DC proposes ride hailing tax of 6%: It's not enough--car share users pay 10%
The Washington Post reports that DC ("D.C. Council would hike tax on Uber and Lyft more than Mayor Bowser"), like other cities are considering or have instituted ("Council Passes Ride-Share Tax to Fund Transit, CTA Announces $23M in Cuts, Reforms," Streetsblog Chicago; "Uber, Lyft taxi rides into Manhattan get slapped with a new surcharge," The Drive) a tax on ride hailing.
DC charges a "gross receipts tax" of 1% on these services now. This is not a per trip tax. The Mayor proposed a raise to 4.75%, while the City Council is aiming for a 6% tax.
It's reasonable to regulate and tax to shape more desirable outcomes. Ride hailing imposes costs on transit by capturing riders, and also increases traffic congestion.
-- "When Calling an Uber Can Pay Off for Cities and States," New York Times
-- "The false promise of ride hailing as a pro-city transportation mode," 2018
-- "Public fees/taxes/charges on ride hailing trips," 2018
As new mobility services come into play, taxation and regulation may vary compared to legacy services, often in ways that are seemingly less fair to users of the new modes.
DC imposes higher taxes on car share users. For example, as a car share user in DC, it seems unfair that each trip comes with a 10% local tax charge when we are already paying a good chunk of the minute or hourly use fees indirectly to the city for licensing and access to street parking.
By comparison, DC car owners pay a minimal annual registration fee (from $72 to $155, depending on the weight of the car) and if they live in an area of the city requiring residential parking permits, a $35/year fee.
-- "Car share users are getting abused by the cities that ostensibly support car sharing as a form of sustainable mobility," 2016
Considering the impact of ride hailing services on transit and congestion, of course the rides should be taxed. And they shouldn't be taxed at a rate less than what car share users are forced to pay, when research shows that each car in a car sharing system ends up "removing" 7 to 11 cars, thereby reducing demand on parking inventory, rather than increasing demand for road space, like ride hailing.
Labels: car sharing, externalities and taxation, public finance and spending, regulation/regulatory policy, taxi services/ride hailing, transit funding
posted by Richard Layman @ 2:49 PM&Permanent Link
6 Comments:
car2go left the miami or miami beach market based on the this tax problem.
Although good news! Uber is shooting itself in the food with UberPool -- if I am paying I don't want to share a car with more strangers and that brings car2go pricing back to reasonable looking.
You should also write about car2go and North Arlington; basically they need to serve it. Yes is is car dependent. That is the point! Much like Takoma you actually get a bigger bang for your buck with car sharing in those areas versus highly dense areas (where it should be walking).
Personal note -- I bought my own electric scooter for the summer.
Off topic: https://www.ft.com/content/3d07e78e-59cf-11e8-bdb7-f6677d2e1ce8
1. In Hoboken, where they have been purposeful in using car sharing as a parking demand and supply management tool, they've been hosed by NJ's treatment of this use as "car rental" with high taxes for each trip use. Not sure if they got NJ to change it. If not the new regime ought to be amenable.
The DePaul Institute seems to be one of the only academic think tanks pointing this stuff out.
I wuz gonna mention the UPS vs. FedEx problem but it would be too arcane, but as a similar example. UPS, being older and originally railroad-based, is regulated under RR laws, while FedEx is regulated under airline laws, which are less "onerous" worker rights and pensions-wise.
Regardless, they should be regulated the same way.
Same goes with ride hailing/taxis, car owners vs. car sharing, etc.
2. WRT North Arlington, probably they just need more cars. I was really surprised to see with Car2Go in the beginning that a goodly number of initial members were from the outskirts of the city. You would see cars "pile up" in certain places, like along Eastern Ave. abutting Silver Spring. Plus, if there are facilities like schools, that can be a demand driver for staff use etc. (the case with the charter school 1.5 blocks away, which then helps serve locals).
But I also wrote a piece about how Mt. Rainer should make an entreaty to Car2Go with free street access, to be added to the home zone.
And that MoCo should do the same for Silver Spring (I didn't suggest it for Bethesda but that would be obvious too), in my series of pieces on that city.
If you provide cars and promotion, in areas where you still have a functioning SMP, I think you can increase usage. But you need some density, the right urban form, etc., and North Arlington certainly qualifies.
And yes, I don't think I mentioned ever that Takoma Park should do the same thing, although TP residents get to be free riders, just like the people who live on the DC-Silver Spring border, and join and use the system. At least they generate those 10% sales tax charges...
In "long", you're right and thank you for suggesting it. I will try to get to it next week. I'll call ATP maybe and talk to whomever deals with car sharing.
(3. This is another illustration of that pesky problem of (1) not having "transport association" set ups in the US and in our region specifically, (2) dealing with stuff jurisdictionally primarily rather than at the metropolitan cross-border scale, and (3) not allowing for profit "partners" a real seat at the table. I'm planning on writing about this again today.)
4. How much was the scooter? When I was writing on the e-scooter thing in Santa Monica, I priced some and yes, it seemed to make way more sense, if you were going to be a regular user (say 2x/day) of buying one, since in 3 months you'd pay that much in the use fees.
... again, in the BTWD assessment post, in the list of added items, I included the e-bike, cargo bike incentives by Paris. It should include e-scooters, if you are really trying to push TDM in substantive ways.
I can't remember if I wrote that the e-scooter use on a per trip basis does make sense $-wise if you price it vs. a Metrorail ride, depending on distance and time, etc.
Had you been using the dockless e-scooters to start out with?
wrt "the off topic" thanks. Obviously that's something I've been meaning to write about.
Suzanne lived for a long time in Seattle and has many friends there + a cousin and her family who we adore, etc., many who are anti-Amazon (interestingly many of her friends work for Microsoft directly or indirectly...) because of the way that the tech businesses have "reproduced" space and demographics in the city. (Obviously it's the exact same issue in SF.)
Suzanne is practically Kshama on the topic when it comes to Amazon.
Me, it's more about municipal finance and the limited options cities have, plus the reasonable concept (although I think that Seattle is pushing local special taxation to the extreme) that certain kinds of focused taxes are used to address externalities/mitigate negative impacts.
Complicated by the fact that Washington State doesn't have income tax.
So I think the tax is a reasonable approach, in the theoretical sense.
The problem this poses as you well know, is that by being so jurisdictionally specific it can shift business to area localities that don't impose the same kinds of taxes.
Philadelphia having a wage tax and the other counties in the area--NJ and PA both--not, has shifted so much business hqs out of the city that it's silly. E.g., the non-Philadelphia side of City Line Ave. is lined with commercial office, while the Philly side lags considerably.
This goes to the Metropolitics concepts (MN). If you are going to race to the bottom in terms of business taxation, why not employ some taxation methods that provide needed financing to cities.
But it's like congestion charges. I got in an argument once with a professional who lives in the city but works for Arlington, who argued for it in DC. I said most of the congestion is out of the city, and furthermore MD and VA jurisdictions will use a congestion charge as a club, to recruit businesses located in DC for relocation.
If everyone's not doing it at the metropolitan scale, it becomes very difficult to not lose out.
Obviously, London and Stockholm and probably NYC can do it. Philly couldn't. Maybe DC shouldn't. Chicago would lose out big time to the suburbs, despite the move back towards the city on the part of some corporations, etc.
Philly:
https://technical.ly/philly/2014/12/12/philadelphia-city-wage-tax/
yeah, tried the rental scooters and realized that my commute each was about $3.50. $7 a day (they also are being hit with taxes?) , $35 a week, 140 a month.
I'd rather spend $300 on a scooter at that point and not be stressed about the time. Much like car2go, I did find myself cutting corners to save time.
I'd rather have a low priced electric bike+chainguard+fenders but they don't seem to exist.
Some nice ones in the UK:
https://voltbikes.co.uk
Given theft rates and lack of insurance, however, I don't want to do that spend.
I like the way the Riide bikes look but the $80/mo. price is way too high, well maybe in about 5-10 years I'd feel different as I am aging...
Those Volts are cool though. If we had the secure bike parking network, then it could work. And bike insurance theoretically could be available through WABA...
I am trying to get one jurisdiction (MoCo in Silver Spring, or Arlington, or a BID in DC, to try to pilot the "secure bike parking network" I've hypothesized in writing. I'm going to tweak it a bit, and try to get MoCo to consider adding a brief consideration to their Bike Master Plan which is in the process of being approved.)
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Maybe I'll try to book a test when I am over there?
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