(Bloomberg) -- Lyft Inc. is asking its customers in Chicago to urge the city’s council to reject a proposed tax on rideshares in the downtown zone during the weekend, marking the latest hurdle as Mayor Brandon Johnson races to close a nearly $1 billion deficit by year-end.
A proposed ordinance seeks to raise as much as $15 million a year by slightly expanding Chicago’s downtown zone and extending a surcharge currently levied on rideshare services during the weekdays through weekends. Alderman Daniel La Spata introduced the ordinance this month as a way to reel in more revenue from recreation and tourism dollars as the City Council searches for ways to close a $982.4 million deficit.
“The Chicago City Council is considering another tax on rideshare,” according to an email Lyft sent to Chicago riders on Thursday. “If passed, riders like you may face price increases. On top of high costs of living and inflation, this is the last thing riders in Chicago need.”
A spokeswoman for the city’s budget department, LaKesha Gage-Woodard, declined to comment on the proposed ordinance or Lyft’s stance, given the city is in the midst of budget negotiations.
Lyft also urged riders on Thursday to send emails to their aldermen through a website the company created and urge lawmakers to reject the proposal if it comes up for a vote. The proposed ordinance has been referred to the city council’s finance committee. More than 2,000 emails have been sent to City Hall through this process as of Friday morning, according to a Lyft representative.
Chicago is the latest city facing battles from rideshare companies. In New York City, one of the largest rideshare markets, Lyft and Uber Technologies Inc. are engaged in a regulatory battle, where city regulators are expected to propose changes to driver minimum pay rules by the end of the year. Uber did not respond to emails seeking comment.
“People across the entire city have already voiced their concerns about tax increases and have swiftly rejected those ideas,” according to a statement on Lyft’s website. “Chicagoans already pay extra taxes on rideshare, and this proposed increase will only make it harder for people to get to medical appointments, the grocery store, or simply a way home.”
Lyft’s challenge is also the latest facing Johnson, a progressive Democrat who is trying to find new sources of revenue. He and the city council face a statutory deadline of Dec. 31 to pass a budget. Johnson has resisted cuts and aldermen unanimously rejected his $300 million property tax increase last month. The two sides now are negotiating piecemeal ideas to raise taxes.
La Spata said his proposed ordinance is “fair, transparent and equitable.”
--With assistance from Natalie Lung.
(Updates number of emails sent to city from Lyft website in fifth paragraph.)
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