National News
Uber, Lyft Ridesharing Hits Chicago Taxi Business Hard
January 11, 2017 posted by Steve Brownstein
The total number of licensed cabdrivers in Chicago is nearly 9,500 -- the lowest in a decade -- while the average value of a taxi medallion required to operate a cab has plummeted to about $66,000 this year from a peak of $349,000 in 2013, according to city data. The number of new drivers entering into the taxi industry, which is often an entry point into the workforce for immigrants, also has slowed to close to 300 this year as of Oct. 6, down from about 770 last year and 1,350 in 2014.
Meanwhile, fewer taxi drivers are renewing their licenses. Through Oct. 6, 9,200 taxi drivers had renewed their chauffeur's licenses, down from more than 12,000 in 2014 and 2015.
"The industry is really in great distress," said Tracey Abman, associate director AFSCME Council 31, which works with the Cab Drivers United union, adding that the ride-share industry is not hampered by the strict city oversight that taxi drivers endure.
"This is a result of the unlevel playing field that ride-share transportation has created," she said.
Unlike ride-share companies, which allow people to order and pay for rides through an app and get rides from drivers using personal vehicles, cabs are required to have a city-issued medallion affixed to the hood of a vehicle, and drivers must pay to get a chauffeur's license from the city in a process that includes fingerprinting for a criminal background check, completion of a training program at Olive-Harvey College and an exam.
Ride-share drivers, many of them part-time, can bypass those rules and regulations. They are able to drive their own car, submit to a background check performed by the company that doesn't require fingerprinting, and complete a training program online or in person.
And while taxi fares are set by the city, ride-share companies can provide cheaper rides or raise rates depending on demand.
Taxi advocates have pushed for common rules. Some taxi companies sued the city in 2014, alleging a double standard that gives ride-share companies a competitive advantage by not applying the same regulations and threatens to devalue taxi medallions.
But a federal appellate court in October ordered that the lawsuit be dismissed, with one judge suggesting the two industries were as different as cats and dogs, and noting that most cities require licenses for canines but not felines.
"Just as some people prefer cats to dogs, some people prefer Uber to Yellow Cab, Flash Cab, Checker Cab, et al. They prefer one business model to another. The city wants to encourage this competition, rather than stifle it as urged by the plaintiffs, who are taxi owners," Judge Richard Posner wrote. "There are enough differences between taxi service and (ride-sharing) service to justify different regulatory schemes," he added.
Uber maintains that more options are better for customers.
