F*ck Uber
How Uber killed the future of transit in Illinois, and what you can do about it.
On Saturday, May 31st hours before the end of the Illinois legislative session Uber killed the Illinois Transit Omnibus bill. Rising to the challenge of a looming financial crisis for public transit funding, state senators crafted what is arguably one of the best transit and housing bills in the nation this year1 2, only to have the bill sniped by Uber over a dollar and fifty cents. With no bottom to the deep well of their greed and willingness to screw over hundreds of thousands of Illinoisans to save a buck, Uber perfectly encapsulates the “F you I got mine” spirit of crony capitalism in this country.
To explore just how craven Saturday’s move by Uber was, we need a quick background on the crisis Illinois is trying to solve. During the pandemic transit ridership nationally fell off a cliff, as work-from-home and social distancing requirements dramatically altered ridership patterns on public transit. The shift in usage was profound enough that even after the end of the pandemic ridership levels are still down significantly, not just in the Chicago metropolitan area, but in every transit system in the US3.
To combat the loss of ridership during COVID while also recognizing the importance of public transit in cities across the US, the federal government helped subsidize transit systems nationally to float them until ridership returned. At the end of this fiscal year, that program comes to an end. For Illinois, this has created a “fiscal cliff” crisis of $700 million impacting the CTA, Metra, PACE, and RTA (the 4 transit authorities in the Chicagoland area) as federal COVID-19 grant funds come to an end4.
While other transit systems have been able to shrug off the loss of these funds, Chicago faces a problem no American transit system is burdened with. The CTA has a farebox recovery requirement of 50%, far above any other transit system. This requirement means that the CTA must cover half of its operating expenses from ridership fares alone. No other transit system in North America has a fare recovery requirement so onerous. Due to this crippling requirement, the CTA is unable to preemptively allocate funds to investments proven to increase ridership like dedicated transit police, more frequent service, and upgrading infrastructure and routes5.
Without a solution to either lower farebox recovery requirements, increase funding, or both, transit operations must be slashed by 40%6. Losing these funds would be economically catastrophic not only to Chicago but to the state as a whole. A recent analysis by the Argonne National Laboratory found that every dollar invested into the CTA directly creates 13 dollars of economic activity7. By definition this math works in reverse as well, every dollar removed from the CTA sucks 13 dollars of economic activity out of the local economy. To put a number on this, if the CTA is forced to eliminate 40% of its operating budget, that will remove $9.6 billion of economic activity from the state of Illinois8. What state can afford to shoot a $9.6 billion hole into its foot and remain standing?
Facing this precipice, the Illinois legislature put forward not just a stop-gap funding fix, but a transformational bill that would reshape public transit in Illinois with broad public support9. On top of simply allocating more funds to cover the budget shortfall, this bill would have lowered the farebox recovery requirement to 25 percent in line with other transit agencies nationally and globally, enabling regional transit to begin making broader investments toward growth. It would have empowered a renamed RTA to purchase and develop real estate around transit stations enabling Chicagoland transit to become economically self-sufficient over time, similar to transit agencies in Japan and Hong Kong. It would have reshaped the transit board of the RTA to prioritize effective transit leadership over mayoral patronage. It would have created a new transit police force to make the CTA safer than ever. It would have allocated funding for downstate transit agencies to improve frequency and reliability. And finally, among a host of smaller improvements and tweaks, it would have reshaped parking requirements in proximity to transit stations to lower the cost of development so housing at more affordable prices could be quickly built to address the rapidly escalating housing shortage crisis affecting the state, while also organically increasing the demand for transit.
This bill was a transit slam dunk, not just for Chicago, but for the entire state of Illinois. As the legislative deadline coasted into the final day of the session on May 31st it looked like a sure bet to pass. And then Uber got involved. You see, in order to fund this bill, new revenue had to be raised, and one of those sources of revenue was a $1.50 climate impact fee on all non-grocery, non-medicine deliveries that occur by car. Never mind that the number of deliveries that Uber is making every day are increasingly being done by e-bike and not car, even outside of Chicago. Never mind that Uber already has its own program to expand bike deliveries nationally. Never mind that the overwhelming bulk of Uber’s business occurs in urban areas well served by e-bike delivery and not in rural areas. Never mind that Uber generates over $8 billion in revenue annually, of which this fee is a drop in the bucket. And never mind that Uber’s primary customer base is young, urban, Millennials and Gen-Z-ers with disposable income to spare and unlikely to be dissuaded from a purchase by an extra $1.50 10 11 12 13. Despite all of that, Uber launched a tactical missile right at the bill as it was inches away from the finish line.
Mere hours before the state senate vote on the bill, Uber sent a push message to every Illinois user of its apps telling them that the state legislature was about to pass a “secret tax hike” with the “highest taxes in the country”, flooding Illinois residents with purposeful misinformation at the 11th hour of the legislative session14 15. To be clear, Uber is not solely responsible for destroying this bill. The Illinois Senate waited until quite literally the last minute of the legislative calendar to try to pass it, despite the fiscal cliff being one of the largest priorities of the entire legislative session, and house democrats (who have a supermajority) lost their nerve and resolve to pass the bill in the after-midnight session where the passage requirement rises to 60%.
Despite those failures, the impact of Uber sniping the bill cannot be overlooked. Uber’s actions were well coordinated and capitalized utilizing hours of engineering time, marketing, and legal resources to produce a crowdsourced campaign with push notifications, landing pages, and email forwarding to deliberately misinform and misdirect public attention and anger at a moment in which it would be impossible for elected officials, transit organizations, or decentralized transit advocates and users to respond and inform the electorate about the realities of the bill. Uber bet they could screw over Illinois’ citizens to save a couple of dollars and still walk away from the fallout without their users being any wiser.
It is critical we don’t let Uber get away with such malicious and depraved behavior that has caused a mess we will ultimately have no choice but to clean up. If you have read this far, I urge you to help punish Uber for its actions. If you have the app on your phone, pause here and delete the app. You still have plenty of options available for both rideshare and delivery. You absolutely do not need them. Seriously, I urge you to take a moment and delete everything Uber-branded from your phone. It will only take a minute. … I’ll wait. …
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Now that you’ve done that, there is still a path to save the bill. Since it didn’t make it to the house floor until after midnight on the 31st it now needs a supermajority of 60% to pass. Illinois representatives need to know that we have their back. If you live in Illinois, call or email your Illinois State Senator and State Representative (find yours here: IL district locator) and tell them you want the Transit Omnibus Bill passed, and that you don’t care if Uber has to pay an extra $1.50 for it. Then call or email the governor and tell him to call a special session for transit funding: phone contact or email contact
Uber knows that the more they can make public transit struggle, the more market share they can capture. It is all too clear that they would happily put thousands of Illinoisans out of work, crater the Illinois economy, and screw over the hundreds of thousands of Illinoisans that rely on public transit for their livelihood in order to save a buck or make a buck. When companies like Uber treat the well-being of our citizens as bargaining chips for their own profit, and pillage and corrupt the social good in a psychopathic drive to eke out a fingernail of better margin on their product, then we need to make it our responsibility to push back and financially zero them out in response. Fuck Uber and Long Live the CTA.
Thank you for articulating all of this so well! The last sentence is my personal favorite.
This is incredible writing. Do you ever write for newspapers?