Chicago’s taxi cab industry is on the brink of collapse, according to a new study.
“Run Off the Road: Chicago’s Taxi Medallion Foreclosure Crisis” was compiled by nonprofit data analyst James Bradach at the behest of AFSCME Local 2500/Cab Drivers United, a union made up of Chicago taxi drivers.
Based on the study’s findings, which used publicly available city data, cab drivers are struggling financially—and the outlook is bleak. Since ride-sharing services like Uber and Lyft hit the Chicago market in 2013, overall taxi ridership in the city has taken a plunge.
There were 2.29 million taxi trips in the month of January 2014. That number dropped by more than half just three years later, in January 2017, when there were 1.1 million trips. Driver income has followed that downward trend: the monthly income for a driver with an active taxi medallion fell from $5,276 in January 2014 to $3,206 in January 2017.
Chicago taxi medallions, the licenses required by cab drivers to operate, have dropped in value since the arrival of ride-sharing services in the city. A medallion is a major investment tantamount to owning a business – at least, it used to be. The price of a single medallion was more than $350,000 in 2012, but dropped to around $50,000 this year.
AFSCME Council 31 Associate Director Tracey Abman said nearly 40 percent of medallion owners aren’t cab companies, but small, family owned businesses. “These folks have invested a huge amount of their income into a medallion,” Abman said. “That’s their savings account, that’s their retirement savings or the fund to pay for their kids’ education.” Those empty investments are coming back to hurt cab drivers: the amount of surrendered or foreclosed medallions has skyrocketed over the past four years.
Since 2013, 774 taxi medallions have been surrendered, 578 have foreclosure notices and 107 have been foreclosed by their lenders. wf