Seattle’s proposed tax on ride-share trips (Uber, Lyft) would be the highest in the nation, representing another challenge to a business model facing attack across the country. In a Seattle Times op-ed, Tom Alberg and Bryan Mistele write,
Call it a head tax on wheels. The recently announced plan to triple the Seattle city taxes on all ride-share trips — to 75 cents from 24 cents, which would create the highest flat ride-share tax in the U.S. — is out of the same playbook that brought us the 2017-18 tax on jobs. It would hurt working people and others who use the Uber or Lyft ride option, reduce income for drivers by up to an estimated $1,800 a year and increase traffic congestion rather than alleviate it.
They point out that more than half the money raised by the tax would be spent on things other than transportation. MyNorthwest has more detail.
Over its first five years, the ridehsare tax is estimated to bring in $125 million. Out of that revenue:
- $52 million of that would be used to invest in 500 affordable housing units near transit for people earning between $15 and $25 an hour.
- $56 million would be used to cover the remaining cost of the Center City Connector streetcar project. After five years, this portion of the money from the rideshare tax would be shifted to pay for other transit, bicycle, pedestrian and safety projects.
- A little over $17 million would go toward worker protections for drivers, including the creation of a first-in-the-nation Driver Resolution Center run by a non-profit. The program would help companies and workers resolve disputes over things like the sudden deactivation of drivers through an arbitration and appeals process.
The mayor’s proposal also mandates Uber and Lyft drivers earn the city’s minimum wage, $16 dollars an hour, by July 2020 along with compensation for expenses such as gas and vehicle maintenance, and access to benefits such as paid sick leave traditional workers in Seattle get.
That last requirement echoes the new California law aimed at regulating Uber and Lyft.
Tech companies, drivers and regulators are scrambling to grapple with a new law in California that will require “gig economy” companies to offer their workers a full range of employee benefits.
There are a number of lingering questions about the controversial legislation, which California Gov. Gavin Newsom (D) signed into law last week — including what it will look like by the time it’s implemented.
Newsom has already vowed to seek changes that carve out a middle ground between the labor organizers behind the push and companies like Uber and Lyft, which are planning to funnel millions of dollars into a ballot measure intended to overturn the law…
But no matter where the state-level debate winds up, labor advocates and industry watchers say the law — dubbed Assembly Bill 5, or A.B. 5 — is a game-changer when it comes to regulating how gig economy companies are allowed to treat their workers. And if other states adopt California’s approach, companies like Uber, Lyft and DoorDash will find it harder to move forward with the same business model.
Alberg and Mistele are clear about their interests in innovation.
We have been among those promoting new technologies and tactics to help alleviate downtown traffic congestion, cut carbon pollution and reduce the need to drive your own vehicle downtown. The “ACES” coalition that we co-chair stands for “Autonomous, Connected, Electric and Shared Mobility.” Notice the word “shared” in there. It is one part of a strategy for better transportation. Why? Because ride sharing effectively reduces the number of vehicles in the urban area while only representing 4.7% of the total overall annual vehicle trips.
There are special interests who would be happy if ride sharing could be curtailed. But the only special interest of City Hall should be the welfare of average citizens. Ride shares alone won’t solve our transportation problems, of course, but they can contribute to overall improvements. So why handicap them?