Chicago proposes ride-hailing fee, boosts bus priority zone funding to fight congestion

Oct. 21, 2019
The proposed ride-hailing fee would be among the highest in the U.S. and would partially fund transit investments.

Chicago Mayor Lori E. Lightfoot unveiled a proposal that would impose a fee on ride-hailing services in the certain parts of the city, which would in part, help fund transit investments. The proposals have been introduced to address increasing congestion in the city while encouraging more sustainable transportation options.  

The regulations would place a new variable Ground Transportation Tax (GTT) on single rides and during peak periods within the central business district, Near North and West Loop areas when the city faces high levels of gridlock on downtown roadways. The regulations would offer a decreased rate for passengers opting for shared rides in the neighborhoods.

“Our city, like many others across the nation, has experienced skyrocketing congestion growth due in part to the rapid growth of ride-hailing companies, making it increasingly difficult for those who rely upon Chicago’s streets for commerce or transportation, and plaguing our downtown,” said Mayor Lightfoot. “Using an evidence-based approach to combat our congestion challenges, Chicago is taking these first steps to improve mobility and further our goals of ensuring sustainable, affordable and reliable access to transportation options in every neighborhood.”

A city-conducted analysis of ride-hailing services between 2015 and 2018 show use of the services have grown by 271 percent and determined that approximately 26 miles of road space is occupied in the downtown area by ride-hailing service providers during a typical evening rush period. Additionally, the city says trips hailed by a single rider account for most of all trips taken, as opposed to shared trips accessed by multiple riders independently, contributing to even more vehicles on the roadways.

Under the current GTT, a flat rate of $0.60 is assessed per trip citywide, and a $5.00 flat rate is assessed per trip in special zones such as the airports, Navy Pier and McCormick Place. As part of an effort to incentivize shared rides to combat both congestion and rising vehicle emissions in Chicago, as well as encourage use of higher efficiency modes, like transit downtown, the city proposes the following progressive structure:

  • Decreasing the GTT on all citywide shared ride-hailing trips from $0.60 per trip to $0.53 per trip.
  • Increasing the GTT on all citywide single ride-hailing trips from $0.60 per trip to $1.13 per trip.
  • Assessing a downtown zone surcharge, placing an additional $1.75 per trip for single rides and $0.60 per trip for shared rides.

No changes are proposed to the current $5 special zone fee, the $0.10 per trip accessibility fee or the $0.02 per trip administrative fee.

The proposed new pricing model is expected to generate $40 million in new revenues for the city. As part of the city’s 2020 Budget, a portion of the $40 million generated in revenue will be allocated to support public transportation investments to improve Chicago Transit Authority (CTA) bus operations and the Chicago Department of Transportation (CDOT), including investments in seven Bus Priority Zones to improve access for the city’s south and west sides, and to enhance transportation accessibility initiatives.

Shortly after announcing the proposed ride-hailing pricing structure, Mayor Lightfoot said the Bus Priority Zone Program would see a quadrupling of its budget from $5 million to $20 million. The program is a joint initiative between CTA and CDOT designed to improve bus travel times and make service more reliable on seven core routes.

The Bus Priority Zone Program was announced this spring and CDOT is set to begin work on the first element in a series of projects along 79th Street, which is served by the #79 bus route, one of the city’s highest ridership routes. Among the improvements being made are two dedicated red CTA bus-only lanes to help move buses through the corridor more quickly, new overhead signage and new technologies and queue jump signals to improve traffic light timing and allow buses to move through an intersection ahead of regular traffic.

Project work includes, but is not limited to, the installation of designated bus only lanes, new pavement markings, street-level and overhead signage, optimizing of bus stop locations, as well as other operational and safety improvements such as curb extensions and pedestrian refuge islands.

CDOT and CTA will use the additional funds to expand the Bus Priority Zone Program to other areas throughout Chicago. Corridors being considered for future or additional improvements are: Halsted Street (#8), Western Avenue (#49), Pulaski Road (#53), 63rd Street (#63), Chicago Avenue (#66), Belmont Avenue (#77) and/or 79th Street (#79). Planning for the new improvements is expected to take place in the remainder of 2019 and into early 2020, with construction work breaking ground as early as the 2021 construction season.

The $20 million expansion of the program was made possible with funds from the city of Chicago, Cook County and the state of Illinois, as well as $17 million in federal funding from the Congestion Mitigation and Air Quality Program, which was recently approved by the Chicago Metropolitan Agency for Planning.

About the Author

Mischa Wanek-Libman | Editor in Chief

Mischa Wanek-Libman serves as editor in chief of Mass Transit magazine. She is responsible for developing and maintaining the magazine’s editorial direction and is based in the western suburbs of Chicago.

Wanek-Libman has spent more than 20 years covering transportation issues including construction projects and engineering challenges for various commuter railroads and transit agencies. She has been recognized for editorial excellence through her individual work, as well as for collaborative content. 

She is an active member of the American Public Transportation Association's Marketing and Communications Committee and serves as a Board Observer on the National Railroad Construction and Maintenance Association (NRC) Board of Directors.  

She is a graduate of Drake University, where she earned a Bachelor of Arts degree in Journalism and Mass Communication with a major in magazine journalism and a minor in business management.