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Raising Taxes on Ride Sharing Harms the Public

Originally published at The Seattle Times

Call it a head tax on wheels. The recently announced plan to triple the Seattle city taxes on all ride-share trips — to 75 cents from 24 cents, which would create the highest flat ride-share tax in the U.S. — is out of the same playbook that brought us the 2017-18 tax on jobs. It would hurt working people and others who use the Uber or Lyft ride option, reduce income for drivers by up to an estimated $1,800 a year and increase traffic congestion rather than alleviating it.

More than half the revenue generated by the tax would be used for programs that have nothing to do with transportation, though transportation problems constitute some of the public’s greatest concerns. The tax reflects a growing attitude in government that new technologies and business models are more a source of revenue than a partner in solving pressing urban problems.

We have been among those promoting new technologies and tactics to help alleviate downtown traffic congestion, cut carbon pollution and reduce the need to drive your own vehicle downtown. The “ACES” coalition that we co-chair stands for “Autonomous, Connected, Electric and Shared Mobility.” Notice the word “shared” in there. It is one part of a strategy for better transportation. Why? Because ride sharing effectively reduces the number of vehicles in the urban area while only representing 4.7% of the total overall annual vehicle trips.

In 2018, there were 24 million ride-share trips that originated in Seattle, which is likely to increase to 28 million this year. Who uses ride-shares? People in businesses that keep odd hours, travelers who would otherwise rent a car, working class people for whom Uber or Lyft are valued options, individuals who attend restaurants or bars or concerts and want a safe ride home without parking hassles. Older people. Disadvantaged people.

Many Seattleites live in low-density neighborhoods not served directly by public transportation. Even so, 67% of people who use Uber and Lyft also use transit during the week, so, overall, ride share is not interfering with bus and rail use, but rather aiding it. Accordingly, ride sharing should not be treated as if it were a negative force in our community, and penalized through regressive taxes, but rather welcomed and better integrated with transit as a partner.

During the Viaduct closure, Uber and Lyft offered discount rides to transit centers, and the city and King County contracted with the private Hopelink agency to connect people to the West Seattle Water Taxi. The city also contributes to Metro’s popular Via to Transit program using private ride sharing to connect folks in South Seattle and Tukwila to Link Light Rail.

In various ways, the disincentives of the proposed ride sharing tax hike run counter to the city’s own goals. For example, Seattle has a “Vision Zero” plan for cutting down on traffic injuries and deaths. In pursuit of safety, Seattle’s thriving hospitality industry encourages ride sharing to get customers home after social functions. Do we really want young people and others of limited means to think twice about splitting a higher UberPool or Lyft Line fare home from a downtown or Ballard music scene?

Likewise, the mayor and City Council surely know that crime is a concern around some bus stops downtown and elsewhere. Providing office employees who work late with a ride-share option to get home makes good sense, especially as dark winter hours descend. So how does raising taxes on ride shares make that more available, particularly when a future Council can raise the tax higher for pet projects?

It is argued by some that ride sharing pickups slow traffic on busy streets. Maybe so, but the solution is to expand the city’s pilot project on Boren Avenue for pick up and drop off curb space to Fourth Avenue and other downtown locations based on recommendations from ride share drivers and University of Washington Urban Freight Lab research.

Long term, the city should incentivize building developers to convert the first floor of parking garages to covered pick-up and drop-off areas for ride share, e-commerce deliveries and wheelchair accessible vans. Ground level “E-Mobility Hubs” could function as fast charging stations in garages for electric vehicles, assisting the “Drive Clean Seattle” program Mayor Jenny Durkan has championed.

There are special interests who would be happy if ride sharing could be curtailed. But the only special interest of City Hall should be the welfare of average citizens. Ride shares alone won’t solve our transportation problems, of course, but they can contribute to overall improvements. So why handicap them?

Tom Alberg

Managing Director, Madrona Venture Group
Prior to co-founding Madrona Venture Group in 1995, Mr. Alberg served as President of LIN Broadcasting Corporation and Executive Vice President of McCaw Cellular Communications, Inc. He currently serves as a director for Madrona portfolio companies, including Impinj, and Wireless Services. In addition, he serves on the boards of two public technology companies, Advanced Digital Information Corporation and Amazon.com, located in the Northwest.

Bryan Mistele

Board of Directors, Discovery Institute
Bryan Mistele is the co-founder, President & Chief Executive Officer of INRIX, a leading provider of connected car services and transportation analytics. INRIX is at the forefront of connecting cars to smarter cities in more than 88 countries around the world. Bryan started INRIX in 2004, having had more than 15 years experience building high-technology businesses and transforming industries through the power of information technology As a leader on technology and transportation issues, Bryan is a popular speaker on the future of transportation. Bryan has served as a member of the Bipartisan Policy Center’s National Transportation Policy Project, as a member of the United States Department of Transportation’s ITS Advisory Committee, and as a board member of the Intelligent Transportation Society of America. Bryan is co-founder of ACES Northwest – a group committed to the adoption of Autonomous, Connected, Electric and Shared vehicles. Prior to INRIX, Mistele was an executive at Microsoft. Bryan holds a B.S. in computer engineering from the University of Michigan and an MBA from the Harvard Business School.