Top mayoral aide says Chicago's struggling taxi cab industry needs a fare hike

Chicago needs to raise taxi cab fares for the first time since 2016 to save a once-thriving industry decimated by ridesharing and the pandemic, a top mayoral aide said Thursday.

“The tax industry is very dear to us. It has a lot of value in Chicago. It was here before” Uber and Lyft, Business Affairs and Consumer Protection Commissioner Ivan Capifali told the Sun-Times. “We want to make sure that they survive.”

Capifali essentially urged the City Council to approve the cab fare hike that Mayor Brandon Johnson introduced without fanfare in late September while public attention was focused on the battle over his 2026 budget.

The mayor’s plan would maintain the cost of entering a cab, known as the “flag pull” at $3.25 for the first one-ninth of a mile, but provide substantial relief for cab drivers in other ways.

They include a $2.50 rush hour fee for rides between 3:30 p.m. and 7 p.m., a $1 overnight fee for rides between 8 p.m. and 6 a.m and increased charges for both time and distance.

Instead of 25 cents for each additional one-ninth mile, passengers would pay 31 cents. Another 25 cents would be tacked onto the fare for every 36 seconds instead of 20 cents.

The ordinance has languished in committee for months, but Capifali said that needs to change to accommodate the "high cost of everything," including fuel, insurance and maintenance.

“They haven’t seen any fare increase in a while and that has led to other problems… We have received complaints from consumers that some taxi drivers are requesting a flat fee. That sometimes feels like they’re getting gouged. We have to make sure that doesn’t happen. Increasing the cab fare could be a solution to that," he said.

John Moberg, president of Checker, Yellow and American United Cab, said the pending increase is long overdue. Chicago cab drivers got some relief in 2022 when then-Mayor Lori Lightfoot imposed a temporary fuel surcharge. But it was only in place for about a year.

“Rideshare hurt us. But COVID was almost like the nail in the coffin. We have almost no business in the downtown or North Shore anymore,” Moberg said. “Insurance has gone up every year for the last several years. That’s our biggest expense. The industry needs a raise to stay competitive and stay available. It’s been a long time.”

Chicago’s once-thriving taxi cab industry has been shrinking ever since the unregulated advent of ride-hailing services like Lyft and Uber.

It took years before the city finally stepped in and regulated that industry. By that time, the value of taxi cab medallions already had plummeted.
A medallion that once sold for as much as $400,000 is now valued at $5,000.

The pool of available drivers also is shrinking — and aging. Anyone who got laid off or needs to supplement their income can “go to Uber and be driving tomorrow," while it takes two or three weeks of classes to be cleared to drive a cab, Moberg said.

“We don’t have new blood with younger people coming in. It’s the same people who have been there for years and they’re slowly retiring and dying off. That’s probably our biggest handicap," Moberg said.

In 2017, the taxi industry got what advocates then called a “death blow." That’s when the U.S. Supreme Court let stand a federal appeals court ruling that snuffed out an attempt by the cab companies to level what they called an uneven playing field that favored Uber, whose investors included then-Mayor Rahm Emanuel’s brother.

The appeals court ruling essentially said the business models of taxis and ride-hailing services are different and, therefore, they can continue to operate under different sets of rules in Chicago.

That decision validated a 2014 city ordinance letting Uber and Lyft operate without taxi medallions, city-regulated fares, driver fingerprinting or other regulations cab companies and their drivers must follow. Uber and Lyft had long maintained that a background check based on FBI fingerprinting would discriminate against minorities.

In 2016, a divided City Council agreed to license ride-hailing drivers but opted not to require fingerprinting after Uber and Lyft threatened to abandon the Chicago market.

On Thursday, Moberg renewed his appeal for "the same regulations for both" the taxicab and rideshare industries.

“Their cars don’t have to be inspected. Ours do. They can go to any gas station and get a certificate. Our cars have to go to inspection lanes two or three times a year,” Moberg said. “Is the public safer in a rideshare car? Same thing with drivers."