clock menu more-arrow no yes

Filed under:

Reilly proposes minimum wage for ride-hailing drivers

Downtown Ald. Brendan Reilly (42nd) last month introduced an ordinance to limit Uber’s and Lyft’s surge fees to 150% of the regular fare.

Uber and Lyft are two ride-hailing companies that operate in Chicago.
Ald. Brendan Reilly (42nd) proposes Chicago effectively set a minimum wage for ride-hailing drivers.
Associated Press

Downtown Ald. Brendan Reilly (42nd) has already proposed a cap on ride-hailing surge fees to rein in what he called “predatory” charges routinely imposed by Uber and Lyft.

Now he’s trying to protect ride-hailing drivers from being shortchanged.

Reilly on Friday introduced an ordinance that would effectively establish a minimum wage for Uber and Lyft drivers — even if that means raising prices for consumers.

It would require companies licensed as “Transportation Network Providers” to pay drivers “the greater of” $5 per trip, 75% of the total fare collected by the company, or an amount determined by a “minimum earnings calculation” defined by the ordinance.

Using a trip from City Hall to Navy Pier as an example, the minimum earnings calculation would be $6.29, so the driver would earn $15 for completing the trip (75% of the $20 fare).

Every year, the city’s commissioner of Business Affairs and Consumer Protection would adjust the per-minute and per-mile rate based on the consumer price index.

Uber’s Midwest Director of Policy Robert Kellman argued Reilly’s latest ordinance would “actually do the opposite of what he’s proposing.”

“Instead of increasing driver earnings, it would reduce their earnings by as much as 25%. And anyone who votes for this would be taking money out of the pockets of drivers at a time when we should be doing everything we can to encourage them to return to the road,” the company said in a statement.

Lyft had no immediate comment.

Last month, Reilly introduced an ordinance requiring Uber and Lyft to charge no more than 150% of their “current regular fare” during snowstorms and other periods of high-demand.

He told the Sun-Times Friday he was dropping that ordinance “in favor of this, more comprehensive version.”

“It’s a little-known fact, but ride-share drivers receive a fraction of the surge fares that are gouging consumers,” Reilly wrote.

“The new ordinance still imposes a 150% cap on surge pricing. But it also seeks to improve safety and compensation for ride-share drivers.”

Reilly said the new ordinance is patterned after a 2018 New York City law that, he claimed, “didn’t result in higher prices for consumers on average.”

“It forces Uber to take a haircut on its portion of the fare which, in some cases, is as much as 65% of the total fare,” the alderman wrote.

“That’s Uber’s problem — not ours. Drivers need to be treated better. And there needs to be more transparency around who actually gets how much of that fare. This ordinance will accomplish those goals while protecting consumers.”

The new ordinance was applauded by Lori Simmons, an organizer with The People’s Lobby.

“We are excited that Alderman Reilly is motivated to provide protections for gig workers. We have been on the frontlines keeping the economy open throughout the pandemic, all while Uber and Lyft continually lowered our pay and did nothing to keep us safe on the job,” Simmons said in a news release.

Ride-hailing driver Mike Crissman was happy about the new and stiffer penalties Reilly proposes against anyone who assaults someone with a public chauffeur’s license.

“Thankfully I am OK because of the divider I installed during COVID, but I was nearly carjacked two weeks ago,” Crissman said in a new release.

“It was a terrifying experience and so many of us are afraid to drive. We need a comprehensive measure that will protect drivers and hold companies accountable [for] paying us what we deserve.”