This week, Emanuel pitched several reform ideas to the city council in an
attempt to ease some of the restrictions and financial fees on cab drivers.
Among those ideas was a plea to reduce lease rates for cab drivers by 10 to 20
percent — a reduction that would save drivers $2,400 to $5,600 a year. It would
also require a credit for cabs that bear advertising, ensuring drivers got to
take home some of the revenue from selling ad space on their car.
Emanuel also pushed for the creation of a citywide mobile phone app similar to
the kind utilized by ridesharing companies to increase ease of use and
accessibility for customers looking for a taxi.
In addition, the city’s proposal would cap credit card transaction fees at three
percent rather than five and reduce many of the maximum driver violation
penalties from $1,000 to $400.
Anthony Sanders is an attorney at the Institute for Justice, a firm that deals
with taxi and ridesharing cases across the country. He says the competition
between the two groups in Chicago is being replicated in many places throughout
the country and it’s causing the established cab companies to become more
innovative and appealing.
“Right now, people are loving the ease and convenience of Uber and other such
companies,” Sanders said. “Cab companies are trying to figure out a way to
regain their market monopoly and ward off the challenge from the private
Sanders said in addition to taxis beginning to mirror the ridesharing companies’
technology, they’re also working to put political pressure on local and state
governments to squelch competition.
“It’s based off of fear, really,” Saunders said. “This new product is
threatening to cut into business and they’re attempting to keep that from
The United Taxidrivers Community Council – a group that works to unionize cab
drivers in the city and negotiates on their behalf – this summer proposed a plan
to increase driver pay by raising cab fares.
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A five-mile ride with five minutes of waiting time would cost a
Chicago cab customer $13.80 — a rate that places Chicago 32nd
amongst other major U.S. cities. The Union’s proposed rate changes
would push The Windy City into the national top 10.
As part of a 10-point plan, the group also wanted to increase the
time drivers are allowed to wait and charge a customer by 25
percent. In its argument before the city council, UTCC cited a
University of Illinois study that found after fees and expenses, cab
drivers take home less than $5 an hour, causing many of them to work
12 or 13 hour days.
“Over one hundred years ago, workers fought and died for the right
to an 8-hour workday,” UTCC chairman Fayez Khozindar said in a
statement. “How much longer until we no longer have to drive
13-hours a day at below minimum wage?”
The city countered with its own study that found the average
cabdriver earns $12.14 an hour, which comes out to $33,857 a year
after fees and expenses.
The pressure continued from other groups as well.
“If a factory owner in Chicago paid his workers $4.38 an hour and
kept them at work for 13 hours a day, it would called a sweatshop.
The taxi industry in Chicago is a sweatshop on wheels,” Michael
McConnell, regional director of the human rights group American
Friends Service Committee, said in a press conference.
Sanders concluded that these clashes would continue with increased
intensity as a direct result of a public entity being outplayed by
“Competition brings out the best in people and in companies,” he
said. “Right now, cab companies are learning that the hard way.”
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