By placing a tax or extra fee on rides provided by companies like Uber, Lyft and Juno, municipalities are finding an effective way to raise funding that can be invested back into the community.
Chicago has already instituted a 15-cent surcharge for Uber, Lyft and other ride-hailing services, which will be given to the Chicago Transit Authority to be used for the city’s train track, signal and electrical upgrades. The fee is anticipated to bring in $16M by the end of the year, the New York Times reports.
Philadelphia has chosen to allocate proceeds from its 1.4% tax on the ride-hailing services toward its public school system, while Massachusetts — which placed a 20-cent charge on ride-hailing trips — is putting the money toward improving its roads and bridges, in addition to giving back to the taxi community by helping them integrate new technologies and improving job training, the NYT reports.
New York is one of the latest cities to join this trend. Funds from the surcharge will go toward necessary subway system repairs. Ride-sharing users could be face additional fees of between $2 and $5 a ride, generating an estimated $605M per year.
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In the course of just a few years, the sharing economy has progressed from a few scrappy start-ups to an industry of mega-companies worth tens of billions of dollars. These platform-based businesses run on equal parts tech innovation and contract labor, with cities serving as the underlying foundation for success.
To put it simply, cities make the sharing economy work—they provide the dense, free agglomeration of customers, labor, and infrastructure these companies’ business models require. But it remains an open question whether cities and the sharing economy can be friends or enemies.
And when there were no more cab cartels to crush, Uber and Lyft decided to organize their own. The ride-share giants just announced a new regulatory cabal to lobby the government on autonomous vehicles and to smother new competitors in the cradle.
Along with more than a dozen other companies, the pair signed something called the “shared mobility principles for livable cities.” Most of the outlined principles are feel-good, tech gobbledygook. The 10th is terrifying: “autonomous vehicles in dense urban areas should be operated only in shared fleets.”
“Due to the transformational potential of autonomous vehicle technology, it is critical that all AVs are part of shared fleets, well-regulated, and zero emission,” they declared in a statement, adding that sharing the ride-share fleets would “maximize public safety” while also ensuring “that maintenance and software upgrades are managed by professionals.”
Everyone knew automation was coming. Eliminate the driver from the ride-share equation — costs dip and profits increase. Ubers without drivers have already been picking up passengers in downtown Pittsburgh for more than a year. But they just don’t want anyone else to have this technology.
Declines in public transit ridership are pushing transportation agencies around the country, including in the District, to pursue partnerships with tech companies to incorporate on-demand, dynamic shared rides into their services.
Proponents of “microtransit” say they could increase the reach of public transportation by extending travel options to underserved areas and into off-hour travel times when bus service is infrequent or nonexistent. Cities also are betting that subsidized microtransit could potentially lure back riders lost to popular app-based services, such as Uber and Lyft. They view it as a creative way to meet growing needs and balance costs.
“We can’t continue to spend huge sums of money on local bus service if it’s not being utilized as well as it should,” said Gabe Klein, a former transportation chief in the District and Chicago. “So how do you enhance local bus service to make it more useful to people in the age of on-demand modes? That is where microtransit comes in.”