Seattle

Eno Center Releases Policy Brief on TNC Taxes

July 26, 2018

Washington, DC—The Eno Center for Transportation released on Monday a new policy brief on the taxes and fees currently levied on transportation network companies (TNCs)—Uber, Lyft, and Via—at the state and local level. The brief, “Taxing New Mobility Services: What’s Right? What’s Next?”, concludes that while taxing TNC trips can help raise revenue that governments can use to invest in their transportation infrastructure, policymakers should be thoughtful about how their decisions affect transportation behavior.

“As these ride-hailing and ride-sharing services proliferate, they become attractive targets for local policymakers trying to deal with a range of challenges,” said Robert Puentes, President and CEO of Eno. “But as this brief makes clear, we want to make sure they balance the temptation to quickly raise revenue with the broader impacts these fees may have on the entire transportation network.”

The policy brief identifies and answers four main questions that cities and states are trying to answer when they levy taxes and fees on TNCs:

  1. Can TNC taxes and fees offset negative effects of urban congestion?
  2. Should TNC taxes and fees fund infrastructure and public transit investment?
  3. Can TNC taxes and fees provide parity with traditional taxi services?
  4. Should TNC taxes and fees create funding streams for regulatory costs and community needs?

It concludes that policymakers should first determine what their public policy goal is—whether it’s to reduce congestion, generate revenue for transit agencies, or otherwise—and use that decision to determine whether taxing TNCs is the best method to accomplish that goal.

Eno’s new brief includes a comprehensive listing of all taxes and fees currently levied on TNCs at the state and local level. This listing—the most up-to-date catalog of TNC taxes currently available—includes the dollar amount of the tax or fee, the date it was implemented, and how the revenue is being used. Right now, seven major cities and 10 states have some type of tax or fee on TNCs. Charges today range from 20 cents to almost 9 percent per trip.

The brief comes at a time when more and more state legislatures and city councils are considering whether to levy new fees on TNCs. Earlier this spring, the state of New York levied new surcharges on TNC and taxi trips in the busiest areas of Manhattan, while in Washington State, efforts to apply the taxi sales tax to TNCs failed.

Access the listing and read the brief here.

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