Chicago Wants to Tax Lyft and Uber to Help Public Transit. Hmmm…

 

Chicago likes to think of itself as a “Silicon Prairie” hub of tech startups. And in a recent report on US “startup communities” and their readiness to capitalize on “next-wave startups,” the city ranked 14th. (Boston and the Bay Area were tops.)

So OK, but hardly impressive given both Chicago’s size and proximity to two elite universities, Northwestern University and the University of Chicago. Clearly city officials there, like their counterparts around the country, hope a winning bid for Amazon’s second headquarters might catapult them into the top tier.

Yet given all that, why on earth would Chicago Mayor Rahm Emanuel propose a tax on ride-hailing companies like Lyft and Uber? Seems sort of anti-tech. I mean, I get the basic reason: It’s a way of raising revenue for the city’s public transit system. But more broadly, the tax might be an effort to help bolster public transit in the face of a competitive threat from ride sharing companies. It’s becoming an evermore common story: Public transit problems boost Uber and Lyft, to the detriment of public transit.

And thus a vicious circle is established, which is good for Lyft and Uber, potentially bad for consumers. “The most important question surrounding Uber is whether it can only recoup its investors’ billions by building a monopoly (or at least duopoly with Lyft) on the ruins of public transportation,” a Guardian story argued earlier this year.

The answer to that question might be “no.” Some research suggests ridesharing companies and just regular taxis can complement public transit. As a 2012 CityLab piece noted:

Work from Columbia University scholar David King and others has supported the role of taxis as part of a multi-modal travel network that does not involve a private automobile. Their data of taxi movement in Manhattan neighborhoods found that a majority of these trips were late-night origins — meaning riders must have arrived there by some other mode earlier in the day, with this mode obviously not being a single-occupancy car. King and colleagues write: “In many cases taxi trips are part of journeys that began with transit trips, yet planning and expanding taxi service as an extension of transit networks is rarely undertaken in practice.”

Indeed, some cities are already finding value in cutting public transit and instead subsidizing ridesharing. I also think it’s worth noting Uber’s response to the Chicago ridesharing tax: “When safe and affordable rides are available across every neighborhood — whether it’s by train, bus, or rideshare — Chicagoans can get to their jobs or family obligations without having to own a car.”

There are 12 comments.

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  1. DocJay Inactive
    DocJay
    @DocJay

    Democrats destroy everything they touch.  This includes elite universities and the study of economics.

    • #1
  2. John Stanley Coolidge
    John Stanley
    @JohnStanley

    The roads, that publicly owned buses use, are paid for by Uber and Lyft’s gas taxes.

    • #2
  3. Cato Rand Inactive
    Cato Rand
    @CatoRand

    I live in Chicago.  Have for almost 30 years.  Chicago and Cook County are in an absolute panic.  We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    • #3
  4. DocJay Inactive
    DocJay
    @DocJay

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    Maybe you and your man should have a contingency plan?

    • #4
  5. Randy Weivoda Moderator
    Randy Weivoda
    @RandyWeivoda

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    No talk of cutting spending, then?

    • #5
  6. Cato Rand Inactive
    Cato Rand
    @CatoRand

    DocJay (View Comment):

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    Maybe you and your man should have a contingency plan?

    What makes you think we don’t?  We actually do.  We’ve got a spot picked out for a dream home in retirement, in a small lakefront community we know well where we have a lot of friends, and far from the clutches of the impecunious city, county and state of Chicago, Cook, and Illinois.

    The problem is that for all its problems, Chicago is a fabulous city to live in.  A city of theater, and restaurants where we have a nice home within walking distance or . . . ahem . . . a short Uber ride  . . . of everything.  And we’re not that old.

    So every day feels like a gamble.  I’d like to stay on the ride for a little longer, but am well aware the crash is coming and that I’d like to be out when it gets here.

    • #6
  7. Cato Rand Inactive
    Cato Rand
    @CatoRand

    Randy Weivoda (View Comment):

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    No talk of cutting spending, then?

    1. No.
    2. Even if there was any will to cut spending, Chicago like the state suffers from the fact that it’s not current spending that’s the problem so much as spending already done and not yet paid for – largely in the form of pensions.  Those promises are not easily  broken once made and most of the fiscal problems in Chicago and Illinois go back to pension promises long since made but never funded.
    • #7
  8. DocJay Inactive
    DocJay
    @DocJay

    Cato Rand (View Comment):

    DocJay (View Comment):

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    Maybe you and your man should have a contingency plan?

    What makes you think we don’t? We actually do. We’ve got a spot picked out for a dream home in retirement, in a small lakefront community we know well where we have a lot of friends, and far from the clutches of the impecunious city, county and state of Chicago, Cook, and Illinois.

    The problem is that for all its problems, Chicago is a fabulous city to live in. A city of theater, and restaurants where we have a nice home within walking distance or . . . ahem . . . a short Uber ride . . . of everything. And we’re not that old.

    So every day feels like a gamble. I’d like to stay on the ride for a little longer, but am well aware the crash is coming and that I’d like to be out when it gets here.

    Good plan.  I understand your dilemma as that city has a ton of plus’s.   Chicago, the city that works, just don’t ask how.

    • #8
  9. Kozak Member
    Kozak
    @Kozak

    Chicago is taxing everything it can to try and make up for the horrendous shortfalls in the City budget.  It’s in a death spiral.

    • #9
  10. Kozak Member
    Kozak
    @Kozak

    Cato Rand (View Comment):

    Randy Weivoda (View Comment):

    Cato Rand (View Comment):
    I live in Chicago. Have for almost 30 years. Chicago and Cook County are in an absolute panic. We’re hopelessly insolvent and everyone is starting to notice and get scared and the local mandarins are desperately groping around like a drunk looking for his keys in the dark, grabbing for anything they can slap a tax on.

    No talk of cutting spending, then?

    1. No.
    2. Even if there was any will to cut spending, Chicago like the state suffers from the fact that it’s not current spending that’s the problem so much as spending already done and not yet paid for – largely in the form of pensions. Those promises are not easily broken once made and most of the fiscal problems in Chicago and Illinois go back to pension promises long since made but never funded.

    Especially since the geniuses who wrote the State Constitution made payment of public pensions a constitutional obligation.

    • #10
  11. RushBabe49 Thatcher
    RushBabe49
    @RushBabe49

    Without “having to” have a private car?  So my Liberty is something that public transit and Uber can substitute for?  No. Way. In.Hell.

    My automobile is my Freedom, and I will never give it up.  Here in the Seattle area, my car tab taxes have doubled to pay for “light rail” that will never reach my town, and even if it did I will never ride it, ever.  Fifty-two Billion Dollars is what that boondoggle will cost, which is more than the total state budget!

    • #11
  12. Cato Rand Inactive
    Cato Rand
    @CatoRand

    Kozak (View Comment):
    Chicago is taxing everything it can to try and make up for the horrendous shortfalls in the City budget. It’s in a death spiral.

    I am convinced Chicago will file for bankruptcy in time and reduce the pension obligations.  What the State of Illinois (which doesn’t have that option) will do, I have no idea.

    • #12

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