CHICAGO/NEW YORK -- Chicago's mayor rejected an alternative proposal by Uber Technologies Inc. and Lyft Inc. to tax ride-hailing services, accusing Uber of trying to resist any type of regulation by stirring up racial tensions.
Mayor Lori Lightfoot last month proposed raising $40 million from a traffic congestion tax on certain ride-hailing trips, a move Uber and Lyft said would largely hurt low-income residents in Chicago's predominantly black neighborhoods.
This latest battle comes as more U.S. cities pursue taxes to combat what they describe as increasingly clogged streets due to ride-sharing vehicles.
Lightfoot, the city's first female African-American mayor, took aim at Uber's tactics, which she said included offering money to black clergy in the city to oppose the plan.
"They keep throwing up all kinds of things against the wall claiming that somehow this mayor is going to be against black and brown communities," she said during a Wednesday press conference.
Uber in a statement rejected the mayor's claims, saying its alternative plan would raise more money for the cash-strapped city in a more equitable way by not increasing fees on lower-income communities in Chicago's South and West sides.
The company also said it never proposed personal payments to community members.
Lyft backed Uber's position, adding in a statement that it looks forward to working with the mayor and the city council, which is expected to vote on Lightfoot's proposal later this month.
Under the mayor's plan, taxes on single-rider trips would increase to $1.13 from the current 60 cents, while those for shared trips would drop by 7 cents to 53 cents. There would also be a new $1.75 surcharge on weekday rides beginning or ending in a designated downtown area.
The tax is a response to the city's "skyrocketing congestion," partially caused by the rapid growth of ride-hailing, Lightfoot said last month. The additional revenue is also part of her plan to address a big deficit in the city's upcoming budget.