Chicago’s new ride-hailing tax begins now, and it’s the country’s highest fee

The mayor’s new transportation tax is now in effect, which means Uber and Lyft riders will now pay more for trips downtown.

In 2019, Mayor Lightfoot eliminated the flat fee of 72 cents. Replacing that fee is a tiered structure which was approved in November and is the highest tax in the nation.

The 2020 fees are meant to incentivize public transit options and shared trips. The highest fees, $3, will be for trips that start or end in a designated downtown zone. All trips in a private car, like an UberX, will have a $1.25 surcharge. The new legislation lowers the fee on shared trips, like Uber Pool or Lyft Line, to 65 cents. Although, shared trips to the downtown zone will be increased to $1.25.

After looking at ride-hailing data, the mayor’s office found that areas with intense congestion also had an abundance of public transportation. Chicago’s traffic has only worsened in recent years and ranks as one of the top cities most affected by congestion in the country.

“We don’t have a rush hour. We have a rush day,” Lightfoot told the Chicago Tribune during an editorial board interview. “It’s a challenge for mobility, it’s a challenge for pollution, it’s a challenge for the stress on our infrastructure.”

She elaborated on issues with ride-hailing: lots of single-person rides from downtown and ride-hailing drivers idling downtown waiting for the next ride. These situations add to congestion, make it difficult for downtown buses, and cause pollution, the mayor said.

The city hopes this new structure will generate up to $40 million yearly in new money. The CTA will get an additional $2 million to help improve the bus service with bus-only lanes on major routes.

Transportation advocates initially pushed for comprehensive congestion pricing, similar to what New York City will implement. However, it is easier to tweak an existing tax than create a new one that would need approval from Springfield.

The budget also provides some financial help to cab owners by lowering the license renewal fee from $1,000 to $500 every two years. Mayor Lightfoot has railed against Uber, but has said she supports taxi cab drivers.

The budget also provides some financial help to cab owners by lowering the license renewal fee from $1,000 to $500 every two years. Mayor Lightfoot has railed against Uber, but has said she supports taxi cab drivers.

Uber and Lyft opposed the fees. Uber pushed hard against them, arguing that the tax is solely a revenue play and won’t alleviate congestion. Uber has said its in favor of comprehensive congestion pricing that would tax delivery vehicles, trucks, and taxi cabs in addition to ride-hailing services. The ride-hailing company even filed a lawsuit against Skokie for its fees, foreshadowing the struggle that could eventually come to Chicago.