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Chicago moves on taxi reforms to leave more money in cabbies' pockets

The City of Chicago is set to move on a series of reforms that would leave more money in taxi drivers’ pockets. But some cabbies say the measures avoid the central issue: a need for a fare increase.

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Chicago moves on taxi reforms to leave more money in cabbies' pockets

The proposed reforms seek to lower lease rates, leaving an additional $2,400-$5,600 in most drivers’ pockets each year.

WBEZ/Odette Yousef

The city of Chicago is moving on a set of reforms to help cabbies take home more money, a partial salve after a months-long fight over legalizing competing rideshare services left many taxi drivers feeling bruised. While many hail the step as a sign that city officials are finally working to redress cab drivers’ complaints, some say the changes don’t go far enough.

“What we wanted to do is improve overall their experience here in the city, and make it more lucrative for them as cab drivers,” said Maria Guerra Lapacek, Commissioner of Chicago’s Department of Business Affairs and Consumer Protection.

Guerra Lapacek said her department crafted the proposals after working with representatives from Cab Drivers United/AFSCME Local 31 and other driver advocacy groups. Some of them will be included in an ordinance to be introduced at City Council’s meeting next week. Others will be implemented through rule changes by the BACP.

The most significant change would reduce how much taxi owners may charge to lease their fuel-efficient cabs after the vehicles’ first year on the road.

“The garages are able to recoup their investment after a year of having these vehicles in circulation,” explained Guerra Lapacek, “so the idea was to reduce the lease rate cap for the second year, and that way give relief back to the cab driver.”

Guerra Lapacek said this idea resulted from the surprising finding in a recent city-commissioned study, which found that cab drivers spend about 40 percent of their gross income on their vehicle leases. Ultimately, the reform could affect leases for an estimated 3,700 of the city’s nearly 7,000 cabs.

Leases would also be reduced for drivers whose vehicles generate a separate revenue stream from advertising displays. The reforms would require cab companies to credit leases in these cases.

“There are over 2000 owner-operators in the City of Chicago. They don’t pay a lease,” said Peter Enger, a cab driver and Secretary of the United Taxidrivers Community Council. “This will not help them in the slightest.”

Enger said he’s delighted that city officials appear to be considering the difficulties cab drivers have faced since a previous set of reforms took effect in 2012. Those reforms raised the lease rates for cabs, without a commensurate increase in taxi fare rates. Many cab drivers say that has resulted in longer working hours to earn the same income.

Cab drivers who own and drive their own taxis affirm Enger’s fear that a new round of reform will still leave them in the dust.

“The only way is to get a fare increase that we did not get for almost ten years, to offset the cost of living and all of that stuff,” said Ahmed Ammar, who owns and drives his own taxi. “Everything went up.”

While some cab drivers, particularly those aligned with UTCC’s union, push for a taxi fare increase, others worry it could adversely affect demand. Representatives from another union, Cab Drivers United, say raising fares is lower on their priority list.

“Our focus first and foremost has been moving forward on these changes that will both put money in drivers’ pockets, and keep the cab companies competitive with the (rideshare) companies,” said Tracy Abman, an organizer with AFSCME Local 31.

Guerra Lapacek said her department will not consider a fare increase at this juncture because she worries it could turn customers away from the taxi industry. Rideshare companies’ prices routinely undercut taxi fares.

The proposals also include city-backed smartphone applications to allow passengers to electronically hail taxis, as they do with popular services such as Uber and Hailo.

“We think this is an excellent reform that’s going to bring the cab industry into more innovation and really help them access those customers,” said Guerra Lapacek. She said the city will put out a request for proposals, and will require all taxis to be on at least one of the city-backed apps.

Additionally, the reforms would reduce the fee that taxi drivers pay on credit card transactions, from 5 percent to 3 percent; lower the maximum penalties for taxi offenses from $1,000 to $400; and streamline the required driver training process.

The city will also create a task force to review the enforcement process of taxi rules at the Administrative Hearings Court, which many taxi drivers disparagingly refer to as a “kangaroo court.”

“I think it’s significant that the City is listening to drivers that are organized, listen to them, hearing their concerns, addressing some of their concerns and agreeing to continue to work together with drivers to make their lives better and make sure the industry remains viable,” said Abman.

Odette Yousef is WBEZ’s North Side Bureau reporter. Follow her @oyousef and @WBEZoutloud.

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