A city street lined with tall buildings and a large theater marquee. Shutterstock

The mayor’s 2020 budget includes a big change in the transportation tax, a fee that’s tacked onto ride-hailing services in Chicago.

At the end of August, the mayor announced an $838 million budget gap and, after weeks of tweaking cost-cutting and revenue-raising proposals, the City Council passed the new legislation at the end of November. The new ride-hailing fee will be the highest in the nation and start on January 6.

Under former Mayor Rahm Emanuel, the transportation tax was a flat fee of 72 cents per Uber or Lyft trip. Now, single rider trips citywide will have a $1.25 fee and those in the designated downtown zone will have a $3 fee. A shared trip in the downtown zone would have a $1.25 fee. Shared trips in neighborhoods, outside the downtown zone, will have a fee of 65 cents.

The downtown zone fees would apply between 6 a.m. and 10 p.m. in an area that covers the Loop, River North and a portion of the West Loop. The boundary streets include: Lake Shore Drive, Roosevelt Road, Desplaines Street, Van Buren Street, Ashland Avenue, Grand Street, North Branch Canal, North Avenue.

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.

Chicago’s traffic has only worsened in the 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 rideshares: 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 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 pushed hard against the new fees, claiming that it wasn’t a true solution to congestion and downtown traffic. The transportation tax doesn’t include taxis or address the increasing number of delivery trucks, it said. The ride-hailing company even filed a lawsuit against Skokie for its fees, foreshadowing the struggle that could eventually come to Chicago.

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