Don’t Enact a ‘Lazy’ Ride-Hailing Tax
Sam Adams is the former Mayor of Portland, Oregon, and was the founding director of the World Resources Institute’s U.S. program. He is currently the Director of Strategy for CleanTech Methods, Inc.
Jul 25, 2018
A former mayor of Portland, Oregon, outlines what a smart ride-hailing tax looks like for American cities.
There’s a transportation revolution now underway that will likely disrupt our cities as much as—or even more than—the widespread proliferation of personal cars that began in the 1920s. Back then, cities weren’t ready for the rise of automobiles; they were unable to act or waited too long to establish the kind of regulations and policies that could have mitigated the negative effects that car ownership unleashed on urban spaces. We can’t afford to do that for this new round of transportation disruption.
Ride-hailing services like Uber, Lyft, and Via are already changing the way we get around cities, and not always for the better. When autonomous vehicles arrive and driverless ride-hailing takes over, this new service—if left unchecked—could accelerate urban inequity, deepen the affordability crisis in central cities, and speed suburban sprawl.
But local government leaders can shape this urban transportation revolution: Cities need to tax ride-hailing trips and get it right the first time, because transportation taxes, once in place, are fiendishly hard to change. I know this from experience: I’m a former mayor of Portland, Oregon. That’s the state that birthed the nation’s first and much-emulated bad gas tax, which was unindexed-for-inflation.
So far, only a few cities and states have enacted taxes on transportation network companies (or TNCs) such as Uber and Lyft. Uber first released its app in 2010, yet it took eight years for the nation’s first two-tiered ride-hailing tax to be enacted, by the New York State Legislature, for Manhattan. Last month, the U.S. Conference of Mayors voted to encourage Mayors to look at taxing ride-hailing trips, but the cities still have to design, approve and implement such a tax. Voters in Oakland and San Francisco are likely to have ballot initiatives on adding fees to TNCs to weigh in on in November, while New Jersey has just passed a statewide bill that imposes a 50-cents-per-ride fee on ride-hailing companies. We need to pick up the pace—but carefully, because a lazy ride-hailing tax isn’t worth it.
A tax is “lazy” if it basically just collects and spends revenue, when it could do much more good for cities. Cities need a tiered ride-hailing tax—one that rewards carpool riders, for example, and also includes policy safeguards for equity provision of service, congestion-like pricing, and a market-based approach.