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Uber Granted Access to Airports in 'Compromise' Worth $48 Million

By Ted Cox | October 26, 2015 12:04pm | Updated on October 26, 2015 6:17pm
 Uber, Lyft and Sidecar will get access to the airports, McCormick Place and Navy Pier next year.
Uber, Lyft and Sidecar will get access to the airports, McCormick Place and Navy Pier next year.
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Uber

CITY HALL — Ride-hailing services were granted access to O'Hare and Midway in a quasi- compromise reached Monday as part of 2016 budget negotiations.

Uber, Lyft and Sidecar were granted access to the airports, McCormick Place and Navy Pier in a deal valued at $48 million in new revenue by Budget Director Alexandra Holt.

The companies will have a 50-cent-a-ride charge hiked two cents, while agreeing to city debt checks aimed to catch scofflaw drivers, as well as significantly higher penalties for violations.

It replaced a counterproposal on ride-hailing sponsored by Aldermen Anthony Beale (9th), chairman of the Transportation Committee, and John Arena (45th).

Beale called it "not a total compromise, but a huge, huge step in the right direction" to "sort of bring them in line with the cab industry."

 Aldermen Roberto Maldonado, John Arena, Scott Waguespack and Roderick Sawyer discuss budget issues ahead of Monday's Finance Committee meeting.
Aldermen Roberto Maldonado, John Arena, Scott Waguespack and Roderick Sawyer discuss budget issues ahead of Monday's Finance Committee meeting.
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DNAinfo/Ted Cox

Beale's original proposal, however, was preferable to Mara Georges, a former city attorney who nows serves as spokeswoman for the taxi industry. It would have called for drivers who work with ride-hailing services such as Uber to have a chauffeur's license to get access to areas that have been the exclusive turf of cabbies.

"What the taxi industry is asking for is parity," Georges said.

Peter Ali Enger, of the United Taxidrivers Community Council, said cab owners pay $14.2 million a year to renew the approximately 7,000 medallions citywide. He said ride-hailing services would pay $15 million if subjected to the same requirement, instead of the $10,000 a year each company pays for all its drivers.

Ald. David Moore (17th) wondered "why we're leaving money on the table."

Commissioner Maria Guerra Lapacek, however, rejected that criticism.

"It is a different business model," she said, adding, "We don't have the capacity to license 20,000 drivers," the number Uber alone has in Chicago, with an estimated 6,300 more with Lyft and Sidecar.

Beale called the deal a "net gain," in that it could potentially fund more police, but Holt clarified that by saying $60 million in revenue would have to be raised to hire more officers. The new surcharge and airport pickups are expected to generate about $48 million, Holt said.

Arena backed the deal as "the best we could do right now" in budget negotiations.

Cabbies, however, weren't satisfied. "This amendment fails to level the playing field between professional Chicago cab drivers who work hard to provide for their families, and giant corporations like Uber that profit from providing the same service without following the same rules," Cab Drivers United said in a statement. “It’s wrong to let big companies carve their own loopholes in laws that require licenses, training, background checks and other basic consumer protections, but that’s exactly what’s happening here."

The new regulations on ride hailing would take effect with the new year if passed Wednesday as part of the 2016 budget.

Several Uber drivers testified they were just trying to make a living, like cabbies, and were simply offering Chicagoans a choice.

Yet taxi medallions are said to be declining in value, and Enger said many cabbies are threatened with bankruptcy.

Cabbie Rick Callaway said they were being undercut and overrun, asking committee members, "How would you like it if all of a sudden there were 300 more aldermen?"

Cabbies and ride-hailing drivers held a raucous news conference before Monday's committee meeting, with the two sides exchanging chants and charges.

They carried that into the Council Chamber until scolded by Ald. Edward Burke (14th), chairman of the Finance Committee.

"We're gonna give everybody the respect they're entitled to," Burke said. "We're not gonna have any hooting or hollering."

Some contentious other revenue proposals were held in committee, pending a final decision on whether the city can expand the homeowner exemption, or instead will offer rebates to homeowners with properties valued at less than $250,000 to minimize the effects of Mayor Rahm Emanuel's record $589 million hike in property taxes.

Arena led a group of aldermen proposing an end to the tax exemptions on tickets to the Chicago Symphony Orchestra and the Lyric Opera, as well as an end to the amusement-tax exemption for horse-drawn carriages.

"The majority of the attendees of the symphony and the opera are from a high-income bracket and can afford to pay a reasonable tax to ensure that Chicago is able to maintain its status as a world-renowned arts hub," said Ald. John Arena (45th), sponsor of those measures. "The Chicago Symphony Orchestra’s CEO earns more than $600,000 annually. If these entities can afford those kinds of high salaries, they can also afford to pay their fair share in taxes."

Arena's Progressive Reform Caucus colleague Ald. Carlos Ramirez-Rosa (35th) also sponsored what he called a "stormwater stress fee" — a tax on so-called big-box stores, shopping malls and skyscrapers that add to runoff by reducing the amount of open ground that can soak up heavy rains.

"This ordinance will reduce water bills for average Chicago homeowners by increasing water bills for non-residential properties like big-box stores," Ramirez-Rosa said.

Along with another proposal — still being prepared for consideration — to raise the fee for restaurant sidewalk cafes to at least $1,200, the progressive caucus estimated its measures would raise $7 million a year.

According to Arena, the mayor has been receptive to considering those as a way to raise revenues to fund a property tax rebate if that's the direction the city chooses to go.

The Council is slated to pass a final 2016 budget on Wednesday.

 

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