Having seen a loss of $40 million in public transportation revenue, Chicago Mayor Rahm Emanuel has presented a plan on raising taxes on non-public transportation services, namely Uber and Lyft. Despite improvement in cab drivers’ pay and minor increase of fees against the ride-hailing sector, the Mayor has decided to raise the ground transportation tax, which was passed in 2015 to make up the deficit caused by a decrease in use of bus and train riders.
The city stated that the tax collected $60 million last year and the new raise is expected to collect $85 million, between 80 and 90 percent of it coming from those sectors. However, the previous collection has failed to offset the deficit due to a lack of tax, license, and permit fees, loss of tax revenue from public garages, cars, and leases, and a reduced charged in airport ‘sparking sections.
Uber has denied that they are responsible for this decline, stating they have been taxed at almost $190 million the past year. Lyft has also given the same reason while stating that Chicago is already the highest taxed ride-hailing sector in the country and that raising them again is unfair.
Uber recently defended their work by revealing their annual statistics where its 30,000 drivers made $210 million in 2016. Uber & Lyft is also opposed to the plan that forces all drivers to be fingerprinted for the FBI’s background check because it can be discriminatory to the many drivers who are from minorities. Chicago officials refute their concerns, stating the tax wouldn’t hurt their business while the fingerprint plan is for the public’s safety.
At the moment, Mayor Emanuel is working to fix a budget including multiple tax and fee raises in order to cover the $260 million deficit expected to come in next year’s budget. It has yet to re-determined when the vote will take place at City Hall.