A fairer way to fight congestion and raise $21 million more in revenue

November 13, 2019 / Chicago

As many Chicagoans have read, the City has proposed increasing fees on Uber and other ridesharing trips. Uber is not against fees to help ease congestion and fund public transportation. In fact, Uber supports congestion pricing, and in New York we were leaders in pushing for fees on all vehicles — commercial and delivery trucks and vans, personal cars, taxis and ridesharing vehicles. 

Any fee should be equitable and incentivize people to take public transit. That’s why we believe that people who have more options — convenient access to public transit and taxis — should pay more when they choose to take a non-shared ride. People with limited access to other options, such as those who live on the South and West sides, should face less of a burden, especially when their trips go nowhere near congested downtown. 

Unfortunately, the Mayor has proposed focusing solely on Transportation Network Providers (TNPs) like Uber and increasing UberX fees on every Chicago community — not just ones with other transit options.  And so here, we are sharing an alternative proposal that we presented to the City that would achieve their goals in a more equitable way and raise $21 million more than the City’s current plan

Since the City’s proposal focuses only on TNPs, which will likely have very limited impact on congestion, we also propose that the additional revenue be used to subsidize CTA Passes for low-income Chicago residents, sharply increasing the $2 million the Mayor’s proposal set aside for the CTA.  Short of real road pricing, the best way to change people’s behavior towards public transit is to fully fund mass transit.

What is the City’s proposal?

The City proposed a nearly 80% increase on all single rideshare trips, citywide, to $1.25. In downtown Chicago, Monday – Friday from 6am – 10pm, the fee would be $3. Shared rides (such as Uber Pool) during this peak time would be $1.25. At all other times and areas, the fee for a shared ride would be $0.65. 

This proposal will hurt Chicagoans who take trips far from congested downtown. In fact, over the last six months, more than 1.6 million riders who took a trip to or from the South and West sides would have seen a tax increase if this plan had been in place.

How is Uber’s proposal different?

Uber’s proposal is more equitable to Chicago residents who rely on ridesharing because they don’t have access to public transit or taxis. 

While the Mayor’s plan focuses on whether any portion of the trip touches downtown, we think the City should consider both where the rider is coming from and where the rider is going.  

Our proposal looks at both the start and end location of a trip. Under our proposal, the highest tax is placed on trips starting and ending in areas with other transit options. The lowest tax placed on trips that start and end in transit deserts. Trips that both start and end in a transit rich area would be taxed higher than those that only had one point in a transit-rich area. 

The tax zones we proposed

The proposed tax rates for Pick-Ups & Drop-Offs in each zone

ZoneShared RideNon-Shared Ride
High Tax Area$0.425$0.85
Medium Tax Area$0.35$0.50
Low Tax Area$0.25$0.30

What it would look like for riders

Example fee for solo rides:

FromToUber Proposed PriceCity Proposed Price
River NorthWest Loop$1.72$3.00
LakeviewLogan Square$1.72$1.25
AustinLoop$1.17$3.00
PullmanBack of Yards$0.62$1.25

*Note that fees for shared rides would decrease on all trips. This includes the City’s $0.02 administrative fee.

By broadening the definition of “downtown” to include communities with ample access to mass transit, we’re able to lower fees for residents in traditionally lower-income communities. The result is that our proposal would raise $10 million more in revenue than the City’s plan estimates.  And, by applying this same structure to taxi rides, the City could raise an additional $11 million. While the additional $21 million in revenue could be used to plug the budget gap, we believe the City should invest at least half in the CTA by providing subsidies to low-income Chicago residents to purchase rail/bus passes.