McPier says Uber, Lyft need to start paying taxes for passenger pickups at O'Hare, Midway

By Scott Holland | Mar 21, 2016

McPier has asked a Cook County judge to order ridesharing services Uber and Lyft begin meeting their obligations to pay a tax each time they pick up passengers at Chicago’s airports.

In a Cook County Circuit Court complaint filed March 18, the Metropolitan Pier and Exposition Authority argued Uber and Lyft have refused to pay the airport departure tax, which is a requirement for all commercial ground transportation from Chicago’s O’Hare and Midway airports.

The tax was first collected Jan. 1, 1993, bringing in about $10 million annually toward repayment of expansion project bonds, the complaint said. The rate doubled on Sept. 1, 2010, so each departure now generates $4. The extra $10 million per year is allocated to Choose Chicago, the nonprofit tourism agency, which gets 75 percent, and Rosemont’s Donald E. Stephens Convention Center. According to the complaint, 26 percent of Choose Chicago’s operating budget comes directly from departure taxes. Both the Chicago Convention and Tourism Bureau and the village of Rosemont are listed as plaintiffs.

According to McPier’s complaint, app-based ride services such as Uber and Lyft fall under the tax ordinance’s definition of “transportation network vehicles” and should collect the tax and remit it to the city, which in November first authorized Uber and Lyft to pick up passengers at the airports. The city of Chicago had been slow in permitting the ride-sharing services, which allow users to order rides through smartphone apps, to pick up and drop off passengers at the city’s two major airports, in part, because of the objections of taxi operators, who have long maintained the ride-sharing services should be subjected to the same kind of regulations applied to traditional cabs.

Per the law, a “transportation network vehicle” is define as “any vehicle used to provide a transportation network service,” which is any “prearranged transportation service offered or provided for compensation using an Internet-enabled application or digital platform to connect potential passengers with transportation network drivers.”

Both Uber and Lyft meet those definitions, according to the complaint, which detailed the process by which passengers arrange for rides from Uber and Lyft drivers and how the companies collect payment from their clients.

According to the complaint, McPier notified Uber and Lyft of the tax obligation on Jan. 7, warning of potential legal ramifications if they failed to pay by Jan. 18. McPier seeks a monetary judgment for the back taxes, along with interest and penalties, as well as other relief the court deems fair. McPier argued the law stipulates it is the company’s responsibility alone to make sure the $4 per ride tax is properly paid for disbursement to McPier.

Attorneys for McPier and the Tourism Bureau include Aharon S. Kaye and Natalie F. Wayne, of Katten Muchin Rosenman, of Chicago. Rosemont’s attorney is Peter D. Coblentz, of Rosenthal Murphey Coblentz & Donahue, of Chicago.

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Organizations in this Story

City of Chicago Lyft Metropolitan Pier Exposition Authority Uber Technologies, Inc. Village of Rosemont

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