“The shift to [ride hailing] has reduced income in traditional parking-related sources, but still puts pressure on the City’s aging transit infrastructure,” the department wrote in a fiscal analysis last year.
In Maryland, Uber and Lyft pay a 25-cent tax on each ride originating in Annapolis, Brunswick, Frederick, Montgomery County, Prince George’s County and Ocean City, because of the laws in those municipalities.
Uber, which charged Baltimore riders 25 cents extra for nearly a year in anticipation of having to pay a similar tax, instead began crediting them with Uber Cash in recent weeks for a “city-specific fee” that was “ultimately not collected by the city.”
“You were charged a cityspecific fee for a trip or trips you took in Baltimore, MD between October 2018 and August 2019,” the company said in emails to riders. “Because these fees ultimately were not collected by the city, we’ve credited you the amount charged . . . in Uber Cash to use on future rides or Uber Eats.”
Lyft did not collect such a fee from its riders in Baltimore because there was no law for a per-ride fee, a Lyft spokeswoman said.
Despite pressure from City Council member Ryan Dorsey, the administration of then-Mayor Catherine E. Pugh (D) did not introduce a bill that would have allowed the city to begin taxing Uber and Lyft ride until January 2019. It then languished without a hearing for the past year in the council’s Taxation, Finance and Economic Development Committee.
The bill was approved Thursday by the Taxation, Finance and Economic Development Committee.
The bill will be heard by the full council Monday and is expected to pass. Mayor Bernard C. “Jack” Young (D) plans to sign it “as soon as it crosses his desk,” according to spokesman Lester Davis.
The year-long delay before the bill received a hearing was a result of Pugh’s resignation amid a scandal over her self-published children’s book series and the political upheaval that ensued, city officials said.
Young, who then was council president, took over as ex officio mayor upon Pugh’s leave of absence in April, elevating council member Sharon Green Middleton, the council’s vice president and the finance committee chair, to acting council president. When Pugh resigned in May and Young was sworn in as permanent mayor, council member Brandon Scott was elected by his colleagues to the council presidency.
A finance committee hearing on the bill, initially set for October, was rescheduled to allow Scott to be briefed by the finance department, Middleton said.
“The main holdup was just the briefing,” Middleton said. “I don’t see any other problems with it.”
Young and Scott, who is also a Democrat, are running for mayor this year.
Dorsey, a Democrat who represents Northeast Baltimore, said he learned in March 2018 that the companies were paying no tax to the city after he inquired whether the revenue could be dedicated to bicycle infrastructure.
Dorsey said he wanted to make the issue public, but decided instead to handle it “as amicably as I could,” quietly asking Pugh’s finance department to move forward with whatever needed to be done to collect the fee. He said the city finance and law departments met for months to “suss out what needed to be changed in the [city’s taxi] law and exactly why.”
“A lot of people at that time were saying that I needed to be more easygoing, not throw bombs,” Dorsey said. “I should’ve publicly created awareness. It would’ve gotten done a lot faster.”
Taxing ride hailing in Baltimore has been the better part of a decade in the making. When Uber and Lyft launched in the city in 2013, officials passed a 25-cent “taxi tax,” the only one of its kind in the state at the time, for any trip originating or ending in the city, but the law initially did not include ride hailing.
The state passed a law, sponsored by Sen. Bill Ferguson (D-Baltimore City) — who now is the Senate president — enabling such taxes to also include ride-hailing companies beginning in January 2015. Baltimore was exempted from a 25-cent cap on the tax, “and is therefore authorized to set its own rate,” according to the Finance Department.
Ferguson amended the state law the following year, limiting its scope in three ways and taking the city’s law out of compliance:
Taxes could only be levied per trip, not also per the number of passengers in a vehicle.
Rides could only be taxed by the jurisdiction where they originated, and not also by where they ended.
The state comptroller’s office — not the city Finance Department — would collect ride-hailing taxes and remit the money to the city, but any taxes on taxis still would be collected by the city.
“The Senate President believes that the City should be collecting taxes from ride-sharing companies Uber & Lyft, and is disappointed to hear that they’re not being collected,” said Jake Weissmann, a spokesman for Ferguson, in a statement.
Lyft gave multiple political contributions to both Ferguson and Pugh during the process, according to campaign finance records. The company gave a combined $2,000 to Pugh’s campaign committee in a pair of donations in April and October 2016. It gave $1,000 to Ferguson in October 2015, and another combined $1,000 to his campaign committee in 2017 and 2018.
Lyft’s other political contributions in Maryland include a $5,000 donation to the inaugural committee of Gov. Larry Hogan (R) and Lt. Gov. Boyd K. Rutherford (R) in January 2019. Uber also donated $10,000 to the governor’s inaugural committee that month.
“Lyft — like many companies and industries — supports a variety of causes, organizations, and individuals that share our goal of providing affordable and reliable transportation,” Lyft spokeswoman Campbell Matthews said in a statement.
While Uber and Lyft do not release data on the number of rides in each market, Baltimore’s Finance Department estimated they provide about 14.6 rides per capita a year, based on data for similarly sized King County, Wash., which includes Seattle. Those nearly 9 million rides per year would net about $2.1 million in annual ride-hailing tax revenue, given a 25-cent-per-ride tax.
Baltimore’s Finance Department also recommended doubling the tax rate to 50 cents to generate $4.2 million per year.