An Uber tax is a great idea in New York. In Austin, it’s not quite as great
The Big Apple’s amazing subway system is becoming less amazing due to years of deferred maintenance. Above ground, traffic is worse than ever, largely due to the thousands of Uber and Lyft drivers ferrying millennials around town.
About 103,000 for-hire vehicles operate in the city, more than double the roughly 47,000 in 2013, according to the Taxi and Limousine Commission. Of those, 68,000 are affiliated with ride-hailing app companies, including 65,000 with Uber alone, though they may also provide rides for others. In contrast, yellow taxis are capped by city law at just under 13,600.
Hence the idea of a small fee on all Uber/Lyft rides.
The ride-hailing services have drawn scrutiny as Gov. Andrew M. Cuomo formulates a congestion pricing plan that would not only reduce traffic, but also raise money to modernize the city’s subways. A state task force, called Fix NYC, is looking at measures including a new per-ride fee on all for-hire vehicles in Manhattan, which would be paid by passengers, according to those familiar with the discussions.
Across the nation, a handful of cities have imposed per-ride fees. Seattle, which began regulating ride-hailing services in 2014, charges two fees totaling 24 cents per ride to cover the costs of regulating and licensing operators and to support wheelchair-accessible cars. Portland, Ore., began charging passengers a fee of 50 cents per ride in 2016 to pay for safety inspections of cars and other regulatory costs.
In New York, an Uber tax should be a slam dunk. In a city where virtually everybody has access to a robust public transit system, ride-sharing apps and cabs aren’t a valuable service, they’re a luxury. An Uber is simply a comfy alternative to the subway or bus. If any New Yorkers beg to differ, I’m all ears, but that’s certainly been my experience.
Therefore, a ride-sharing fee in New York is a luxury tax that finances a critical service that everybody relies on. It’s hard to come up with a more progressive tax scheme. Imposing a similar fee on taxis and those commuting into the city by car also makes perfect sense.
In a city like Austin, however, where public transit isn’t stellar, a tax on ride-sharing apps would not be quite as progressive. Here, ride-sharing apps actually serve a critical role in allowing people to forgo buying cars.
Take my own situation. Jen and I have one car, which she generally takes during the day because she works a few miles outside of town. I generally get around town during the day by bus and bike, but occasionally you gotta spring a few bucks on a ride-share when the transit system just won’t get you where you need to go in a reasonable amount of time. It can cost a pretty penny, but a Lyft here and there is still a helluva lot cheaper than taking on a second car payment.
The same dilemma emerges when it comes to other car-related taxes, whether it’s on gas, car sales, licenses etc. In New York –– particularly in Manhattan –– those taxes disproportionately target those with above-average wealth, since the vast majority of poor or working class New Yorkers don’t have cars. Like most American cities, however, Austin is so built around driving that even those with very low incomes dig deep to own cars. The only really progressive car-related tax I can think of would be one levied on the sale of vehicles above a certain price, or perhaps just new car sales in general.
But an Uber tax in Austin is probably a good idea nevertheless. Indeed, it’s a far more progressive way to raise money for transit than, say, raising bus fares. More importantly, the more we invest in public transit, the closer we get to the most progressive economic outcome possible: a city where people don’t need to rely on cars or Uber to get around town.
Of course, in Austin, this debate is largely academic as long as Republicans run state government. Any new taxes and fees proposed by City Council here would, if not already pre-empted by state law, most likely be struck down by the state legislature in the next session. Of course, in view of the recent election results around the country, it’s likely that the 2018 elections will weaken (but probably not eliminate) the GOP’s control at the Capitol, making it harder to pass bills aimed largely at snubbing Texas’ increasingly liberal city governments.