One of Chicago’s freshman aldermen says he has a new idea that could ease the tension between Chicago cab drivers and ride-sharing companies: Buying back medallions.
Chicago cab drivers need a medallion, a city-issued license, to operate in Chicago. In the past, they were also a great investment for drivers who owned their own cabs. At their height, they were worth more than $300,000. But now, Ald. Ray Lopez (15) says the rise of companies like Uber has decimated the value of medallions.
“A lot of taxi drivers with medallions viewed them as their retirement, as part of their future. I think we have to understand that fact, and we have to rectify the situation with them,” Lopez said.
Lopez wants to create a city fund that works sort of like the state’s Southwest Home Equity Assurance program, which was developed to insure property values for homes on Chicago’s Southwest side. In this case, Lopez is proposing the city put up $2.5 million to start, and he’d tack on a 50 cent surcharge on all rides from companies like Uber, Lyft or Sidecar. He’d also require medallion owners to chip in an annual fee of $150 if they want to participate in the program.
The alderman is still working out the final details of his plan, including how much the city would be able to offer for each medallion. According to the city’s data portal, there are around 7 thousand active medallions in Chicago, and paying back every owner at the original value would be a massive expense. But Lopez thinks his idea will help pave the way toward a compromise between taxi and ride-share companies, as he says, the declining value of medallions is fueling the animosity between the two rival industries.
“We’re not trying to kill this economic driver,” Lopez said about the ride-sharing industry. “But we want to be able to be respectful and considerate of the industry that was, while we prepare for the industry that is to be.”
Lopez said he hadn’t yet spoken with the mayor about his idea, as he wants to first work through a few more details. He’s reached out to the city’s law department, and they shared a number of concerns about the plan, including the source of funding for the $2.5 million startup fund, and the likelihood of adding an additional surcharge onto Uber, Lyft and Sidecar rides.
He’s also been running this by other aldermen, like License Committee Chair Emma Mitts, who he says is open to the idea.