Why Toronto Should Follow Chicago’s Lead and Tax Ride-Share to Fund Transit

Photos: Eric Allix Rogers, Human Transit
Photos: Eric Allix Rogers, Human Transit

Last fall Chicago City Council passed a 15-cent fee on ride-share trips to fund CTA infrastructure, which kicked in on January 1. Since recent studies show that services like Uber and Lyft are increasing congestion and cannibalizing transit ridership in U.S. cities, this is a sensible approach to level the playing field.

Now Toronto, perhaps the most similar city to Chicago in North America in terms of size and geography, is considering the same strategy. CBC Radio One, Toronto invited me to discuss Chicago’s experiences with host Matt Galloway this morning. TTC chair Josh Cole and former Toronto chief city planner Jennifer Keesmaat also discussed the idea on the show. As proof of Canadian politeness, no one made fun of my stateside pronunciation of their city’s name, with three syllables instead of the Torontonian two.

  • Justin

    Very dumb interview. The interviewee listed these as reasons why we should tax ride share (with no mention of taxis, limos, or private cars):

    1. People say that they are sometimes using ride share to replace walking or biking trips
    2. Ride share is correlated with decreasing public transportation fare revenues, especially late at night
    3. Ride share is contributing to increased road congestion in some cities

    Regarding points 1 and 2, those are completely associated with the poor quality of public transportation options.

    For point 1, if people want to walk or bike, they will walk or bike; if they were previously walking or biking but now are taking ride share, that means that they never really wanted to walk or bike, and it was only because there was no good mass transit option that they ever walked/biked in the first place. Even in Chicago, there are many trips with no good bus or train route options, and even those that do have a relatively direct mass transit route suffer from slow speeds, low frequency, and unreliable timetables. When you’re contending with terrible Chicago weather and the ever-present threat of crime, the last thing you want to be doing is sitting at an outdoor bus stop for 20 minutes to wait for a bus that is only going to travel at 8mph after you finally get on.

    For point 2, beyond that the threat of crime increasing after dark, there is also the fact that L train frequency falls off a cliff outside of weekday daytime hours. Where they were sending a train every 2 minutes during rush hour, on nights and weekends they are only sending trains every 20 minutes, and the timetables and even somehow the live train tracking services are completely unreliable. If they would increase night and weekend train frequency to 5 minutes or less they could increase their ridership by a huge amount. Increasing frequency to 5 minutes or even 2 minutes should be of trivial cost: the El is almost completely grade separated, there are only a few miles of track that have to cross paths with any other vehicles, it would be relatively easy to automate the El (compared to creating automated cars that have to act in traffic). You have software driving the trains and don’t need an expensive driver for each one, so at off-peak hours you can continue to maintain the 2 minute headways between trains that allows everyone to keep moving quickly. You can make those late night trains only 1 or 2 cars long so you are driving around with excess passenger capacity. I guaranty you that late night ridership would pop back to even above what it was before ride share if frequency and speeds were increased.

    Regarding point 3, as any economist will tell you, if you want to get rid of congestion, tax congestion. Don’t tax something that is maybe, sort of, tangentially related to congestion. There is no good reason why ride share should pay for congestion and taxis and private drivers shouldn’t. If you had any concept of the bigger picture you would be much more supportive of taxing congestion. Taxing congestion would be yet another nail in the coffin of private car ownership as people would try to be more efficient with their transportation options to avoid the congestion fees.

  • johnaustingreenfield

    “If you had any concept of the bigger picture you would be much more supportive of taxing congestion.” I couldn’t be any more supportive of taxing congestion than I am, which is to say completely supportive!

    You’re absolutely right, Chicago should charge a congestion fee for driving private cars, especially downtown. But such policies have been politically challenging to pull off in the United States, where we tend to view driving as an inalienable right.

    One reason why a ride-share fee is a pragmatic approach is that many if not most ride-share users are also transit riders, so this policy is a relatively light lift politically. There’s been little backlash to the fee because ride-share customers don’t seem to have a big problem with paying a little more for the service if it means they’ll also get to enjoy better transit.

    As for adding a fee to taxi trips to fund transit, that makes some sense as well. On the other hand, ride-share is already killing off the cab industry — do we really want to pour water on a drowning person? Perhaps a better approach would be to earmark some of the city’s existing taxi revenue to fund the CTA.

  • FlamingoFresh

    My biggest problem with this tax is that it affects users like me who use ride sharing as a safety measure when requesting it on late nights. The roads are not filled with traffic and yet I’m still having to pay for this tax. Due to infrequency of service as well as the risk being robbed while trying to get home or to a CTA stop, I choose to ride share. If the city makes the streets and city safer then that would open up ridership to more users.

  • Laur

    Taxi companies are being taxed to death in Chicago……..for example : It cost $600/year per taxi to renew a license……where Uber and Lyft only pays $0.07 per car per year.( 6999 cabs pay $4,200,000 million/year……versus $ 20,000 for both Uber and Lyft and 120,000 cars and 250,000 drivers ) .
    Each Uber and Lyft car should pay $600/year……that would bring in $72,000,000 million per year.The insurance requirements are identical….
    We are replacing 6999 highly regulated and taxed vehicles with 120,000 gypsy cabs which pay nothing in taxes and creates traffic and congestion everywhere