So, Uber decides to use Washington, D.C., as a test bed for its vision for urban mobility. CEO Dara Khosrowshahi visited Washington Wednesday to publicize company plans to expand its ride-hailing app so customers can access and pay for bike share, car rentals from private car owners, and eventually mass transit.
And what does Washington do? Mayor Muriel E. Bowser has proposed increasing the gross receipt tax on ride-hailing companies from 1% to 4.75%. The tax revenue would pay for about 10% of Washington’s $178.5 million share of increased funding for Washington Metro. (Virginia and Maryland and providing the balance — without taxing Uber.)
Interesting economic development strategy Bowser has there: Tax businesses in the growing innovation economy to subsidize enterprises in the stagnant, money-losing old economy.
Uber’s idea is potentially so transformative that slapping $18 million added tax on the ride-hailing industry may not prove debilitating. (Not for Uber anyway. I’m less sanguine about its weaker competitors.) But one thing we can say for sure: The tax will not accelerate Washington’s evolution toward the transportation future.
“What we want to make sure is that you’re not taxing one form of shared transportation for another form of shared transportation,” Khowrowshahi said in a public meeting with Bowser, reports the Washington Post. “We’re in this to promote shared transportation in general. We want to make sure that proposals like this are not unconstructive to that goal.”
City officials, notes the Post, say the ride-hailing services have benefited from Metro’s problems so it’s only fair that they be part of the solution.
Bacon’s bottom line: Hey, Uber, come look at Virginia — we won’t tax you!
Your one-stop-transportation-shopping app sounds like a fantastic idea. I can hardly wait until you develop AI that allows people to map multimodal trips integrating everything from walking and biking to gypsy vans and buses to hour-long car rentals. I’m eagerly waiting for a full range of transportation services at varying levels of convenience, comfort and price. If you put a few money-losing public mass-transit enterprises out of business, I won’t have a problem with that. I’d love to put an end to the drain on taxpayers. Likewise, if you force public enterprises to adapt by cutting costs and becoming more responsive to customers, I’m totally cool with that, too!
I regard Bowser’s logic — Uber is part of Metro’s problem, therefore you should be taxed to help fix it — as wildly illogical. You should be allowed to compete on a level playing field with all other transportation business models. I hope you understand, however, that does include paying your fair share of the cost of maintaining and building the road and highway infrastructure that you rely upon. Who knows, you might end up paying more in taxes that way. But at least you wouldn’t be subsidizing the competition.
One more thing, Virginia has localities that would love to cooperate with you. Take Virginia Beach. The resort city has plans for development of its waterfront that include a drop-off zone for ride-hailing services. How cool is that? If cities can provide drop-off zones for buses — typically referred to as bus stops — why not drop-off zones for ride-hailing services? That’s something that municipalities can do at next-to-no cost.
Here in Virginia, we want to accelerate the development of a 21st century model for transportation, not tax it. Use us as a test bed. Please!