Chicago investigates Uber overcharges, how many riders might be in line for refunds
Thousands of Uber riders could be in line for refunds — and Uber could face hefty fines — after the ride hailing company acknowledged that it improperly charged a $1.50 downtown congestion outside the hours it was supposed to be applied.The city’s Department of Business Affairs and Consumer Protection has launched a sweeping investigation to determine how many Uber riders were victimized by the overcharges, first disclosed by Block Club Chicago.The deal that resolved a marathon City Hall budget stalemate last December called for expanding a weekend congestion fee to seven-days-a-week, and lowering the fee from $1.75 to $1.50. The change was expected to raise $8.1 million annually. Related After calling off budget vote to avoid certain defeat, Mayor Johnson must consider ideas he had ruled out The fee is supposed to be imposed only on rides originating between 6 a.m. and 10 p.m. Late-night and early-morning hours were exempt because the City Council did not want to do anything to discourage people who had been out drinking from taking Uber or Lyft home instead of driving drunk.But that’s not what happened.In a yet-to-be-determined number of cases, the $1.50 congestion fee was applied outside those hours. Uber has admitted the overcharges, while insisting that the company did not pocket any of the money.“Due to an internal error, customers have been mistakenly charged the congestion fee after 10 p.m. since January 6th,” the company’s statement said. “These overcharges were remitted to the city. We are actively identifying all affected customers and will issue refunds accordingly.”Ivan Capifali, commissioner of the city’s Department of Business Affairs and Consumer Protection, could not be reached for comment. His spokesperson Elisa Sledzinska did not return calls.Downtown Ald. Brian Hopkins (2nd) said the city's business affairs department has ordered Uber to audit all of its rides since the revised congestion fee took effect and issue refunds to all of the affected passengers — whether or not they apply for a refund or file a complaint.Although the company claims that it did not benefit from the mistake and that all of the overcharges were “remitted to the city,” Hopkins said the city should conduct its own audit with electronic records Uber has been ordered to preserve.“The lesson to be learned here is we made a big mistake ten years ago. This is a predictable outcome of allowing a relatively-unregulated operation to conduct business in an industry that is highly regulated for the other players,” Hopkins said Thursday.“It killed the taxi medallion industry and allowed this type of activity to flourish without the checks and balances that were developed over decades in the taxi industry. This could never have happened in the taxi medallion industry.”Hopkins said his office has been contacted already by a handful of riders.“It appears to be widespread just from anecdotal evidence — people who have responded on social media. My office has gotten a few calls. It doesn’t appear to be isolated,” Hopkins said.One of those riders, who preferred to be identified as Shawn S., said he has paid the mistaken surcharge at least five times during late-night trips returning from visiting a friend downtown. He said he was upset that Uber charged him extra, and wondered when he would be contacted about getting a refund."It doesn't amount to much. But the fact that I was charged something I did not have to pay is upsetting," Shawn said, refusing to give his last name because he works in marketing and does not want to jeopardize working with Uber in the future.Ald. Daniel LaSpata, (1st), chair of the City Council's Committee on Pedestrian and Traffic Safety and was the driving force behind the expanded congestion fee, said he was incensed that Uber was doing the opposite of what the Council intended."We actually thought about... 24-hour enforcement of the congestion zone. But if someone was intoxicated [or] if they're leaving a late-night shift from the bar or restaurant they work at, we don't want to make it more difficult for those folks to get home safe," LaSpata said. "It's clearly not the city's mistake. It's a policy we did not put in place. It's Uber's mistake and I don't think personally that the city should be held financially liable."LaSpata said the overcharges are "really frustrating" and he might be one of the victims. He uses late-night ride shares to and from downtown when he's on a date night with his wife.SEIU Local 1 President Genie Kastrup, who is trying to unionize Uber and Lyft drivers under the Illinois Drivers Alliance, called the overcharges "another example of (what happens) when a company is not regulated."
Thousands of Uber riders could be in line for refunds — and Uber could face hefty fines — after the ride hailing company acknowledged that it improperly charged a $1.50 downtown congestion outside the hours it was supposed to be applied.
The city’s Department of Business Affairs and Consumer Protection has launched a sweeping investigation to determine how many Uber riders were victimized by the overcharges, first disclosed by Block Club Chicago.
The deal that resolved a marathon City Hall budget stalemate last December called for expanding a weekend congestion fee to seven-days-a-week, and lowering the fee from $1.75 to $1.50. The change was expected to raise $8.1 million annually.
The fee is supposed to be imposed only on rides originating between 6 a.m. and 10 p.m. Late-night and early-morning hours were exempt because the City Council did not want to do anything to discourage people who had been out drinking from taking Uber or Lyft home instead of driving drunk.
But that’s not what happened.
In a yet-to-be-determined number of cases, the $1.50 congestion fee was applied outside those hours. Uber has admitted the overcharges, while insisting that the company did not pocket any of the money.
“Due to an internal error, customers have been mistakenly charged the congestion fee after 10 p.m. since January 6th,” the company’s statement said. “These overcharges were remitted to the city. We are actively identifying all affected customers and will issue refunds accordingly.”
Ivan Capifali, commissioner of the city’s Department of Business Affairs and Consumer Protection, could not be reached for comment. His spokesperson Elisa Sledzinska did not return calls.
Downtown Ald. Brian Hopkins (2nd) said the city's business affairs department has ordered Uber to audit all of its rides since the revised congestion fee took effect and issue refunds to all of the affected passengers — whether or not they apply for a refund or file a complaint.
Although the company claims that it did not benefit from the mistake and that all of the overcharges were “remitted to the city,” Hopkins said the city should conduct its own audit with electronic records Uber has been ordered to preserve.
“The lesson to be learned here is we made a big mistake ten years ago. This is a predictable outcome of allowing a relatively-unregulated operation to conduct business in an industry that is highly regulated for the other players,” Hopkins said Thursday.
“It killed the taxi medallion industry and allowed this type of activity to flourish without the checks and balances that were developed over decades in the taxi industry. This could never have happened in the taxi medallion industry.”
Hopkins said his office has been contacted already by a handful of riders.
“It appears to be widespread just from anecdotal evidence — people who have responded on social media. My office has gotten a few calls. It doesn’t appear to be isolated,” Hopkins said.
One of those riders, who preferred to be identified as Shawn S., said he has paid the mistaken surcharge at least five times during late-night trips returning from visiting a friend downtown. He said he was upset that Uber charged him extra, and wondered when he would be contacted about getting a refund.
"It doesn't amount to much. But the fact that I was charged something I did not have to pay is upsetting," Shawn said, refusing to give his last name because he works in marketing and does not want to jeopardize working with Uber in the future.
Ald. Daniel LaSpata, (1st), chair of the City Council's Committee on Pedestrian and Traffic Safety and was the driving force behind the expanded congestion fee, said he was incensed that Uber was doing the opposite of what the Council intended.
"We actually thought about... 24-hour enforcement of the congestion zone. But if someone was intoxicated [or] if they're leaving a late-night shift from the bar or restaurant they work at, we don't want to make it more difficult for those folks to get home safe," LaSpata said. "It's clearly not the city's mistake. It's a policy we did not put in place. It's Uber's mistake and I don't think personally that the city should be held financially liable."
LaSpata said the overcharges are "really frustrating" and he might be one of the victims. He uses late-night ride shares to and from downtown when he's on a date night with his wife.
SEIU Local 1 President Genie Kastrup, who is trying to unionize Uber and Lyft drivers under the Illinois Drivers Alliance, called the overcharges "another example of (what happens) when a company is not regulated."
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