As Chicago cabbies struggle, rideshare industry surges – including the price
CHICAGO - It is a business that is dying off like the dinosaurs.
Cab drivers say the pandemic has just about wiped out what was already a struggling business. But at the same time, their competitors in the rideshare industry are charging more than ever.
Now, a Chicago alderman is proposing some new rules that he says would protect consumers and perhaps help cab drivers survive.
It used to be easy to get a cab in Chicago; just stick out your arm or pick up the phone. But now?
"Most of them are sitting at home," said cab driver Nasar Alshorbajee. "They say, why should I work? I prefer to get unemployment instead of going around the whole day and not making $150 or $200."
Alshorbajee is one of only 1,500 or so cabbies left in the city, when there used to be thousands.
Just 10 years ago, taxi medallions were going for more than $300,000 apiece. Now, you can get one for $12,000. Prices started falling after the city set rules that cab drivers say created an unlevel playing field with the rideshare industry, which is why hundreds of cabs are now parked in taxi lots, slowly rusting and surrounded by weeds.
"There’s just not enough fares on the road, not enough people at O’Hare, not enough conventions, not enough events for them to justify the lease rate, the insurance, the fines to the city, the fees," said attorney Furqan Mohammed, who has filed bankruptcy on behalf of 25 cab drivers in the past year.
"Who wants to operate a cab when it’s much cheaper and easier to operate an Uber or Lyft and charge a higher fee?"
42nd Ward Alderman Brendan Reilly says that has created another problem.
"Now we are stuck with a monopoly provider that has free reign to set up much higher rates than the average commuter is willing to pay," said Reilly.
On Wednesday, Reilly will introduce legislation putting a cap on the so-called surge pricing charged by rideshare operators, which has some trips between downtown and O’Hare costing $150.
"It’s wrong that consumers are being forced to pay these surge prices," said Reilly. "I call them gouge prices."
Reilly is proposing a 150-percent cap on normal fares, which means rideshares could only charge $15 surge pricing for what is normally a $10 ride.