In a significant development, Chicago’s city counsel has approved a proposal which will see an imposition of increased taxes on certain ride-hailing trips. The move is aimed at combating traffic congestion in the city. Incidentally, the city counsel and ride providers have accused each other of penalizing low-income passengers.

As per Mayor Lori Lightfoot’s plan, single-passenger trips is set to become costlier while prices of shared rides are set to become cheaper.

The new surcharges on weekday rides in the downtown area is likely to raise $40 million for the fiscal year starting from January 1.

Ride-hailing companies, including Uber Technologies Inc and Lyft Inc have said the new imposition of the new surcharge will hurt low-income residents.

According to an analysis of data by Reuters that are mandatory for ride-sharing companies, taxi fares for shared rides in the city have risen significantly over the last few years, while fares for single riders have remained stable.

According to the analysis, the price increase is likely to impact low-income neighborhoods where the bulk of the carpool rides are booked.