Making Government Work

Chicago’s Plan to Democratize Taxi Technology

October 31, 2014
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Chicago’s Plan to Democratize Taxi Technology
Chicago wants an all-in-one app that can let users look for the nearest transportation service. Scott Olson/Getty Images
The city wants to change the way its citizens hail cabs.

The “Uber effect” has reverberated throughout the world across a number of industries, creating marketplaces and leveling competition. But rather than conceding to Uber’s dominance in the taxi business, Chicago is taking the reigns in deciding who will lead the city in taxi and ride-sharing services.

The Chicago Department of Business Affairs and Consumer Protection will begin accepting bids from companies to design a universal app for city dwellers to use to hail a cab, the Chicago Tribune reports. The city is looking for an all-in-one app that can let users look for the nearest service, rather than using individual apps like Uber or Lyft or calling one of the city’s numerous taxi services.

The government-sponsored project is similar to the Department of Transportation partnering with Alta Bicycle Share to develop the city’s bike-sharing program, Divvy.

The city wants an app that “riders find it easy enough to use, and, most importantly, are protected,” and “wants to ensure that a competitive procurement process is followed and respected,” says Mika Stambaugh, spokeswoman for the Department of Business Affairs and Consumer Protection. A proposal to create the app has been submitted to the City Council, as a part of a series of changes with the goal of increasing taxi driver income without changing the taxi fare infrastructure.

But the concern lies with the potential of a company like Uber winning the bid and ultimately taking control of the industry in Chicago. Uber, which began as an alternative to taxis by connecting off-duty black car drivers with riders, has now launched a series of services that has created backlash among the taxi industry.

“Government is essentially endorsing one app as the centralized dispatch,” says George Lutfallah, publisher of Chicago Dispatcher, a taxi trade publication. “My concern is that it limits choice, and that whoever wins the contract won’t have as strong of an incentive to serve the drivers and the customers.”

While the city does not maintain data on how many rides are through taxicabs, private black cars or limousines and ride-sharing operations, there are almost 7,000 licensed taxicabs and 15,327 taxicab and livery drivers throughout Chicago, according to the TribuneTransportation experts estimate around 60 to 70 percent of the market belong to taxis, limousines making up around 20 percent and ride-sharing services taking up the remaining 10 percent.

But with the potential of the growing ride-sharing industry, those estimates could soon change. Which is why it’s important that the company selected to design the app is truly leveling the playing field.

MORE: The Start-Up That’s Recruiting 50,000 Military and Veteran Drivers

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