Chicago Is The Only Major U.S. City To Ban Ride-Share Drivers For Parking Ticket Debt

toggle caption AP Photo/Richard Vogel, File Many cashed-strapped Chicaogans have turned to driving for ride-share companies like Uber and Lyft to make ends meet. But for thousands of those drivers, the city has yanked away that lifeline because of unpaid fines on everything from parking tickets to unshoveled sidewalks or uncut weeds. This year alone, city policy required Uber and Lyft to suspend more than 15,500 people as part of a little-known program that deactivates ride-share drivers for their unpaid debts. No other major U.S. city has a program like it. The program illustrates how workers in the so-called gig economy — working temporary jobs — can be caught in the political crossfire between cash-strapped cities like Chicago and Silicon Valley. A WBEZ analysis of data obtained through public records requests shows that Chicago's ride-share suspensions have hit the city's majority black and low-income neighborhoods the hardest. Ride-share Driver Removals: An analysis of city data shows number of drivers removed this year by ZIP code. Elliott Ramos/WBEZ

And one ride-share company is saying I told you so.

Lyft said it warned the city that its policy would have a negative impact on low-income communities, and that it would keep those residents from being able to pay their debts.

In January, then-mayoral candidate Lori Lightfoot told WBEZ the debt program needed reform, and her administration would retool it to move drivers onto payment plans.

But those changes are too late for 35-year-old Mike Dwyer, who said he's a former Chicago Public Schools teacher who drove for Lyft for two years. He said he was deactivated after having two outstanding tickets, one from a red-light camera and another for residential parking.

"I was desperate, living day to day on this income as a Lyft driver," Dwyer said. "I had just paid $400 on what was originally $75 tickets."

How we got here

In Chicago, ride-share companies operate in the city's Transportation Network Provider program, which was created in 2014 to regulate app-based ride services.

Four ride-share companies are licensed to operate in Chicago: Lyft, Via, Zum Services and Rasier (a limited liability company owned by Uber), according to data from the Department of Business Affairs and Consumer Protection.

As many as 105,000 people drive for at least one ride-share company each month in Chicago, according to city data.

And at first it didn't matter if ride-share drivers owed the city money. But South Side Ald. Anthony Beale, 9th Ward, was among those who led an effort to collect outstanding debt from those drivers — something the city already required for taxi drivers.

Beale, formerly the head of the Council's Transportation Committee, said the ride-share industry was responsible for the devaluation of taxi medallions and wanted to level the playing field.

"You have people who have put their lives on the line to buy a medallion, he said. "They mortgaged their homes to buy [one], and now it's worthless."

"They're just trying to make ends meet."

In an effort to help the taxi drivers, Beale tried to require ride-share drivers to obtain chauffeur licenses — a rigorous testing process required for taxi drivers — and pushed for fingerprint background checks. Those moves raised discrimination concerns, and prompted threats by Uber and Lyft to leave Chicago.

Both proposals failed. But Beale was successful in getting the city to enforce the debt requirements. And in May of 2016, the city sent out its first letters of removal to 10,000 drivers.

A Sun-Times interview with Ald. Anthony Beale (9th Ward) in May.

Eric Halvorson is a policy and communications associate for the Chicago Jobs Council, a nonprofit that has lobbied city and state lawmakers to end license suspensions for parking tickets.

"No matter how many issues you have with ride-share services, the people who are left with no better option than to work as ride-share drivers should not be the casualties of a bigger fight over how you want those platforms to exist in our local economy," Halvorson said.

Chicago needs money, lots of it

Lightfoot announced last month that the city has an $838 million budget gap.

How much could outstanding debt from ride-share drivers help the city?

A Finance Department audit performed last December found more than 24,000 ride-share drivers owed the city a total of $19.4 million — mostly from unpaid parking tickets.

About half of that total is just from late fees.

Kristen Cabanban, a spokeswoman for the Finance Department, said drivers are checked for debt once a year and are given 90 days to come into compliance after that initial check.

Of those 24,000 drivers, about a third came into compliance within 90 days, and the city removed the other 15,500 in April. As of last week, Finance Department data shows a slight increase, and now about half of the flagged drivers have come into compliance.

But that still leaves about 12,300 people unable to drive for a ride-share company in the city. That's about 12% of the 105,000 monthly ride-share drivers.

Cabanban said the city only pursues drivers when tickets are past the final determination stage, which means the time for contesting the ticket has passed. That also means the original fine doubled because of late penalties.

Can't see this visualization? Check it out here.

But the late fees were never part of the conversation when Beale used the debt figures as a rallying cry to "drop the hammer" on ride-share drivers.

"Shooting everyone in the foot"

While it seems logical for cities to collect debt, Chicago's ticketing policy levies unusually high late penalties and collection fees. So, those with tickets are sometimes stuck with high bills, and the city often never sees the money.

"It's exactly the same Catch-22 that we put people in when we take away a driver's license for the inability to pay debts," said Halvorson, from the Chicago Jobs Council. "It's sort of like it's shooting everyone in the foot because now you've prevented the person who you want to give you money ... from being able to get money."

An investigation by WBEZ and ProPublica Illinois previously found that mostly black communities have been hit with higher rates of ticketing than white neighborhoods. Most of those tickets were issued by Chicago Police officers. And about two-thirds went unpaid.

"From the human perspective of somebody who's going through this, I think it's going to be incredibly frustrating, and anybody going through this is going to feel like this is really stupid," Halvorson said. "Maybe the city will collect some of that money, maybe they won't collect a lot of it because the people won't be able to earn it in the first place."

"I would say they're using us. The demand for their service is becoming greater and greater each day... Consumers are eating it up."

And ride-share drivers aren't the only ones affected by the city's debt collection practices.

Taxi drivers have long been required to pay off their debts to operate in Chicago. And a separate city program can prevent public school teachers, CTA bus and train operators, Park District workers and even police and firefighters from holding a job while owing the city debts.

The employee indebtedness program flags thousands of city workers annually, mostly for parking tickets but also for things like unpaid water bills.

In some cases, the same policy weeds out indebted applicants for city jobs.

Both debt programs raise potential equity issues. Lyft said 64% of its Chicago drivers identify with a minority group.

And the greatest amount of ride-share removals come from ZIP codes with almost entirely black residents — including Beale's ward.

But Beale, a member of the Council's Black Caucus, contends it's the ride-share companies that are abusing low-income residents. And one study by the Economic Policy Institute found Uber drivers make less than minimum wage. That's why thousands of Chicago ride-share drivers turned off their apps this summer as part of a global protest on wages.

Josiah Plummer, 24, is a Chicago native and said he drove for Uber and Lyft for two years until last May.

"I would say they're using us," he said. "The demand for their service is becoming greater and greater each day."

Timeline of Rideshares in Chicago Mar 2009: Uber founded as UberCab

Uber founded as UberCab Sep 2011: Uber sets up shop in Chicago

Uber sets up shop in Chicago June 2012: Lyft founded

Lyft founded May 2013: Lyft expands into Chicago

Lyft expands into Chicago May 2014: Chicago creates Transportation Network Program, with first modest regulations.

Chicago creates Transportation Network Program, with first modest regulations. 2015: Lyft and Uber get access to Midway and O'Hare Airports, McCormick Center, and Navy Pier.

Lyft and Uber get access to Midway and O'Hare Airports, McCormick Center, and Navy Pier. Oct 2015: Ald. Beale introduces debt check regulations

Ald. Beale introduces debt check regulations Mar 2016: Uber and Lyft sued for not paying departure tax at airports, and McCormick Center

Uber and Lyft sued for not paying departure tax at airports, and McCormick Center Mar 2016: City enforces debt program asking for removal of 10,000 drivers

City enforces debt program asking for removal of 10,000 drivers Apr 2019: Chicago removes 15,500 drivers for debt

"[The ride-share companies] made it so anybody can be a taxi driver, because it's so easy and convenient," Plummer said. "Consumers are eating it up."

For Plummer, it reached a point where driving for delivery services like Uber Eats, a food-delivery extension of the ride-share business model, became more work than what it was worth — literally.

He racked up dozens of tickets while making deliveries, all while earning less because of shrinking delivery fees and more competition.

And as that competition increased, drivers said they took more risks with things like speeding and double-parking, adding fuel to an already revved up ticketing engine.

The city booted and towed his 2017 Hyundai Elantra before the services had a chance to deactivate him.

"I was doing Uber Eats on the side just to make a little extra money, then I went to doing Uber, Lyft, DoorDash, Postmates, all of the the ride-share convenience apps," Plummer said.

"There would be days where I would start driving for Uber Eats at 10 or 11 in the morning until nine or 10 o'clock at night. And I would make say $70, depending on the weather. Some days it wasn't worth it."

Plummer said he owes more than $3,000 in tickets and late fees, and even more in repossession fees after the dealership retrieved the car from the impound and resold it.

Reforms are too late for some

Lightfoot has taken initial steps to reform the city's ticketing system, which previous administrations had used to plug budget gaps.

toggle caption Manuel Martinez/WBEZ

"The city of Chicago was headed in the wrong direction by sending people into bankruptcy, taking their cars and preventing people from being able to work and contribute to the economy," she said in a speech last month.

"We have given people the ability to be made whole again," she said.

Lightfoot, who campaigned on banning the boot and even removing some of the city's red-light cameras, may be unable to raise fees the way former Mayor Rahm Emanuel did, as the full scope of his fine hikes comes into focus.

Some of the proposed changes would allow low-income residents to put at little as $35 to get on a payment plan, and would give drivers more time to pay off debts.

Sources in Lightfoot's administration said the mayor hopes some of her proposals, which the City Council will vote on this month, will allow indebted drivers to get on a payment plan and reactivate their ride-share privileges.

Even so, the debt program impacts an industry whose labor pool is already financially strained.

Many cash-strapped Chicagoans have opted to leave the city entirely.

That may be the case for Plummer, who currently lives with his mother and sister in a studio apartment in Hyde Park. He is considering moving south because of the cost of living in Chicago — on top of his added debts.

"I was thinking of maybe moving to Georgia or Tennessee, where it's not as expensive."

Elliott Ramos is the Data Editor for WBEZ. Follow him @ChicagoEl.

How we did this

The ride-share debt checks and removals were assessed using data from a Freedom of Information Act request to Chicago's Department of Finance. The data shows the number of drivers flagged during an annual debt check, and subsequent removals after a 90-day period. That data can be found here on the WBEZ data portal.

Additional data on 2019 removals was provided by the Finance Department, which shows monthly on-boarding of those removed this year. That data can be found here.

The average number of monthly drivers was calculated using Transportation Network Provider data from the city's Department of Business Affairs and Consumer Protection via the Chicago Data Portal. The city does not release individual driver information, but provides anonymized data of drivers from monthly reporting periods. We averaged the total amount of monthly drivers in 2019.