Alderman Brendan Reilly in Chicago is proposing a cap on rideshare fees in an attempt to stop what he calls “predatory” charges routinely imposed by Uber and Lyft.
At a City Council meeting on May 19, Reilly introduced plans for an ordinance requiring companies licensed as transportation network providers (TNPs) to charge no more than 150% of their current, regular fare. The proposed cap would apply during snowstorms and other periods of high demand, as well.
If the ordinance were to pass, Uber, Lyft, and Via would need to notify Business Affairs and Consumer Protection Commissioner Rosa Escareno of the fare rates for each class of vehicle and type of service. Companies would be able to continue surge pricing when demand is high, but the surge would need to stay under that 150%.
If a company violated the cap, each overcharged care would trigger a $100 fine. Violations on three different days within a year period could potentially result in a “suspension, rescission, non-renewal or revocation” of the company’s rideshare license in the city.
In Chicago, rideshare companies are more widely used than the taxicab industry. Customers have complained about gouging during peak demand. In an email to the Sun-Times, Reilly said, “Every day, I receive complaints about the exorbitant costs being charged by Uber and Lyft for relatively short trips that used to only cost passengers a few dollars. I hear from young women in the service industry who work late hours who can no longer afford a safe car trip home from work late at night and are forced to risk their personal safety using the CTA system. I am receiving reports of rideshare passengers paying a small fortune for short trips. Trips that were normally priced at $15 are now being charged at surge prices around $40. That surge pricing isn’t just exorbitant. It is straight-up predatory.”
This is not the first time rideshare fees have been under the spotlight in Chicago. Two years ago, Mayor Lori Lightfoot imposed a $40 million congestion fee on Uber and Lyft. That fee triple the tax on passengers riding solo to and from downtown and increased rideshare trips in Chicago neighborhoods outside of downtown by 74%.
Uber and Lyft have not responded to comment requests from the Sun-Times. For more of the latest rideshare industry news, click here.