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Cabdrivers get financial relief — with everything but a fare hike

Mayor Rahm Emanuel’s plan to boost the annual income of struggling Chicago cabdrivers by as much as $8,000 without raising fares sailed through a joint City Council committee Tuesday amid complaints that the reforms do not go nearly far enough.

“The city needs to do more if we are going to preserve a healthy taxi industry. It is not enough to give our hard-working, mostly immigrant workforce a living wage — nor does it provide an attractive enough income improvement to lure our drivers back from the ride-steal industry they have been flocking to,” said Fayez Khozindar, chairman of the United Taxidrivers Community Council.

One week after aldermen cast a historic vote to raise Chicago’s minimum wage to $13-an-hour by 2019, the UTCC’s Secretary-Treasurer Peter Enger told them cabbies “need a living wage” and won’t get it from the mayor’s plan.

“It is a first step and we’re happy about it. But it will not benefit all cabdrivers. The independent owner-operators who do not pay credit card cashing fees because they process it through their own system and the ones who do not pay leases because they own their own medallions are not getting any benefit at all from this ordinance,” Enger said.

Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee, countered that the sweeping reforms that the Transportation and License committees advanced to the City Council floor for a final vote Wednesday were an “indirect fare increase” without further burdening consumers.

“This is a gigantic step to break the stranglehold the city has put on cabdrivers…It’s an increase without saying it’s an increase,” Beale said.

Earlier this year, the UTCC proposed a ten-point plan that included raising mileage and waiting times by 25 percent. Under that plan, the cost of entering a cab would have remained at $3.25. But the charge-per-mile would have gone up from $1.80 to $2.40, while the waiting time would go to 20 cents for every 24 seconds, instead of every 36 seconds.

Chicago’s $13.80-fare for a five-mile ride with five minutes of waiting time currently ranks No. 32 among the nation’s largest cities and has been frozen since 2005. The proposed change would have pushed Chicago into the top 10.

Emanuel ignored those demands, but embraced many of the group’s other ideas to ease the financial squeeze on cabbies in a heated competition with ride-sharing companies. Those ideas, advanced Tuesday, include:

— Creating a city-wide dispatch system that would require all cabs to carry a new app modeled after the one pioneered by Uber and Lyft. A central dispatch system that includes all 7,000 Chicago cabs — instead of just a few hundred — will make cabs “more competitive” with ride-sharing and improve the quality of service to under-served neighborhoods, according to Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek. An RFP is expected to be issued shortly.

— Reducing lease rates that gobble up nearly 40 percent of driver revenue by 10-to-20 percent — or $2,400-to-$5,600-a-year — and requiring a “lease credit” for all cabs bearing advertising.

— Applying straight fares for residents of suburbs bordering Chicago, only when the trip originates at O’Hare and Midway Airports.

— Increasing from 40 minutes to one hour the window for cabdrivers waiting at O’Hare to return to the airport and go to the head of the line.

— Waiving the $4 tax that bankrolls McCormick Place and other convention activities for short trips.

— Capping credit card transaction fees at 3 percent, instead of 5 percent.

— Reducing by 60 percent — from $1,000 to $400 —the maximum fine that can be levied against cabdrivers for a host of violations

Tracey Abman, associate director of AFSCME Council 31, predicted that the mayor’s reforms would add $5,000-to-$8,000-a-year to the average cabbie’s bottom line.

Earlier this year, AFSCME launched a drive to organize cabbies by releasing a study of their financial plight. It showed that Emanuel’s 2012 overhaul of the taxicab industry had snatched $7,531 out of the average cabdriver’s pocket, dropping annual income to $20,234 or just $5.40-an-hour.

Ald. Danny Solis (25th) said he worked his way through college driving a cab and his father drove a cab in Mexico. Solis called the mayor’s ordinance a perfect sequel to last week’s historic vote to raise Chicago’s minimum wage.

“This mayor is recognizing the value of the working man,” he said.