Chicago Considers Congestion Charges, Starting With Uber/Lyft

Matt Posky
by Matt Posky

Chicago is considering sticking ride-hailing services like Uber and Lyft with a new tax that would add a few bucks onto each ride. Mayor Lori Lightfoot has proposed a $40-million-per-year tax increase as part of a broader traffic plan modeled after London’s famous congestion fines. That means not all rides would be subject to the same fees, but each trip taken within the city would still cost a little extra.

While congestion charges are all the rage in Europe, they’re uncommon in the United States. New York City recently decided to financially penalize every driver taking a trip below 60th Street (something I’m not thrilled about), positioning Chicago as the second major metropolitan area in the U.S. to move forward on congestion fees. Lightfoot claims it’s a necessary first step “to improve mobility and further our goals of ensuring sustainable, affordable and reliable access to transportation options in every neighborhood.”

Currently, Chicago mandates a flat 72-cent fee per ride. According to Crain’s Chicago Business, the new congestion pricing would tack on a minimum of 53 cents a trip — with some trips downtown adding as much as $3.00. Some of the revenue would be diverted into the Chicago Transit Authority (CTA) to establish priority bus zones on the South and West sides. Higher fees could also encourage residents to take public transit more often, especially for trips downtown.

From Crain’s Chicago Business:

However, most of the proceeds will go to the city’s general treasury, helping Lightfoot close a $838 million gap in the new budget she’s scheduled to unveil next week.

The proposal is expected to draw strong opposition from ride-hailing companies. “This is not something they are pleased with,” Rosa Escareño, commissioner of the city’s Department of Business Affairs and Consumer Protection, told me after giving the firms a briefing on the plan. “No business likes to see fees imposed on them. But (congestion) data is very telling.”

“The mayor’s proposal amounts to by far the highest ride-sharing fee in the country and 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 spokeswoman Kelley Quinn said in an email. “As a candidate, the mayor said she was committed to equity, yet she is proposing to hike taxes by nearly 80 percent on underserved communities who do not contribute to congestion and lack reliable access to transportation.”

The only occupants who would not be subject to elevated fines are those sharing rides (à la Uber Pool, which drivers hate). Crain’s said they’ll be limited to the minimum fee, unless their journey begins or ends downtown. Other rides would endure a higher tax. Single non-stop rides outside of downtown and shared rides to or from downtown would come with a $1.25 fine, up from 72 cents. Meanwhile, those traveling exclusively between downtown neighborhoods would be subject to the largest tax of $3.00 per trip.

Lightfoot’s plan still requires City Council approval to become a reality. Assuming that happens, she said it would be the first phase of a broader congestion strategy for the city.

TRAFFIC CONGESTION & SUSTAINABLE TRANSIT: Mayor Lightfoot announces new regulations to mitigate congestion driven in part by ride-hailing companies, incentivize sustainable transportation, and raise $40 million in new revenues for the city .

— Mayor Lori Lightfoot (@chicagosmayor) October 18, 2019

[Image: F11photo/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • TomLU86 TomLU86 on Oct 21, 2019

    Chicago and Illinois epitomize-but by no means are unique--what is wrong with our country: spending beyond our means. Economics is not a science, though economists think they can 'manage' things. Basically, if you want more (stuff, services, whatever), you pay more. Perhaps you can get much more for a little more, but it will cost you more. Sometimes you can get more for less--computers. But even there, are you really saving money? Can you get an iPhone for less than you could 5 years ago? Or a laptop? Not really. You get more 'power', but you pay the same or more. So, here is my point: up to about 50 years ago, America's economy created enough wealth to provide for most people--and even to provide for an incredibly expensive stupid, moronic wasteful war. But wait--back then people had less and wanted less. Yet as America aged, our "wants" increased--just as our economy's ability to produce the wealth necessary to pay for them was starting to level off. So now, pretty much everyone is in the hole. Federal govt. State. Local. Most AMericans. And if you actually are prudent and are not--well, don't feel too smug, because all this debt will prove toxic, and it will erode or destroy your savings---which basically represent your choice to go without something yesterday or now, in order to have something tomorrow. It's quite depressing. We are drowning in gimmicks. Just reading about Connectictut, or Illinois, or the local news. Michigan's roads are crumbling. We probably have 1,000 Flints in this country that need their water infrastructure fixed. Even Joe Biden has joked about LaGuardia being a 3rd world airport. Even our gasoline is messed up....we subsidized farmers to grow ethanol, which trashes our cars, wastes food, and increases our cars' fuel consumption. It's a gimmick that benefits a few at our expense. Remember, the top 1% always gets theirs. 50 years ago, they could get theirs and the pie was big enough for the rest of us--white-collar, blue collar, stockholder, pensioner, state govt, fed govt. But now, the pie hasn't grown enough, so the top uses gimmicks to get theirs, and rest of us pay more for less. And as the mob mentality picks up speed, the idea of 'don't tax you, don't tax me, tax the other fellow behind the tree', things will get worse as we run out of other fellows. Any candidate who states these truths will never win, because the right will say "he's overtaxing you" and the left will say "she's cutting your deserved benefits" and people will believe that. USA = empire of delusion. Sorry. Oh, I'm a vet by the way, and I was NOT drafted.

  • Jeff S Jeff S on Oct 21, 2019

    @tomLU86--Agree, good points. I get sick of hearing tax the rich. What happens is the real rich don't pay and those who are doing well but not rich are the ones that pay more. As for the ethanol it costs the consumers not only in tax subsidies but more for repairs and replacement from damages from its increased use.

  • Dave Has to be Indy 500. Many more leaders and front passes than NASCAR, and Monaco is unwatchable with the inability to pass on that circuit.
  • Jeff How did the discussion get from an article about a 56 billion dollar pay package for Elon Musk to a proposal to charge a per mile tax on EVs in California or paying increase registration on vehicles to make up for lost gas tax revenue? I thought such a discussion would better fit Matt's Gas Wars series.
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  • Urlik Not a single memorable thing happened in the big three races this weekend IMHO.
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