Mayor Bowser is proposing a tax increase on ride-sharing services in Washington, D.C. under the new budget plan. The tax increase will go towards improving the Metro.
Uber and Lyft have become a real lifesaver for many people, especially those living in metropolitan areas. Soon Uber and Lyft rides could cost a little more in Washington, D.C. if the newly released budget plan goes through.
The new tax under the $14.5 billion budget plan would increase the total tax rate for rides from 1 percent to 4.75 percent. For cheaper rides, this tax will only cause a small increase in the total cost. For example, a $20.20 Uber ride would cost $20.95 under the new budget plan.
The Mayor’s office stated that there would be no price increase on cab rides because riders are already charged a flat 50 cent fee per trip.[caption id="attachment_8186" align="aligncenter" width="664"] Courtesy of Politico[/caption]
The taxes collected from the rides will go towards improving the Metro. The Metro is currently funded by Virginia, Maryland, Washington, D.C. and the federal government. Despite this, it does not have a dedicated funding source and is the only subway system in the country not to have one. A commercial property tax increase and small sales tax increase will also be used to help generate an estimated $80 million for the Metro.[caption id="attachment_8183" align="aligncenter" width="667"] Courtesy of The Hill[/caption]
Mayor Bower’s proposed tax follows a similar plan passed in Chicago last year. The city passed a 15-cent fee increase for riding sharing services to fund improvements to their public transportation.
Mayor Bower told reporters, “Everybody benefits from a safe, reliable and functioning Metro whether you ever get on the Metro or not. Having a safe and reliable and functioning Metro means we have less congestion in our city, we can attract more residents and businesses, and everyone benefits.”
Not everyone is supportive of the proposed tax increase. Lyft spokesman Campbell Matthews stated, “While we are supportive of efforts to improve transit options, it is also critical that ride-share remains affordable for the tens of thousands who rely on Lyft in D.C. — particularly those who live further from transit or need a ride when public transit doesn’t operate.”
The City Council will soon vote on the 2019 budget plan.
What do you think? Is a tax on ride-sharing services to help the Metro fair? Will you keep using ride-sharing apps if it becomes more expensive?