Mayor’s Proposed Budget Brings Tax Increase To Rideshare Services

Isabella Falsetti | The PhoenixMayor Lori Lightfoot’s proposed budget included an increased tax on rideshare services.

Loyola students may soon be stuck with steeper prices for ridesharing apps such as Uber and Lyft. Mayor Lori Lightfoot is proposing a new tax that could add on as much as $1.75 to each solo ride within the downtown area.

Lightfoot proposed a new city budget Oct. 23 that would include an increased tax on ridesharing services, a frequent mode of transportation for some Loyola students.

If passed, an estimated $40 million of revenue brought in from the new tax is supposed to help bridge the $838 million, part of the $352 million in new revenue that is supposed to be generated by components of the new budget.

City officials say the pricier rides have the potential to chase people away from ridesharing apps and onto more efficient modes of transportation, such as the CTA, lessening congestion and vehicle emissions

While Lightfoot’s budget hasn’t been passed yet, it must be approved by the City Council before Dec. 31. If passed, the budget would go into effect Jan. 1.

The tax on pool options — where a rider shares their trip with others — will be lowered to $0.53 within the downtown area. However, single rides that start or end in the designated downtown area, which includes Loyola’s Water Tower Campus, will have an additional charge of $1.75. Outside the downtown area rides will see an increase from the previous tax rate of $0.72 to $1.25. 

Courtesy of Petr KratochvilThe proposed tax aims to reduce traffic congestion in the city and promote public transportation, such as the CTA. Courtesy of Petr Kratochvil

The designated downtown area that will be subject to the tax spans from West North Avenue to Roosevelt Road in the south, and Lakeshore Drive to the Chicago River’s North Branch in the north, along Grand Avenue, then out as far as Ashland Avenue to the west.

Inclimate weather and construction can delay CTA options for students, which they have access to through the CTA U-Pass — the cost of which is factored into tuition. Because of this, many have turned to ridesharing apps as an alternative.

Andrew Mullins, a senior environmental studies major at Loyola, said he thinks rideshare services provide the best solution to work around a busy schedule. 

“I feel it is easier because it fits with the timetables I currently have,” Mullins, 21, said. “If I don’t need to be anywhere fast, the bus is perfect because they are always delayed.”

Isabel Sanchez, a first-year neuroscience major at Loyola, also said she thinks ridesharing apps provide an accessible alternative to public transportation.

“[Uber] is easier to get around, faster, you don’t have to walk as much and it takes me right where I need to go so I don’t have to wait as long,” Sanchez, 18, said.

The new tax could turn students away from rideshare apps due to the increased price, and could push more to take public transportation. Nick Jurkiewicz, a first year Loyola student who hasn’t decided on a major, said he’s concerned about how much the tax will add onto rideshare costs.

“I think as a broke college student, the extra few dollars might be too much so I might just try to take the train instead,” Jurkiewicz, 18, said.

Despite this, some students said they see the potential benefits of the tax hike, such as reducing the high-levels of traffic downtown.

“I think it actually will be useful,” Sanchez said. “It’s nicer to have more cars off the road, especially downtown, so increasing public transportation is a good thing.”

Courtesy of WikiMedia CommonsMayor Lori Lightfoot proposed a new city budget Oct 23 which included an increased tax on rideshare services, such as Uber and Lyft, that would increase revenue by an estimated $40 million.

A study conducted by the University of Kentucky on San Francisco roads found that ridesharing services were a major contributor to increased congestion in dense areas of the city, making streets nearly 73 percent more full than they had been. 

In response, San Francisco has recently proposed a similar tax that will appear on ballots this year. However, the tax differs greatly in where the revenue will end up.

Half of all of the money made through the proposed tax would go to the San Francisco County Transportation Authority while the other half would go to San Francisco Municipal Transportation Agency.

The revenue from these taxes aim to improve the public transportation infrastructure of San Francisco as well as making it capable of taking on the new burden of rideshare tax refugees. 

If the San Francisco tax is passed, it would go into effect Jan. 1, 2020, the same day as the Chicago tax will be implemented if passed.

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