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The Bottom LineThe Bottom Line

Economics in Brief: Meet the NYC Driver-Owned Rideshare App Taking on Uber

Also: Banks are “weaning themselves” off of overdraft fees, and a major film-industry investment comes to Chicago’s South Side.

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Meet the Driver-Owned Rideshare App Taking on Uber

The Drivers Cooperative in New York has launched Co-op Ride, a ride-hailing app that competes with Uber and Lyft. What makes Co-op Ride different? It’s owned by the drivers.

Next City has previously reported on the origin and structure of Co-op Ride. Now, however, the app is live and accepting rides, the New York Times reports.

The co-op says it can charge riders less than Uber or Lyft while taking a smaller commission. It will pay 10 percent above the wage minimums set by the city’s Taxi and Limousine Commission. And profits will be returned to the driver-owners as dividends.

“I’ve never seen this hunger for change that exists with drivers. Every single transaction reveals exploitation,” Erik Forman, a labor organizer and a founder of the Drivers Cooperative, told the Times. “They feel like a way to regain control is to have control and ownership over the platform.”

More Banks Say Goodbye to Overdraft Fees

Four major banks this year have agreed to reduce or eliminate overdraft fees, American Banker reports. The moves are in response to competition from low-cost alternatives, like fintech startups, the publication said, as well as an expected increase in “regulatory scrutiny.”

Ally Financial—the online-only bank from Ally—and Huntington, the 35th largest bank in the U.S., based mostly in the Midwest, both announced this week they were doing away with overdraft fees; Ally by simply not charging them, Huntington by offering interest- and fee-free loans to cover overdrafts. Earlier this year, PNC said it would alert account holders before they overdraft and give customers a way to block transactions or add money before overdraft fees are imposed; the Texas-based Frost Bank said the same month it would waive overdraft fees on transactions below $100.

Diane Morais, Ally’s president of consumer and commercial banking, told American Banker that while the $5 million in overdraft fees Ally collected last year is not a major revenue source, the bank understands the stress overdrafts can put on households, especially Black and Latino customers.

Overdraft fees also disproportionately affect households that are already financially insecure. American Banker cites research by the nonprofit Financial Health Network that found that more than half (56%) of the $12.4 billion in overdraft fee revenue collected by banks last year came from “vulnerable” households; another 40 percent came from “coping” households. Financial Health Network defines “vulnerable” households as those that struggle in nearly all aspects of their financial lives, while those that are “coping” have some financial struggles. Only 4% of overdraft fee revenue came from financially healthy U.S. households, who make up 35% of the population.

TV Producer Wants Chicago to Be the Hollywood of the Midwest

The producer of “The Chi” plans to bring thousands of jobs to Chicago’s South Side and turn Chicago into “the Hollywood of the Midwest,” the Chicago Tribune reports.

The $60 million project on 7 acres of vacant land in the South Side would create six sound studios and offices. It also ties into Mayor Lori Lightfoot’s $750 million INVEST South/West program, which Next City has previously covered.

Film producer Derek Dudley and Loop Capital chairman and CEO Jim Reynolds are leading the project, called Regal Mile Studios. Both grew up in the area.

“For me and Jim, two Black men from the South Side of Chicago, we have the opportunity to come together to invest in our community and change the trajectory,” Dudley told the Tribune.

The developers also hope to hire young people from the area; they’re in talks with Chicago Public Schools to train students for union jobs that don’t require a college degree.

So far, city officials seem to be on board. The Regal Mile Studios website quotes Kwame Amoaku, director of the Chicago Film Office:

“The Regal Studios Project represents a vital source of infrastructure for the film industry in the City of Chicago. It also represents a major cultural revolution for the South Side of Chicago by providing a catalyst for the development of an arts and entertainment district for this underserved area of the city.” ​

The developers have submitted an application seeking a zoning change to the City Council, which will determine if the project moves forward, Reynolds told the Tribune.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Tags: new york cityjobschicagoeconomic developmentbanksride-hailing

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