Mayor Rahm Emanuel on Tuesday defended his decision to give cabdrivers a 15 percent fare increase but hand ride-hailing companies — which have siphoned business away from the taxis — the lucrative right to make pickups at McCormick Place and O’Hare and Midway airports.
Cabdrivers have accused the mayor of giving away the store to Uber, the ride-hailing giant whose investors include Hollywood super-agent Ari Emanuel, the mayor’s brother.
They have argued that the 15 percent fare increase they have spent 10 years demanding would be small change compared to the motherlode of airport and convention business they would lose after Emanuel gives away their last bastion of exclusivity.
During a meeting Tuesday with the Chicago Sun-Times Editorial Board, Emanuel fired back.
The mayor said his goal is not to decimate an already wounded taxicab industry, but to strengthen it, and more importantly, to give Chicago consumers the choices they demand.
“I’m not giving it to them. I’m not giving it to Uber and Lyft. I’m making sure that the customers in the city of Chicago and its visitors have choice,” Emanuel said.
“Taxi drivers get up to a $10,000 [a-year] pay increase — exactly what they’ve been asking for for years. . . . Things that riders for Uber and Lyft wanted they get, but they have to pay a bigger share on taxes than they’ve ever paid. And our customers — both in the city and visitors to the city — now have choice that they never had before. I consider that a win-win across the system.”
Veteran cabdriver Melissa Callahan has warned that there “won’t be a taxi industry left” in Chicago if Emanuel succeeds in destroying what has become the “last bastion” for cabbies.
Callahan argued that there is no fare increase of any size that would compensate for that loss. Emanuel strongly disagreed.
The mayor noted that there were similar warnings when Chicago became the nation’s first major city to order “regulatory oversight” of the nascent but fast-growing ride-hailing industry.
“Everybody said you’d be killing the ride-share industry in Chicago. It surged. In 2011, when I introduced an increase in the hotel tax, everybody said, ‘You’re going to kill the hotel industry.’ We now have 8,000 more hotels. Cost per room is up. Our visitors and our convention business is hitting records,” Emanuel said.
“It is in a mosaic of things that you do that judgments are made. As other people have questioned certain changes we’ve made, they have actually prospered and the city has prospered because our customers, our visitors, our residents — everybody has had more choice and better service.”
Currently, ride-hailing companies are allowed to drop off passengers at O’Hare, Midway, and McCormick Place, but they leave empty. Pickups are strictly forbidden.
In exchange for the lucrative access, Emanuel wants Uber and other ride-hailing services to pay a $5 surcharge every time they pick up or drop off passengers at O’Hare, Midway, McCormick Place or Navy Pier. The new tax would generate $30 million in new revenue. Cabs pay a $4 ground transportation tax, but only after airport pickups.
To raise an additional $48 million, the mayor’s plan would also slap a 50-cents-a-ride surcharge on cab rides and raise the little-known, 30-cents-a-ride surcharge on Uber and other ride-hailing services to 50 cents.
Emanuel also is following the lead of two powerful aldermen by applying a multiplier to the ride-hailing surcharge, whenever Uber and other ride-hailing services take advantage of periods of peak demand to charge riders even more. If Uber charges triple the normal fare during a snowstorm, the 50-cent surcharge would triple — to $1.50 a ride.
Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee, accused Emanuel of being “way too easy on Uber,” adding, “You know why.”
Beale demanded that the mayor “quit taking a soft approach on Uber and hit ’em with a $1-a-ride surcharge instead of 50 cents and don’t give ’em the airports.”
He added, “If they need to get to the airport, maybe they need to have a chauffeur’s license and the proper insurance to pick up at the airport.”