Uber and Lyft are two ride-hailing companies that operate in Chicago.
Uber has proposed its own version of a tax increase on ride-hailing, saying its proposal raises more money, better addresses traffic congestion and treats the poor more fairly than the plan from Mayor Lori Lightfoot.
Associated Press

Mayor Lori Lightfoot on Wednesday shot down an alternative congestion fee floated by Uber and accused the ride-hailing giant of offering black ministers $54 million to carry the ride-hailing giant’s water.

Lightfoot dropped the political bombshell at a City Hall news conference when asked about the tax plan that, Uber claims, would raise $21 million more than Lightfoot’s congestion fee in part because it would apply to taxis as well as ride-hailing.

“Is this the one where they’re paying off black ministers by $54 million? That one? Or is this a new one?” the mayor said.

“They offered up black ministers $54 million — a one-time deal — if they would convince the mayor to do away with any other kind of regulation. And as we walked these ministers through the realities of what’s actually at stake here, I think they realized that, frankly, they’d been hoodwinked.”

Pressed for proof, Lightfoot said, “I’ve had a number of ministers who’ve met with us and said, ‘Uber promised us $54 million if you [convince the mayor to] back off.’ … We’ll get those names to you.”

As for the congestion alternative itself, Lightfoot shot it down cold. She argued that the company’s plan “doesn’t hold any water and, tellingly, what it doesn’t do is address congestion.”

Mayor Lori Lightfoot talks to reporters after Wednesday’s City Council meeting.
Mayor Lori Lightfoot on Wednesday said Uber is trying to buy support for its alternative fee plan.
Fran Spielman/Sun-Times

“We’re gonna keep seeing Uber throwing lots of Hail Marys, because what they don’t want is to actually be regulated by the city of Chicago because they have had virtually free rein [since] the inception of this new industry,” the mayor said of Uber, whose investors include former Mayor Rahm Emanuel’s brother.

“I am determined to make sure that we get a handle on congestion. And they keep throwing all kinds of things against the wall, claiming that, somehow, this mayor is gonna be against black and brown communities — that we’re gonna do something that has an adverse impact on them. That’s complete nonsense — and that’s the most polite word I can say.”

Uber’s director of public policy Josh Gold tweeted a response to the mayor’s unsubstantiated charge.

“This is categorically false. @chicagosmayor is confusing the $54 million in revenue that one of our proposals would have raised for her own budget,” Gold tweeted.

Uber spokesperson Kelley Quinn added, “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. For months, we worked on a proposal that would have raised more money for the city in a more equitable way.”

Earlier Wednesday, Uber had released its own tax proposal, which it said it drafted with competitor Lyft, saying that besides raising more money and better dealing with traffic congestion, it also would treat the poor more fairly than Lightfoot’s plan.

“This is a genuine good-faith effort to show the city there’s a better way to do this,” Uber public relations manager Harry Hartfield had said at that time. He said the company discussed its proposal with the mayor’s staff Tuesday but didn’t get much support. Its next step is to bring it to aldermen, he said.

Uber proposed dividing the city into three tax zones and applying the tax to both the pickup and drop-off points for either a shared or solo trip. In the high-tax zone, covering downtown and the Near North and Northwest sides, the tax would be 85 cents. For medium and low-tax zones, it would be 50 cents and 30 cents, respectively.

Hartfield said the Uber version would raise $10 million more than Lightfoot’s plan, and $21 million more if it applied to taxis as well. Lightfoot has said her proposal would raise $40 million, of which $2 million would be set aside for mass transit improvements.

The additional money from the Uber plan could all go to mass transit, Hartfield said.

“We know that where mass transit works well, people will use it,” he said. Hartfield said the plan can be implemented using GPS and app technology that pinpoints locations.

The mayor’s proposal calls for a flat $3 tax in single rides ordered in congested areas during peak weekday travel times, increasing it from the current $1.25. Lightfoot aide Lauren Huffman said, “By imposing an increased surcharge on single passenger, downtown ‘luxury’ rides, and offering a discount on shared rides to the neighborhoods, our proposal will not only cut down on the current gridlock downtown, but it will incentivize use of more sustainable transportation options, including the CTA.”

In drafting its plan, Uber tried to apply the lowest taxes to poor communities that have little access to taxis, Hartfield said. “Our general thinking is this is a much more progressive plan. You pay more to go into areas of high demand,” he said.

Lyft supports the plan. “While we continue to believe universal congestion pricing is the only way to truly solve Chicago’s transportation challenges, our proposal is more equitable than the mayor’s plan, and we look forward to working with the mayor’s office and City Council to make it a reality,” Lyft spokeswoman Campbell Matthews said.

Uber provided examples that said the tax on a ride from River North to the West Loop would be $1.72 under its plan versus $3 under the city’s. From Lake View to Logan Square, riders would pay $1.72 under the Uber plan versus $1.25 under the city plan.

Hartfield said the proposed ride-hailing tax would still be the highest in the country.

Under pressure to name names and provide proof of Lightfoot’s bribery allegation, the mayor’s office did neither.

“Uber has put forward a proposal that would generate $54 million, which would only increase their profits and do nothing to solve our congestion issues,” said the mayor’s press secretary, Anel Ruiz, in a statement Wednesday night.

“Chicagoans have been subjected to a misinformation campaign backed by individuals who have been enlisted to do the company’s bidding so Uber can increase its revenues and avoid further regulation by the City,” the statement said.

Ride-hailing tax zone map proposed by Uber.
Ride-hailing tax zones proposed by Uber.

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