoot’s policy chief Dan Lurie.

The idea is to provide incentives “to take mass transit, to take CTA where possible and to take shared rides, which are much more efficient,” Lurie said. “And if they insist on taking a single ride ... we wanted to put more price into that decision.”

Escareno added, “Our goal was to continue to incentivize shared rides and also to ensure that, in the communities...where we are seeing shared rides actually happen, that we are also providing a slight discount there.”

As part of the mayor’s plan, the city’s Department of Business Affairs and Consumer Protection will seek additional data from Uber, Lyft and Via — on driver compensation, total passengers per trip and miles traveled with no passengers, waiting for the next call.

The decision to raise the ground transportation tax on all solo ride-hailing trips citywide is also controversial.

Earlier this week, African American ministers wrote to Lightfoot, urging her to limit additional fees to “areas where congestion is a concern, where transit access if plentiful and where riders can afford to pay more.”

The letter, signed by pastors William Turner, James Boyd, Otis Allen, Darryl Russell and Ira Wheaton continued:

“We have been taxed enough and you ran on a platform of no more taxes for low-income families.”

Uber branded Lightfoot’s proposal “by far the highest ride-sharing fee in the country.”

It amounts to a nearly 80 percent increase on the South and West Sides and more than triples taxes and fees during peak hours in the downtown area, the company said.

“The Mayor’s proposal ... will take money out of the pockets of riders, who rely on apps to get around, and of drivers — half of whom live in the south and west sides of the city,” Uber said in a statement.

“As a candidate, the Mayor said she was committed to equity, yet she is proposing to hike taxes by nearly 80% on underserved communities who do not contribute to congestion and lack reliable access to transportation.”