Effective January 1, 2020, Chicago will increase its ride-sharing tax going or coming from downtown during peak congestion hours. Single-rides will pay $3 in a congestion tax, currently 75 cents, an increase of $2.25 (300 percent increase).
Ride-sharing outside the Loop, Near North Side and West Loop, will see a 7 percent cut from a tax of 72 cents to 65.
The projected tax revenue will be around $40 million annually, 5 percent of the increased revenue will go to improving the city’s CTA system and the rest will help close the city’s $838 million deficit.
A few things, how was it determined how much tax revenue will be collected annually? For those single riders leaving downtown during peak congestion, how many times will these ride-sharers opt for public transportation? Also, has the mayor determined what specific improvements will be made to the CTA with this increased revenue?
Speaking of the Chicago Transit Authority, if the increased tax revenue is $40 million, why not invest most of that in public transportation? How many single ride-sharers balk at public transportation due to security concerns, lack of cleanliness and unreliability? Even if I were in favor of the new tax for single riders, only $2 million will be used to improve the city’s CTA system may not make much of a difference. It’s like robbing Peter to pay Paul. Anyway, wouldn’t more ride-sharers be more flexible taking public transportation with significant public transportation improvements?
One quick deviation here, many of the buses currently operating in Chicago are just too wide. With tight streets, bicyclists, and parked cars, many buses aren’t nimble enough to get around city obstacles. If they’re more narrowerly designed, this may also help with public transportation challenges.
Getting back to ride-sharing, I find it interesting that only Uber and Lyft are being targeted here under this new proposal. I’m not a frequent user of these platforms nor a proponent but there’s a larger issue here. About 5 or 10 years ago, ride-sharing wasn't commonplace and yet downtown Chicago still had a congestion problem. I can't quantify how much more congested the Loop or the Kennedy expressway is today versus 10 years ago, but congestion has been an issue with Chicago for many years.
Lori Lightfoot was quoted as saying, “Using an evidence-based approach to combat our congestion challenges, Chicago is taking these first steps to improve mobility and further our goals of ensuring sustainable, affordable and reliable access to transportation options in every neighborhood.” Again, I wonder how obtaining $2 million annually will make the CTA more sustainable, affordable and reliable.
Lightfoot’s tax increase is trying to reduce congestion to and from downtown between 6 a.m. to 10 p.m. I think this may be partly a money grab, there’s much less weekday downtown congestion between 6 and 7 am and then between 8 and 10 pm. I get during peak times trying to alleviate some congestion, if indeed that’s the primary reason – would not a surcharge only between 7 am and 7 pm be more appropriate?
I know single women who use public transportation (Metra) to get into the city from the suburbs after 8 pm or so who use Uber or Lyft for security reasons. Because of how the train lines and L stations are designed, they are compelled to arrive at Union Station or the Ogilvie Transportation Center before heading north or west. Having to pay a 300 percent increase in this ride-sharing tax hardly seems fair when taxis and other larger vehicles are not taxed under this new plan.
Opponents of this new tax say it's not just ride-sharing companies that are adding to the congestion to downtown Chicago. Some suggest that a congestion tax applies to ride-sharing companies, taxis, personal autos, and trucks. Indeed, New York City will begin a congestion tax on ride-sharing and taxis in February of ‘20. They will also charge all vehicles coming into lower Manhattan starting in 2021.
I’m glad Mayor Lightfoot is trying to address downtown congestion during weekdays but I suspect it’s not being effectively implemented. A more comprehensive approach may be useful where you tax all vehicles during busy periods. This could include increased parking fees, special vehicle sticker tax on trucks that frequent downtown as well as a tax on taxi drivers. With a more comprehensive approach, mandate these fees collected are exclusively designed for CTA improvements. Without this approach and the fact that only 5 percent of the new tax to be collected, it appears to be a money grab and a temporary band-aid to downtown congestion.