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Ride-hailing and ride-sharing apps like Uber and Lyft have been a great boon for commuters and late-night drunks, but they haven certainly come with their downsides. Taxi and private drivers worldwide have been very vocal in their opposition to these newcomers who they claim have taken away their rightful business. In addition, these apps have come under criticism for their employment practices, particularly when it comes to how drivers are classified and paid. Many drivers feel they should be called employees and compensated as such. Now, Uber, Lyft, and other ride-hailing apps are facing significant increases in taxes around the nation as states and cities try to increase their transit tax revenue. How will the ride-hailing giants respond?
Major markets like New York and Chicago have already slapped ride-hailing services with tax hikes as high as 67 cents for each ride. Efforts are also underway in Washington, D.C., Boston, Oakland, and the state of Georgia to increase taxes on these services. That’s because, according to these state and local governments, ride-hailing and ride-sharing services use public roads and increase traffic without contributing to public transit maintenance costs.
For their part, ride-hailing services like Uber and Lyft have argued that they are being unfairly targeted. These new taxes, it’s argued, would hurt consumers and reduce the use of these apps, further straining the public transportation system as would-be Uber riders would instead opt for the subway or metro taxi services.
Despite the back-and-forth from politicians and ride-hailing services, many economists and transportation experts argue that these taxes are standard and should have been there from the start. In the end, a few extra million dollars from taxing Uber and Lyft isn’t likely to solve any pressing budget concerns any time soon anyway. Should these services be allowed to keep having their cake and eating it too?