Apr 12, 2024 - News

Uber welcomes taxi drivers to its Chicago app

Photo of taxi cabs lined up on a street

Cab drivers wait for passengers outside Union Station in 2020. Photo: Scott Olson/Getty Image

Uber riders in Chicago are seeing a new option on their rideshare apps this week: taxis.

Why it matters: The taxi industry has been nearly decimated in the last decade, in part due to apps like Uber and Lyft that give riders the option of front-door pickup and upfront pricing.

The big picture: The move comes as rideshare drivers have vexed platforms like Uber in recent years, striking for better pay and safety regulations or bailing on the gig completely.

  • There were 54,600 rideshare vehicles that performed at least one trip in January, nearly 25% fewer than in January 2020, Chicago Department of Business Affairs and Consumer Protection (BACP) tells Axios.

How it works: Riders can choose the "taxi" option on their apps, which will be priced similarly to UberX — the cheapest single-rider option.

  • Cabs need Arro or Curb Mobility technology to receive alerts for Uber pickups.
  • The estimated fare is visible to the rider and determined by trip, pickup distance and surge pricing.

Flashback: Uber's latest move essentially brings it full circle to its first foray into cities like Chicago.

  • Originally, cabbies were promoting Uber Taxi, the predecessor to UberX, and handing out promotions to potential riders.
  • "Then what happened is magically in 2014 or 2015 Uber launches UberX, and now we have a fleet of 50,000 drivers that just came in with their personal vehicles, and all these taxi drivers were just kind of left holding the bag," Furqan Mohammed, an attorney who works with taxi drivers, tells Axios.
  • The grossly inflated price of Chicago medallions, the permits for drivers and cab companies, and predatory purchase of medallions by out-of-town buyers contributed to the decline, a 2019 New York Times investigation found.

Zoom in: The taxi industry is far more regulated than rideshares, with "very stringent requirements for vehicles, very stringent requirements for drivers, meters have to be completely calibrated down to the cent for what the ride can cost," Mohammed says.

  • In January, there were about 2,500 taxis in Chicago that had performed at least one trip that month, down from about 4,000 in January 2020, according to BACP.
  • Base cab fare in Chicago is not subject to surge pricing and goes solely to the driver. It starts at $3.25, plus $2.25 for each mile.

Yes, but: Since the apps came on the scene, the city added rideshare regulations including:

  • A Transportation Network Provider (TNP) license drivers must renew each year;
  • Mandated clear display of the rideshare company they work for;
  • Limits on how many hours drivers can work in a 24-hour period.

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