A new proposal from Washington, D.C. Mayor Muriel Bowser is set to raise a variety of taxes, including increased fees for transportation network companies (TNCs) like Uber and Lyft, in order to help prop up D.C.’s floundering metro system – the Washington Metropolitan Area Transportation Authority (WMATA). The proposal, which is part of the Mayor’s draft budget, would increase city fees on each trip from 1% to 4.75% – costs which will inevitably be passed on to consumers.
While it’s true that the city’s metro rail system has financial problems, an additional fee on TNCs is a misguided approach to fund and fix WMATA’s problems.
Part of the transit system’s struggles stem from efforts to improve system safety and catch up on neglected maintenance. But it is also because ridership, which has been in decline since 2012, is trending downward faster than ever (perhaps it’s all the fires?).
Source: Understanding Rail and Bus Ridership, WMATA, October 2017.
Critics argue that part of this decline is due to TNCs taking away riders. Those critics are correct – at least in part. According to a report from WMATA, many would-be riders opt for TNCs over the metro – particularly at night. However, TNCs are just one of many factors that have contributed to WMATA’s falling ridership numbers – telework, cheaper gas prices, a drop in reliability, and safety concerns also play a role.
Additionally, the advent of TNC carpool services such as Lyft Line and UberPool have made it cheaper (in some circumstances) to take a TNC than to jump on the Metro. Via, a newer entrant to the market, offers shared rides anywhere in D.C. for $2.95 (a ride on Metrorail is anywhere from $2 to $6). For many commuters, this is an attractive alternative to using the local bus or rail system.
A recent R Street paper – Beyond legal operation: The next ridesharing policy challenges – argues that cities should let TNCs compete with public transit, rather than trying to “even the playing field” through taxes or regulations. If TNCs provide a service that consumers prefer, despite hidden subsidies that drive artificially high demand for the alternative, those consumers should be free to choose that service without the paternalistic meddling of the city council.
Furthermore, the increasing popularity of ridesharing may not be totally at odds with public transportation. A recent study by the American Public Transportation Association found that people who use shared modes of transportation like TNCs are less likely to own a car and more likely to use public transit. If this dynamic is true in the D.C. metro area, imposing a fee on TNCs could do more harm than good to WMATA’s overall health. On the other hand, if more commuters were to use a combination of TNCs and transit, it could go a long way towards reducing the burden on public infrastructure (such as parking or peak strain on public transit).
To be clear, Mayor Bowser’s proposal unfairly punishes TNCs for offering a superior product, and will ultimately give us all worse options for getting where we need to go. If we have any hope of making services like the D.C. Metro more reliable, cleaner and safer (i.e. less likely to catch fire), we should allow TNCs and transit to compete.
Image credit: jorik