Uber and Lyft are destroying Chicago's cab drivers
Reuters / Frank Polich
Ride-hailing apps are getting a one-star rating from the Chicago cab drivers whose livelihood they're challenging.
As Uber and Lyft expand, taxi revenue has fallen by 40% over the past three years, while 42% of cabs in Chicago aren't even operating, according to a study published by the city's taxi driver union and reported by USA Today.
This dropoff can be seen in the average monthly income being brought in by each active medallion — or the permit needed for drivers to pick up passengers who hail them on the street. The measure has dropped to $3,206 per medallion, down from $5,276 in January 2014, the study showed.
It's a direct result of a declining number of riders. The number of taxi passengers is now roughly 1.1 million a month, less than half of the 2.3 million figure in early 2014.
As such, it's getting more difficult to not only afford medallions, but also pay off the loans taken out to finance purchases. More than 350 foreclosure notices or foreclosure lawsuits have been initiated against medallion owners already this year, compared to 266 last year and 59 in 2015, according to the union report.
The re-sale value of medallions also reflects waning demand. They're fetching about $50,000 apiece in Chicago at the moment, down from roughly $350,000 a pop as recently as five years ago, according to data from the City of Chicago Department of Business Affairs and Consumer Protection. The lowest price paid for a medallion transfer this year is $35,000.
In order to fight mounting costs and competition, the taxi union recently asked the city to consider allowing older cabs to stay in service, waive a ground transportation tax of $98 per month, and get rid of a $1,000 fee to renew medallions every two years, according to the Chicago Tribune.