UPDATE: At an event in Washington, DC on Wednesday, April 11, Uber CEO Dara Khosrowshahi said that while the company is not completely opposed to a tax on for-hire vehicle services in DC, more discussion is needed to ensure it is "fair and equitable."

"In addition to fairness, and what we're sensitive to and what we want to make sure of is that we’re not taxing one form of shared transportation for another form of shared transportation," he said.

DC Mayor Muriel Bowser emphasized the need of levying the tax to help pay for a dedicated funding stream for Metro, rather than "taking this money away from roads, sidewalks, trees and alleys, so we have to raise that additional money." There appeared to be broad agreement for the two to fund public transportation, although negotiations are set to continue.

"We think that mass transit is a very important part of any city ecosystem," Khosrowshahi said.

Dive Brief:

• Washington, DC Mayor Muriel Bowser proposed her FY 2019 budget on March 21, under which the District would raise taxes on for-hire vehicle services, like Uber and Lyft, in order to increase funding for Metro.
• For-hire vehicle tax would increase by 3.75% (from 1% to 4.57%), while sales tax would increase by 0.25% (from 5.75% to 6%) and commercial property tax would increase by 2 cents. These new revenues would add more than $80 million to Bowser's proposed $178.5 million fund for Metro improvements. The other $98 million would come from savings in the budget.
• The Washington Post reports that Bowser "defended the fee increase as bringing ride-hailing companies on a par with taxis, which are taxed at 50 cents per trip."

Dive Insight:

DC is looking to follow in the footsteps of Chicago, which was the first city to create a ride-hailing fee dedicated to transit, "making it possible to continue to invest in the latest technology and improvements that enhance commuting and improve the quality of life in our city," Chicago Mayor Rahm Emanuel said in a statement. Through that fee — an extra 15 cents per ride-share 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. 

However not everyone is convinced that a tax on for-hire vehicles is the best move for the District and its residents. Lyft spokeswoman Campbell Matthews told The Washington Post that the new tax will disproportionately impact low-income residents, and the company is concerned about ride-share affordability for folks who live far from public transit services.

If DC is successful in collecting appropriate funds for Metro improvements, it could encourage a shift in how residents move around the city. Washington Metropolitan Area Transit Authority (WMATA) has faced a significant decline in ridership over the past few years due to faulty services and schedule delays, which has ultimately increased the popularity of ride-share services — and the number of cars on the road. Through improved services and rider-focused programs, DC has a crucial opportunity to take public transit back and increase city mobility while decreasing congestion.