Uber, the ride-sharing company that pretends it isn't a ride-sharing company, has started a massive PR campaign against the city of Chicago because Mayor Lori Lightfoot wants them to pay for the damage they're causing to the commons.
Let's unpack all of that.
Lightfoot has proposed a $3 tax on ride-sharing trips into the Loop, Near North, Lincoln Park, and other affluent areas, and a smaller tax on trips out of the center city, because trips in and out of those areas cause several kinds of damage to the city's infrastructure. This is the definition of "negative externalities." In fact, Uber's and Lyft's pricing model has caused the following problems:
- A glut of cars on the road during rush hour, with all the emissions and traffic they cause;
- Reduced public-transit ridership and revenue, which disproportionately harms less-affluent users;
- The destruction of the regulated taxi industry in Chicago, including thousands of bankruptcies due to taxi medallions losing more than two-thirds their value since 2014; and
- The enrichment of Uber's officers and shareholders on the backs of underpaid Uber drivers.
Lightfoot's tax will increase the cost of a trip from Lincoln Park to Chicago by $3. If that pushes people to use public transit instead, we win. If people pay the tax, we win. If Uber's board take home less money, that's a neutral result we can all cheer anyway.
Compared with the way London, for example, has dealt with the environmental damage of cars in the central city, Uber's getting off easy in Chicago.
But of course, having gotten very rich through exploitation of other people, they don't see i that way. (Why are billionaires so whiny these days? Even Carnegie built libraries.)
Because we don't have Satanic mills employing thousands of 9-year-old orphans any more, it's hard to see the direct similarities between companies like Uber and companies like those portrayed in Dickens novels. But guess what? They're fundamentally the same. And Lightfoot's tax is only the first, modest step in Chicago government making life better for everyone in the city in the aggregate. The people complaining the most about the Uber tax are the people to whom $3 hardly matters. You can tell because $3 is more than the price of a CTA ride, and less than the current cost of an Uber ride.
If some Uber shareholders have to suffer a little so that people on the South and West Sides can get to work more reliably, I'm OK with that.