Uber and Lyft Opened the Door. Then They Kept Most of the Money.

Chicago had roughly 91 million rideshare trips in 2024. That's according to the city's own Transportation Network Provider dataset — approximately 249,000 rides a day, every day, all year. The average fare was about $17. The average total charge to the rider, after fees and surcharges, was about $23.

So here's a simple question: of that $17 fare, how much actually went to the driver?

The answer, per the best available industry data, is roughly 60 cents on the dollar — and it's been shrinking. Uber's average take rate hit 40% in 2023 and has been climbing since, according to analysis from Gridwise and YipitData cited in a May 2025 report by the National Employment Law Project. On individual rides, the platform cut can reach 65 or 70%. The "advertised" commission rate and the real one are two very different numbers — because Uber and Lyft have quietly shifted to "upfront pricing," where they charge riders one amount and pay drivers based on a separate calculation the driver never fully sees.

This is not a secret. It is, however, worth sitting with — especially when you compare it to the system Uber and Lyft effectively destroyed to get here.

The Old System: Exclusive, Expensive, and More Honest About the Money

Before rideshare, driving for hire in Chicago meant getting a medallion. A medallion was a city-issued license that gave you the legal right to operate a taxicab. There were a fixed number of them, they were tradeable assets, and at their peak in 2013–2014 they were worth nearly $700,000 each. The total value of Chicago's medallion supply hit $2.5 billion in 2013.

That's an absurd amount of money to pay for the right to drive people around. And it created a system that was, by design, exclusionary. Not everyone could afford to buy a medallion outright. Most drivers leased one from a cab company — typically for $250 to $400 per week — which meant they were paying overhead before they turned a single wheel. A 2014 City of Chicago fare study found that after all expenses, Chicago taxi drivers averaged about $120 net income per day, or roughly $33,857 per year if they worked full-time. That works out to about $12.14 per hour — not great, but above minimum wage at the time.

Importantly, the cab company's cut came in the form of a fixed weekly lease — not a percentage skimmed off every single trip. Once the driver covered that lease, the meter fare was largely theirs. The economics of each ride were visible and predictable. You knew what you were getting.

The model was: high barrier to entry, but once you're in, the math is legible. That legibility mattered.

What Rideshare Actually Changed

Uber and Lyft blew up the barrier-to-entry part. You don't need a medallion. You don't need $700,000 or even $400 a week for a lease. You need a car, a smartphone, a background check, and — since a 2017 Chicago ordinance — a chauffeur's license you can earn online. The city now has over 87,000 active rideshare drivers, compared to a taxi fleet that, at its peak, had around 7,000 medallion cabs.

That democratization is real. For a lot of people — immigrants, side-hustlers, people between jobs — rideshare provided income access that the taxi medallion system never would have. The old system wasn't just exclusive; it was corrupt in its exclusivity. Medallion prices were inflated by speculation, the big owners extracted wealth from drivers who could never afford to buy in, and the city's licensing regime protected incumbents more than riders or workers.

Rideshare genuinely fixed some of that. It's worth saying plainly.

But here's what it replaced that exclusion with: a platform that takes 40 cents of every fare dollar, sets the prices, sets the pay formula, classifies drivers as independent contractors so it owes them nothing in benefits, and then lobbies aggressively against any city ordinance that would require it to pay a minimum wage.

The barrier to entry came down. The extraction rate went up.

The Union Analogy — and Where It Breaks

Here's the framing worth thinking about: Uber and Lyft functioned like a union in one specific sense. They organized access. They said: you don't need to own a medallion or know the right people. You can work. Tens of thousands of people who couldn't get into the old system got into this one.

But a union exists to protect its members from the employer. Uber and Lyft are the employer — or close enough that the distinction barely matters. A real union negotiates on behalf of drivers against the platform. What Uber and Lyft did was lower the door fee while raising the ongoing toll. They made the club easy to join and then made sure the club didn't pay very well.

With rideshare, the driver sees the payout after the fact. Uber's upfront pricing means the company can charge the rider more than what the driver's pay formula would imply — and pocket the difference. The NELP analysis documented cases where Uber's effective take on a single ride exceeded 65 or 70%. The average is bad. The ceiling is worse.

It's worth separating Lyft from Uber here, because Lyft has actually tried to address this. In early 2024, Lyft introduced a 70% earnings guarantee: drivers will earn at least 70% of rider payments each week, after external fees like insurance and taxes, and if they fall below that threshold Lyft pays them the difference. It's a real floor, not a talking point. The caveat is the denominator — "after external fees" means the 70% is calculated on a smaller base than the gross fare, so the actual percentage of what you paid as a rider that reaches the driver is still lower than 70%. But the direction is right, and it's more than Uber has done. Credit where it's due.

249,000 Trips a Day. Somebody's Sitting in That Traffic.

Here's the part of the rideshare story that doesn't get enough attention in Chicago: the traffic.

A 2021 MIT study found that ridesharing increased both the intensity and duration of road congestion in major U.S. cities. The researchers identified a key culprit: deadheading — the miles a driver logs with no passenger in the car, circling between pickups. According to that research, roughly 40.8% of all rideshare miles are deadhead miles. Empty cars, burning gas, taking up lane space, going nowhere useful.

In Chicago specifically, a 2018 Crain's Chicago Business investigation found that the number of licensed ride-hailing vehicles on city streets increased 339% in less than three years — from March 2015 to December 2017 — reaching nearly 118,000 vehicles. That's not a rounding error. That's a city that went from having roughly 7,000 taxi cabs to having 118,000 additional for-hire vehicles on the road in under three years.

Vehicle miles traveled in cities like Chicago shot up roughly 10% after rideshare took hold, according to transportation research cited by the Virginia Transportation Gateway. The same MIT study found that ridesharing substituted for public transit ridership by nearly 9% — meaning people who previously took the L or a bus are now sitting in a car instead, and that car is adding congestion both when occupied and when deadheading to the next pickup.

If you've noticed Chicago traffic feeling worse over the past decade, you're not imagining it. You're also probably not blaming the right thing. Rideshare doesn't get the same heat as a highway expansion or a new parking garage, but the math is the math: 249,000 trips per day, nearly half of all miles driven empty, and a business model that actively incentivizes drivers to stay on the road as long as possible. That's a lot of cars.

The Political Playbook — and Why It Keeps Working

The most recent attempt to regulate driver pay was the Rideshare Living Wage and Safety Ordinance, which would have established a per-mile, per-minute pay floor for Chicago drivers — enough to actually hit the city's $16.20 minimum wage after expenses, which advocates say current drivers don't reach. It cleared a joint City Council committee unanimously. Then Uber and Lyft threatened to leave Chicago entirely.

By June 16, 2025, the measure was tabled. A new version is back on the table in June 2026. The companies are running the same playbook: threaten exit, flood alderpersons with lobbying, wait out the political will. It has worked in Chicago. It has worked in city after city.

This is not an isolated case. It's a pattern. Consider the personal delivery device pilot — the program that put food-delivery robots on Chicago sidewalks. The City Council passed that pilot in 2022 with remarkably little public debate, and by 2026 residents in affected neighborhoods were circulating petitions to ban the devices after collisions and sidewalk blockages became routine. One alderperson in the 1st Ward had to step in to halt expansion in his neighborhood after constituent backlash. The program continues through at least May 2027.

In both cases — rideshare labor rules and delivery robots — the pattern is the same: companies move fast, lobby hard, get the initial ordinance written on favorable terms, and then make it politically costly to revisit. The city ends up dependent on the revenue, the regulatory window closes, and the workers or residents absorbing the costs are left making noise that mostly goes unheard at City Hall.

Chicago collected an estimated $233 million in rideshare ground transportation taxes in 2024. The FY2025 budget projects $419.7 million in total transportation tax revenue — a figure that depends heavily on rideshare volume staying high. That dependency is not an accident. It's leverage, and Uber and Lyft know exactly how to use it.

The Medallion Wreckage

The other side of this story is the people who got crushed in the transition. Chicago taxi medallions, which sold for nearly $700,000 at their 2013–2014 peak, were worth roughly $30,000 by 2019 — an 80% collapse in value. Forty percent of the city's cab fleet went out of operation. Drivers and investors who took out loans to buy medallions at peak prices were left holding debt on an asset worth almost nothing.

A 2019 New York Times investigation documented how speculators — many from out of state — had pumped up medallion prices in Chicago and other cities, leaving working drivers holding the bag when the crash came. Those drivers didn't create the bubble. They inherited its wreckage.

The old taxi system had real problems. But when it collapsed, the people who paid the price weren't the medallion speculators. It was the drivers who leased from them.

So What Do You Do With This?

I'm not telling you to stop using Uber and Lyft. I use them. Most Chicagoans do — 91 million times a year, apparently. But there are a few things worth having a clear-eyed view on:

• The driver you're riding with is keeping about 60% of your fare, and that number has been declining. If you tip in the app, that goes directly to the driver. It matters.

• Lyft is doing something about it; Uber isn't. Lyft's 70% weekly earnings floor is imperfect but it's a real commitment. If driver pay is something you care about, that's a meaningful difference between the two apps.

• Your ride is contributing to Chicago's traffic problem in ways that don't show up in your fare. Nearly half of all rideshare miles are empty cars in transit. That's on all of us.

• The city is financially hooked. $233 million in annual rideshare tax revenue means Chicago has a structural interest in keeping these companies happy, which helps explain why the living wage ordinance keeps getting tabled.

• The political leverage is real and growing. Uber and Lyft's ability to threaten exit and stall regulation isn't unique to rideshare — it's the same muscle being flexed on delivery robots, on driver safety rules, on anything that touches their margins. Recognizing the pattern is the first step to pushing back on it.

The interesting question isn't "rideshare good or bad." It's: what kind of deal did Chicago actually make here? We got cheap, accessible rides. The drivers got a worse cut than the cabbies they replaced. The streets got more congested. The city got dependent on the tax revenue. And every time the Council tries to rebalance any piece of that deal, the companies threaten to take their ball and go home.

That's worth understanding clearly — regardless of what you think the right policy answer is.

This piece was researched and drafted with AI assistance and edited by the ward51 team.