Dive Brief:
- D.C. Council unanimously approved a 5% tax hike on ride-hailing services such as Uber and Lyft on Tuesday, according to NBC Washington and others.
- The approval increases the tax from 1% to 6% and is projected to raise approximately $23 million to help pay for the costs of the Metro public transit system.
- Mayor Muriel Bowser had previously opposed the measure and called instead for a tiered ride-hailing tax system, but she is expected to approve the raise as part of the council’s FY 2019 budget. Both companies released statements to NBC Washington after the vote saying they were “disappointed.”
Dive Insight:
In the lead-up to this vote, Uber CEO Dara Khosrowshahi had called on D.C. Council to make sure any ride-share tax was “fair and equitable,” although he was keen to point out that neither he nor the company were opposed to a tax to help pay for public transportation. At the same event, Bowser said it was important to use the money to pay for Metro — and honor D.C.’s obligation under a just-approved funding package — rather than take it away from other infrastructure needs.
Both ride-share companies had urged the D.C. Council to consider the tiered system, which would have taxed pooled rides at a lower rate.
D.C. follows in the footsteps of Chicago, which was the first city to create a ride-hailing fee dedicated to transit. Through that fee — an extra 15 cents per trip, which the city began collecting in January — Chicago has already been able to invest in its Safe and Secure initiative, which will add security cameras, new lighting and video monitors to rail stations across the city.
D.C. lawmakers hope the money raised can go towards similarly good work and help the much-maligned and oft-criticized Metro system, which has faced declining ridership due to faulty services and schedule delays. The companies as well as other cities likely will be watching closely to see if a 5% across-the-board hike makes a dent in Uber and Lyft’s ridership in the city.
