For every action there is an opposite and equal reaction. So stays true with the success of Uber bringing a big hit to Chicago’s taxi industry.
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According to a new study conducted by AFSCME Local 2500/Cab Drivers United titled “Run Off the Road: Chicago’s Taxi Medallion Foreclosure Crisis,” the taxi industry in the windy city is on the brink of collapse, in large part, because of Uber. Compiled by nonprofit data analyst James Bradach, the study discusses the financial struggles of cab drivers and the bleak road ahead of them, according to WTTW.
In January of 2014 2.29 million taxis were hailed to deliver passengers to their destination, but since ride share industries hit the market that number has declined to just 1.1 million trips this past January. In addition, the income of the taxi industry has dropped significantly taking a $2,000 loss in that same three year time span.
With the decrease in demand cab drivers have also seen a decrease in value as the Chicago taxi medallions, the licenses required by cab drivers to operate, have become less valuable. The cost to receive a medallion was once as high as $350,000, but is now only valued at $50,000.
“These folks have invested a huge amount of their income into a medallion,” AFSCME Council 31 Associate Director Tracey Abman told WTTW. “That’s their savings account, that’s their retirement savings or the fund to pay for their kids’ education.”
Part of the struggle to keep up with the ride sharing companies such as Uber and Lyft come from the different standards that cab drivers are held to in relation to the regulations faced by registered ride share drivers. Cab drivers argue that these different standards make it significantly more difficult to create a competitive market where cab drivers and ride share drivers are all benefitting.