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D.C. Boosts Taxes on Uber, Lyft by 500 Percent to Pay for Busted Metro System

The District is trying desperately to shore up funding for its increasingly unpopular rail system.

KEVIN DIETSCH/UPI/NewscomKEVIN DIETSCH/UPI/NewscomWashington, D.C., just passed a steep tax hike on ridesharing services to pay for its increasingly unpopular, frequently on-fire Metro system.

On Tuesday the D.C. City Council boosted the city's tax on trips performed by services like Uber, Lyft, and Via from the current 1 percent tax to a full 6 percent, adding 50 cents to a $10 ride.

D.C. Mayor Muriel Bowser had proposed a more modest 4.75 percent tax on ridesharing trips back in March. City Councilman Jack Evans—who also chairs Metro's board (which operates independently of the city government)—sold his colleagues on a higher tax by promising that riders wouldn't even notice it.

"No one will notice that. No passengers will know because they have no idea what they are going to pay anyway," said Evans in April. (Evans had previously described the prospect of taxing Uber as "very exciting.")

The money raised from the tax will go towards fixing up the city's ailing Metro system, which has seen ridership crater in the wake of deteriorating service levels and a series of safety scandals.

Weekday ridership on the Metro rail system averaged 598,000 for Fiscal Year 2018. That's below the 612,000 weekday trips it was averaging in May 2017, which is lower still than the 639,000 trips it averaged in May 2016, just before Metro began a series of repairs that saw stations shut downs for months at a time. Currently the system services the same number of people it did in 2000, back when the D.C. metro-area had about 1.5 million fewer residents.

Despite the repairs, maintenance issues continue to plague the system. Track fires continue unabated, as do months-long station shutdowns. Metro has had its fair share of recent scandals too.

In April it was revealed that 1,700 concrete panels installed on the system's under-construction Silver Line were defective. In May, a report from Metro's inspector general found that inspectors at its Rhode Island Avenue station had copied text verbatim from previous years' structural integrity inspections into their reports and failed to inspect hard-to-reach portions of the station. (The Rhode Island stop is being closed for over a month for repairs this summer.)

Frustrated with this state of affairs, former Metro riders have increasingly opted for ride sharing services like Uber and Lyft. Tuesday's tax hike—which was part of the city's 2019 budget—is an attempt to recapture some of the dollars fleeing along with these riders.

Ride-sharing companies had lobbied for a lower tax that excluded trips taken on their carpooling services. Tuesday's vote has left them a bit miffed.

"While we're disappointed that City Council voted to increase taxes across the board without providing measures to incentivize the use of shared rides, Lyft remains focused on providing the best transportation experience possible," said a Lyft spokesperson in a statement.

In essence D.C. has opted to tax the transportation services people actually use in an attempt to shore up one that people don't. Given that Metro has done such a poor job improving its service with past infusions of cash, it's unlikely that this will be what sends riders back into the system. Instead they will simply shell out more for Ubers that will get them to their destinations on-time and unscathed.

Photo Credit: KEVIN DIETSCH/UPI/Newscom

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  • Scarecrow Repair & Chippering||

    Damn government knows how to fuck things up. Government: what can't it ruin?

  • MatthewSlyfield||

    Nothing. It's kind of hard to ruin nothing. :)

  • Scarecrow Repair & Chippering||

    Ah, the old Nothing is better than .....

    I voted for Pat Paulsen for President, I think, although it may have been Alfred E.. Neumann. Whichever one had the slogan "Nobody's better than ___; vote for ___!"

    I think. I also voted for Jello Biafra for SF Mayor, when I lived there.

  • Earth Skeptic||

    Silly people keep making the wrong choices, and we need more of their money to pay for stuff they don't want.

  • Longtobefree||

    (Evans had previously described the prospect of taxing Uber as "very exciting.")

    Did he get continuing positive consent for that excitement?

    How about shutting down the metro and using the funding to subsidize ride sharing costs?

  • C. S. P. Schofield||

    Probably a more workable policy, but the Metro is Congress's Toy Train Set. It exists because Congress is convinced that a First Rate City like London, Paris, or Moscow MUST have a subway.

    And never mind that of those three, only London is a first rate city, and it looks like it won't be for long.

  • Ron||

    And never mind that congress never rides the metro but still people must pay for our signaling

  • Butler T. Reynolds||

    I really should have chosen to live in a smaller city.

  • BestUsedCarSales||

    Or a drivable city. Move to Tucson. Good people.

  • C. S. P. Schofield||

    The problem with DC isn't size. Subtract out the Feds and it's a medium-small Southern city. The problem is that Congress demands that it support the amenities of a major city. Amd forget 'home rule'; regardless of what may have been said, Congress (both parties, drat them) meddles constantly.

    Marian Barry was screwed from the get-go. Oh, he might have been just as awful a Mayor in, say, Cleveland, but we'll never know. He never had a chance to do anything EXCEPT malfease. All substantive decisions (and many trivial ones) were going to be second-guessed by 535 buttinskis.

    Sharon Pratt Kelly (who succeeded Barry during the hiatus) tried to close a lot of redundant city offices and so on. She was thwarted at almost every turn and lasted one term.

    I wouldn't accept the job of DC Mayor if it came with a seven figure salary and 47 virgins.

  • Enjoy Every Sandwich||

    It's true that many Uber/Lyft riders won't notice the tax. But those that do notice won't respond by getting back on to the shitty Metro system.

  • John||

    Most poor people do not use Uber since they usually want a cab during peak times and can't afford the premium. This tax is basically a hipster tax. It is the black community of Washington sticking it to the white gentrifiers. The last thing I want to see is higher taxes, especially to support what amounts to a jobs program known as the metro. That said, I do find a perverse pleasure in DC government saying "pay up beardo". I bet a large percentage of the people affected by this tax think taxes should be higher and there should be more public transit. That doesn't make the tax a good idea or worthy of support. It does, however, show that sometimes justice is served.

  • Oli||

    So what you're saying is, the tax is a terrible idea, but it's a great idea?

  • John||

    It is a terrible idea that at least serves a measure of justice on those who it harms. I would still repeal it if I could. But since I can't, I will at least enjoy justice being served.

  • tlapp||

    What justice? A well run business providing a service to DC residents deserves some special tax as justice?
    Only a year ago Metro was found to have corruption, nepotism, mismanagement, failure to follow maintenance requirements. Justice would be to fire those responsible. Not tax the innocent to pay for their wrongs.

  • JunkScienceIsJunk||

    Most poor people do not use Uber since they usually want a cab during peak times and can't afford the premium.

    I don't understand what you mean. You're referring to surge pricing? In general, Uber has been a godsend for the poor.

  • John||

    People claim that but I see no evidence of it. And yes, I mean surge pricing. The thing about regulated taxis is that you pay the same no matter what the time. So, if you take them at off hours, you are effectively subsidizing people who take them during peak hours. Poor people take cabs because they have to and generally cannot manage their schedules to avoid peak times they way others can. So, they end up paying full price for peak hours rather than the lower subsidized rates they would get with a cab.

    Uber has been a boon for hipsters and urban middle class who are able to use them at off peak times. It has never been a boon for the poor.

  • JunkScienceIsJunk||

    Interesting. I live in a major city and sometimes Lyft instead of walk (if it's raining, for example). I did this Monday morning in fact, at about 8am. I paid $2.71 to go 3.26 miles (not including $3 tip, but the poor don't have to tip that much).

    What's more, I take advantage of Lyft's new pre-tax program, where you can have Lyft money taken out of your paycheck and it's nontaxable. So realistically, I paid only about 70% of $2.71. The trip took 21 min because someone else got dropped off first. But at the end of the day, if you're poor you can wake up a few minutes early.

  • John Thacker||

    Unless you're black. Uber and Lyft are godsends for black and poor people, because taxis won't pick them up. All the regulation and price caps in the world doesn't help you if people won't pick you up. In fact, it makes it worse, as your argument shows.

    The number of cabs, unlike Uber and Lyft, doesn't increase much during peak hours (cabs are rented by the week by drivers in most locations), and when the supply is high and prices capped, they just prefer to serve the nicer areas (and the whiter people.)

    "Black riders were 73 percent more likely than white riders to have a taxi trip cancelled and waited 6-15 minutes longer than white riders, all else equal. By contrast, ridehail services nearly eliminate the racial-ethnic differences in service quality"

    - from the recent UCLA study

  • John Thacker||

    It is the black community of Washington sticking it to the white gentrifiers.

    "Black riders were 73 percent more likely than white riders to have a taxi trip cancelled and waited 6-15 minutes longer than white riders, all else equal. By contrast, ridehail services nearly eliminate the racial-ethnic differences in service quality"

    "Black people don't take rideshare, they love taxis" is pretty ignorant. Taxis are horrible for black people.

  • thmooseishngry||

    I think this is the point of these kinds of taxes. Politicians know that we are willing to put up with a certain amount of tax to keep enjoying the superior service. Bonus is that when they finally reach the line of diminishing returns they get to say that they helped end smoking or some such.

  • $park¥ The Misanthrope||

    "While we're disappointed that City Council voted to increase taxes across the board without providing measures to incentivize the use of shared rides, Lyft remains focused on providing the best transportation experience possible,"

    1. Pretty sure fucking up the Metro is filling that role.

    2. Fuck you and your begging for handouts.

  • Muzzled Woodchipper||

    ^^THIS^^

  • Rhywun||

    they will simply shell out more for Ubers

    I can't imagine how bad service would have to get for me to spend ten times as much on my commute.

  • John||

    I don't know anyone who takes Uber to work. I have never met such a person. Have you?

  • Rhywun||

    No. Which means if they're losing rides to Uber, it's for discretionary trips. But my (limited) knowledge of DC's subway makes me think that it's more geared for suburban commuters than for city dwellers so not sure how big an impact losing discretionary trips might be.

  • John||

    The DC subway is totally geared for suburban riders. But the Metro is in many ways a jobs program for the black community in Washington. Like I say above, this is the black community sticking it to the gentrifiers.

  • Rat on a train||

    What? Three employees standing on a platform talking sports isn't productive? Oh. They have clipboards and are recording arrival and departure times. Keep up the important work.

  • C. S. P. Schofield||

    The DC Metro is geared towards looking good from a distance. Up close, it is a fine way for tourists to get around the city (except for the Georgetown area, for some reason), and little else. It only makes financial sense for a commuter by the slimmest of margins, if (s)he rides every workday and will never need to go somewhere after work that differs from where (s)he parked. Miss ONE DAY and you no longer save any money. Some companies have deals that help with this, but not many. And the Metro does bupkis for people commuting around the rim of the city.

    The Metro is Congress's Toy Train Set. Furthermore, they never gave it enough funding to do proper maintenance and now they've stretched it to add a new line (silver) they've bust it.

    I liked it when I lived in or near DC, but I wasn't commuting on it.

  • Rhywun||

    except for the Georgetown area, for some reason

    The snobs there didn't want it. Similar happened in Buffalo to shoot down a route to possibly the biggest job center in the burbs: the University.

  • Rat on a train||

    Some companies have deals that help with this, but not many.
    The feds give government employees $260/month.

  • Priscilla King||

    Around the turn of the century, when obligatory adjectives for Metro shifted from "sleek" and "futuristic" to "ailing" and "aging," the funding was there. Metro was still fairly shiny, people still loved it, some of us were still proud to live in a car-free city. But instead of maintenance on existing trains and tracks, WMATA (naming no names like "Graham") opted to spend extra money on flashier signs and shinier seat covers.

  • C. S. P. Schofield||

    By that time, the maintenance problems were bad enough that the funds wouldn't fix anything major.

  • JunkScienceIsJunk||

    I take Uber/Lyft to work when I don't walk. But that's because I don't live in DC. There are plenty of cities that have subways that don't go to where they need to go. In DC people can vote with their feet. So it also makes sense that the government can make this a win for themselves. Either increased revenue or diverted money to the Metro.

  • stuartl||

    "I can't imagine how bad service would have to get for me to spend ten times as much on my commute."

    It isn't just the bad service, it is the safety aspect as well. Metro is regularly being busted for falsifying safety inspections. It also has recently had some collisions, near collisions, derailments, ... See the Wikipedia article Incidents_on_the_Washington_Metro

  • C. S. P. Schofield||

    The system was already in trouble the day it opened. There wasn't money in the budget to keep things running right. There was barely enough to keep,them running at all. The idea had been that ridership would climb to levels high enough to support the system. Never happened (somehow, it never does with these Light Rail boondoggles).

  • My Dog Bites Better Than Yours||

    Weekday ridership on the Metro rail system averaged 598,000 for Fiscal Year 2018.

    That's still a lot of people. How about the customers chip in an extra 50 cents per ride?

    598,000 * $0.50 * 5 = $1.495 Million per week

    Granted, the howls of "Repairing the system on the backs of the riders" and "Taxing the poor" will cut into that some.

    What can't fix it with a million bucks per week, on top of what you're getting to do it right in the first place?

  • My Dog Bites Better Than Yours||

    What can't be fixed with a million bucks per week, on top of what you're getting to do it right in the first place?

  • the other Jim||

    As an everyday Metro rider, I can attest that whatever extra revenue this tax raises won't materially change the system, because the system is run by incompetent people. When you have safety inspectors who falsify safety reports, and then can't be fired even though this results in derailments, more money won't help.

    (And for the record, I don't think DC should be screwing over ride-sharing companies in the first place.)

  • C. S. P. Schofield||

    Get a Republican/populist adminisstration running the city for at least two decades, and keep,Congress out of it, and a lot,could bexed.

    And for my NEXT trick, I will make monkeys fly out of my @ss.

  • John C. Randolph||

    1,700 concrete panels installed on the system's under-construction Silver Line were defective.

    Oh, no problem. I'm sure that the highly competent bureaucrats who wrote the contract under which these panels were procured included language that makes the supplier fully responsible for any costs incurred in remedying the defects.

    Thank you, i'll be here all week. Remember to tip your waitresses and bartenders.

    -jcr

  • thmooseishngry||

    Just used an Uber. Knew what I was going to pay before I paid it. No "Ummm...this road is closed so... I'm going to drive three more hours." Has this guy never used an Uber? Has he ever experienced supply and demand? Why can't we also just say that taxing things specifically is wrong. Cigarettes, lotto, beer, Uber (apparently). All just products and services. It is wrong to tax them based on need or 'morality'.

  • RPGuy16||

    "The money raised from the tax will go towards fixing up the city's ailing Metro system, which has seen ridership crater in the wake of deteriorating service levels and a series of safety scandals."

    Translation: The money will go to the public sector unions who donated to the Dem politicians.

  • Curly4||

    Well that part of the tax money that gets that far will wind up in the union's pockets but that will be a small part of the total tax receipts.

  • RPGuy16||

    "Tuesday's tax hike—which was part of the city's 2019 budget—is an attempt to recapture some of the dollars fleeing along with these riders."

    No one wants our service so we're going to force people to pay for it. Ladies and gentlemen, your government at work!

  • macsnafu||

    Taxing the competition so that the poor are forced to use a deteriorating and increasingly unsafe government metro system. Your government is working hard to shaf--, er "help" the poor.

  • Curly4||

    Well if the City wants to improve the system then they should pass a 6% general tax on everybody. You know treat everybody even when it comes to taxes.

  • Priscilla King||

    Around the time I left Washington I remember thinking that it had been the right size for a long time and was heading for self-destruction through increasing population density. This article supports my decision to get out of the city. I've not been back even to visit friends since 2010--would rather remember the city I loved as it was. (Typical useless nostalgic kibitzer eh?)

    Seriously, my suggestion for fixing Metro (and integrating rent-a-cars, rent-a-bikes, and ride sharing into the system, and keeping it real for those who can barely pay their rent already) is to "Downsize D.C." Only so many people can live in a city. D.C. traffic is among the world's worst and is sufficient motivation for anybody to ride Metro, unless they happen to be afraid of fire, being trapped in flooded tunnels, Stachybotrys mold (reactions to which include panic attacks), or being trampled to death in a tightly packed crowd where everyone is too eager to get out of the pack to notice someone lying on the ground...

    Leaving the city may be the most helpful thing anyone can do for it...for traffic, Metro, rent, or any other of its problems.

  • JunkScienceIsJunk||

    Well yeah, supply and demand. But the demand is high. People like DC and want to live there. As long as people like it there, rent is going to be high and congestion is going to be an issue. Tradeoffs, you know?

  • Longtobefree||

    If you remove all the federal government workers, who have no choice but live there, who is left that actually wants to live there? DC residents are there for the money/power, and nothing else. A transit system for tourists would not b so hard to do, but workers? No way.

  • Curly4||

    But if the people leave the city they cannot live off the hind tit of the government and get wealthy at least wealthy for most of the rest of the country.

  • JunkScienceIsJunk||

    I have no idea what this means.

  • Longtobefree||

    It is a Reason comment; why do you want it to make sense?

  • Curly4||

    I say it would be good if Uber, Lyft, and Via would provide on their receipts a line listing city taxes that they are paying. There is no other way to force the cities that screw up as badly as DC has to correct the problem than for the public that is paying the bill learns how much they are paying. I, however have never taken one of these services so I don't know if they do show the taxes already.

  • JunkScienceIsJunk||

    I say it would be good if Uber, Lyft, and Via would provide on their receipts a line listing city taxes that they are paying.

    They do.

  • Ama-Gi Anarchist||

    I've been driving for Lyft almost a month now and I'm worried about what the recent SCOTUS "Internet Sales Tax" ruling means, since I think (for once) Grover Norquist might be right that its a smoke screen to open the door for States to impose Income Tax on out-of-state workers. The really insolvent states, like California, will likely use this as an excuse to fuck anyone who works for a California corporation. I will, point blank, NOT pay any fucko from Cali for the privilege of being a Lyft contractor. I would hope my Sheriff here in Tampa would say "Not in my county" to any such Cali law enforcement/revenue goons.

  • Longtobefree||

    Wander through the web asking about the 'commuter taxes' where states, cities and 'special tax authorities' charge income taxes on people who live in one city but work in another. Hint, use 'democrat control' or 'northeast' as a filter.

    Your Sheriff has nothing to do with it. Where do you bank? Lyft does not work on a cash basis, so you have to leave an electronic trail. If the supremes say you pay taxes to California, your bank will send them the money. Period.

    Welcome to the revolution.

  • Pat001||

    About this time last year, the Washington, DC Metro system launched a yearlong "Safe Track" maintenance surge that was supposed to fix everything. Sure enough, after a year of massive inconvenience, single tracking and closed stations, DC Metro riders are stuck with the same shitty system - plagued with breakdowns, delays and accidents.

    I just wish other cities infatuated with rail projects would look, listen and learn.

  • Longtobefree||

    Cities are not infatuated with rail projects. They are fascinated with being able to control the peasants; they use rail as an excuse to take their money so they cannot afford cars, then tell then when and where they can go.

  • PavePusher||

    Councilman Evans is a Fascist fucktard who needs to be thrown in front of a city bus. At least THAT bus would provide a public service.....

  • John Thacker||

    They raised the tax by imposing exactly the same sales tax rate on rideshare services as other goods in the city pay. It's not a special tax. It's not really a problem. Sales taxes should tax services and goods at the same rate, and be low. Previously rideshare services (like many other services) were getting the benefit of being taxed less compared to other things.

  • tlapp||

    The efficient well run businesses' reward is higher taxes to pay for the inept, corrupt, mismanaged government business.

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