A new ordinance introduced on Nov. 17 that could potentially generate more than $70 million in revenue for the city has some taxi drivers fed up.
Co-sponsored by Aldermen Edward Burke (14th Ward) and Carrie Austin (34th Ward), the ordinance would impose a $1 surcharge on each taxi ride within the city limits.
This is in addition to the 50 cent surcharge added when gasoline prices rise above $2.70 a gallon for seven consecutive business days.
According to Jack Nichols, a 51-year veteran in the taxi business and current manager of Flash Cab, the ordinance would amount to a tax on cabbies, leading to smaller tips.
“The customer is not going to pay any more for the dollar surcharge,” Nichols said. “Usually if they paid $20 before, including a $3 tip, they’d just give you $20. Basically where most of [the surcharge] would come from would be the drivers tip.”
Burke, finance committee chairman, and Austin, budget committee chairman, proposed the ordinance to increase revenue for the ailing city economy, but it largely leaves drivers out of the benefits.
None of the proposed $70 million in revenue would go to the already struggling taxi business, which had previously asked city council for a 22 percent fare hike in order to offset rising costs.
“It is incumbent upon members of the Chicago City Council to find revenue-generating solutions to our chronic budget crisis,” Burke said in a written statement on Nov. 19. “This is one area worthy of close examination because of the large amount of additional funding that could be raised to
help offset a steep drop in revenue caused by a weak economy.”
According to Burke and Austin, at an average of $13.22 for a five-mile trip, Chicago already has the lowest fare rate out of the country’s three largest cities. Even with the $1 surcharge, the city would remain the lowest in comparison to cities such as Los Angeles, New York City and Boston, which all have rate averages for the same distance upward of $15.
“Many other major cities across the nation already charge more for cab rides,” Austin said in a Nov. 19 press release. “The city of Chicago needs to determine if higher fares could be absorbed to help balance our city budget.”
Though the ordinance states the ultimate liability for the surcharge will be on passengers and not cab drivers, many cab drivers see the proposal as a tax on their income and a way for their tip money to be funneled into the city’s pocket.
The weak economy and the proposed surcharge will cause drivers to receive less money, according to Will Aseyo, a taxi driver of 10 years, who said this is the worst it’s been for drivers since 9/11.
“Drivers are asking for a wage increase, but [aldermen] want to add a dollar extra to fares,” Aseyo said as he waited outside the Hilton Chicago, 720 S. Michigan Ave.
“[The surcharge will] make it worse for drivers and for consumers.”
Under the surcharge ordinance, drivers would be required to collect the surcharge fee and remit all collections to the city treasury, which would be credited to the city corporate fund.
Every driver will be required to keep records of collections, which will be subject to inspection by the Department of Business Affairs and Consumer Protection, as well as the Department of Revenue.
“It’s very bad,” said Asif Mohammed, a driver of 13 years, who agrees that the economy has had an affect on wages and the ordinance will further affect drivers’ tips negatively. “There are too many factors—this is the worst it’s been,” Mohammed said.