Uber and Mayor Lightfoot battle over raising ride-hailing fees and congestion

Mayor Lori Lightfoot and Uber are battling over the 2020 budget’s proposed ride-hailing fee structure.

After a City Council meeting to review the city’s budget, Lightfoot claimed Uber attempted to derail the ride-hailing tax by offering black ministers $54 million to come out against her plan.

Uber quickly denied this, saying in a statement: “The Mayor is entitled to her own opinion, but not her own facts. Weeks ago, we shared a proposal that would have raised $54 million more for the city—she is confusing this figure.”

Uber says Lightfoot’s plan “will have very limited impact on congestion.” And the mayor says Uber’s recommendations “don’t hold any water” and don’t address congestion, either.

It’s true the city needs to raise a millions in revenue, even after department restructuring and cuts—and adjusting an existing tax is much easier for the mayor than creating a new one.

The mayor’s plan makes single rider trips more expensive and shared rides in neighborhoods slightly less expensive than the city’s current flat fee of 72 cents. (This is a breakdown of the proposed fee structure and special downtown zone.)

Lightfoot blames downtown’s congestion on the rapid increase in ride-hailing trips. According to data gathered by the city on Transportation Network Providers (which includes Uber, Lyft, and Via): 82 percent of trips had one passenger, 10 percent had two, and 7 percent had three. Plus, mayor’s office said that ride-hailing trips have increased by 271 percent from 2015 to 2018.

Other contributors to traffic such as taxis, delivery trucks, and personal cars aren’t included in Lightfoot’s plan. To truly address congestion, Uber says, these vehicle types need to be taxed too. The company supports congestion pricing, like what will be implemented in New York City, but has an issue with ride-hailing companies being singled out under Lightfoot’s proposal.

By fighting this proposal, Uber is aiming to protect its profits, writes Streetsblog editor John Greenfield: “So they’re fighting it with a cynical propaganda campaign, trying to convince Chicagoans that the measure would damage the economy and hurt lower-income residents.” On Monday, he fact-checked a misleading op-ed published in Crain’s by Uber proxies.

Ultimately, both Lightfoot and Uber have their own agendas which makes developing smart policies difficult. Addressing the city’s congestion problems and declining ridership on public transportation is complicated—both issues compounded by an immense budget gap.