Chicago congestion tax on rideshare trips takes effect

CHICAGO (WLS) -- A new tax went into effect Monday morning that takes aim at congestion in Chicago. It will affect you if you rely on a rideshare service like Uber or Lyft to get around town.

Starting Monday, a new city tax increases a single ride from $0.72 per trip to $1.25. If your trip begins or ends in the downtown area on weekdays between 6 a.m. and 10 p.m., an additional $1.75 surcharge will be added. That's an extra $3 a ride for weekday solo riders in the Loop.

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Some people feel like they are being hit by too many fees in the New Year, while others feel it will lead to less traffic and pollution in the city.

"Every year is always so expensive," said Jessica Torrevillas. "I mean we have a lot of businesses leaving Illinois anyways because of all the taxes, you know, it's getting harder and harder to live here."

"Uber and Lyft I think are sort of a luxury so it's something that I would support end though it's probably going to cost me some extra money on a day to day basis," said Alex Shek.

Mayor Lori Lightfoot said it's to address the rampant congestion downtown and encourage shared rides throughout the city. The city is launching a hashtag "Choose Shared" campaign to inform people.

"I get that and I think that it will help alleviate some of the congestion, but I am less likely to share a ride just because I have had some bad experiences with that before," said Emily Pizzimenti.

The city says a majority of rideshare passengers on city's South and West sides will see their rideshare rates decrease. That's because the city says the majority of users hailing to and from the neighborhoods rely upon shared versus single-rider trips.

Meanwhile, Uber and Lyft believe the mayor's proposal amounts to by far the highest ridesharing fee in the country and will take money out of riders' pockets.

"It's probably going to affect my bottom line. It's going to have an impact on the number of drivers I take on a daily basis now," said Larry Akintola, an Uber driver.

While the new tax will generate revenue, the city is hoping it will help reduce congestion. Surcharges for shared Uber and Lyft Rides will be much less.

"The goal is in the most congested parts in the city, in the middle downtown, is to encourage people to use different modes that makes the city a better place to live," said Kyle Whitehead, of the Active Transportation Alliance.

The congestion tax is expected to generate $40 million annually. The money will go towards closing the deficit and transportation, including the CTA.

BREAKING DOWN THE NEW CONGESTION TAX

Citywide single
Current: 72 cents
New tax: $1.25
Difference: +53 cents

Citywide shared

Current: 72 cents
New tax: 65 cents
Difference: -7 cents

Downtown zone single with surcharge
Current: 72 cents
New tax: $3
Difference: +$2.28

Downtown zone shared
Current: 72 cents
New tax: $1.25
Difference: +53 cents

Airports, Navy Pier, McCormick Place
Current: $5

Proposed: $5

Difference: Same
CITY OF CHICAGO CONGESTION REPORT HIGHLIGHTS

1. Between 2015 and 2018, the annual number of TNP* trips in Chicago has grown 271 percent, and the TNP miles traveled with passengers have increased 344%.

*TNP stands for Transportation Network Partners, their term for ridesharing companies.

2. Half of all trips citywide begin or end in the downtown area, and nearly a third of those trips both start and end in the downtown area.

3. TNP trips in the downtown area on weekdays between 6am and 10pm increased 309% between 2015 and 2018.

4. Approximately 26 miles of road space is occupied in the downtown area by TNPs during a typical evening rush period

5. TNP trips are a significant contributing factor to CTA ridership loss.

6. The influx of TNP trips during rush periods in the downtown area are a substantial factor impacting CTA bus speeds." (p. 2)

CLICK HERE to read full report

FULL STATEMENT FROM LYFT
"The Mayor's proposal shows a total misunderstanding of what causes congestion and how Chicagoans are moving around the city. By adding on to the highest fees in the nation to rideshare, the Mayor is clearly backtracking on her campaign commitments to not increase fees that hurt low-income Chicagoans most. Lyft will strongly oppose fees that reduce affordability and reliability while doing nothing to improve mobility."

FULL STATEMENT FROM UBER
"The Mayor's proposal amounts to by far the highest ridesharing fee in the country and will take money out of the pockets of riders, who rely on apps to get around, and of drivers -- half of whom live in the south and west sides of the city. As a candidate, the Mayor said she was committed to equity, yet she is proposing to hike taxes by nearly 80% on underserved communities who do not contribute to congestion and lack reliable access to transportation."
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