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D.C. Council would hike tax on Uber and Lyft more than Mayor Bowser proposed

In this Jan. 31, 2018, file photo, a Lyft logo is installed on a Lyft driver’s car next to an Uber sticker in Pittsburgh. (AP Photo/Gene J. Puskar, File)

The D.C. Council on Tuesday introduced a proposal that would tax ride-hail trips at a higher rate than Mayor Muriel E. Bowser (D) had sought and would require the companies to disclose extensive data about the scale of their operations in the District.

The proposal, which had first been floated in budget documents released this week,  would raise the “gross receipts tax” on Uber, Lyft and Via ride-hailing services from 1 to 6 percent, rather than the 4.75 percent Bowser had proposed. The mayor sought the tax increase as a way to help raise money for the District’s $178 million share of dedicated funding for the Metro rail system.

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The council says its tax on the companies would raise about $23 million for the transit agency, compared to about $18 million under Bowser’s plan. And they argued that their departure from Bowser’s recommendations is justified because research shows Uber and Lyft “contribute to traffic congestion, add wear and tear to the District’s roads, and there is evidence that they draw people away from public transit.”

Researchers in a range of studies arrived at figures showing anywhere between 15 and 30 percent of ride-hailing trips would have otherwise been taken by transit. Metro is studying the impact of Uber and Lyft’s operations on its declining ridership.

The reaction was swift from the ride-hailing firms and advocates who had bristled at the tax increase in Bowser’s initial request, and had pushed for a tiered system that would exempt pooled rides from the tax increase.  The council’s proposal would add about 60 cents to a $10 ride — if the services decide to pass the cost to customers.

“This disappointing proposal, devised behind closed doors without public input, stands in stark contrast to the good-faith example set by Mayor Bowser and Councilmember [Jack] Evans, who found a way to sustainably fund transit while helping reduce congestion,” Uber spokesman Colin Tooze said in a statement. “Punishing District residents who choose to share their rides and help take cars off the road is not the right approach.”

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Lyft officials said they were similarly dismayed with the plan, arguing  a steep tax would affect the affordability of its fares for passengers.

“For the City Council to attempt to raise taxes on all rides — across the board — to a staggering 6% is highly disappointing, and unfair to DC’s rideshare passengers,” Lyft spokeswoman Campbell Matthews said. “We are hopeful that lawmakers realize the importance of keeping transportation affordable and accessible for those who need these rides most.”

The measures are outlined in the fiscal 2019 budget to which the council gave an initial vote of approval Tuesday.

Bowser’s office criticized the budget tweaks in a statement late Tuesday, citing their likely impact on residents and commerce rather than tourists. Bowser had sought, for example, to raise some of the funds by raising the city’s restaurant sales tax from 10 to 10.25 percent, and increasing the hotel sales tax from 14.8 to 15.05 percent. The council recommendations, in contrast, increase the hotel sales tax more modestly to 14.95 percent and keep the restaurant sales tax at 10 percent.

“While we’re still in the process of reviewing the council’s proposal, our concern is that the new tax increases shift the burden away from visitors and onto District residents and businesses,” Bowser spokeswoman LaToya Foster said. “We will continue to work with the Council and other partners to ensure that the final budget works in the best interest of our residents.”

D.C. Council Chairman Phil Mendelson (D) said in a statement said that the mayor had sent a request for approximately $77 million in new taxes, and that the council had honored that commitment “although with some revisions to the incidence of the tax.”

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The council also proposed that ride-hail services operating in the District provide more data on where, when and how many trips the companies are conducting, a move that transit officials, city planners and open-data advocates have backed as vital to their congestion-relief and sustainability efforts.

Ride-hailing companies expressed skepticism about that proposal as well, arguing the requirements are aggressive and overly broad, and pose concerns about the privacy of their passenger data.

Under the proposal, companies would be required to submit troves of data to the District departments of Transportation and For-Hire Vehicles, including how many drivers they have, the total number of vehicle miles driven in the District and an extensive log of each trip.  The logs were a point of contention because they would include information such as the origin and destination, and pickup and drop-off times for each rides. Companies would also be required to specify how much idle time there was at pickup and drop-off points, the total fare of each trip, whether it was private or pooled, and how many passengers were in each vehicle.

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The information gathered would include trips that take place in the District, or begin or end within it. The proposal would also retroactively require data for 2018, which would be due in January.

“This would put D.C. right up beside New York in providing transparency about how the fastest-growing form of transportation in American cities is affecting those cities,” said Bruce Schaller, consultant and former deputy commissioner for traffic and planning in New York City, who led an acclaimed study on the growth of ride-hailing services there. “These companies are remaking the transportation landscape in big American cities and we need to understand what’s happening.”

Lyft expressed deep concerns about the potential impacts of those data requirements on customers.

“We share anonymized data with a number of regulators to help cities understand the transportation environment; however, we have serious concerns about the impact of the city council’s requests on user privacy and proprietary information,” Matthews said.

The council’s proposal goes on to specify that ride-hailing companies would be required to submit “Any additional information that the DFHV or DDOT deems necessary,” provided the government states the purpose of its use under D.C. law. Uber, Lyft and Via raised objections to those proposals in a letter to Mendelson, which was obtained by The Washington Post. The letter highlights the companies’ myriad concerns with how the Council’s data sharing agreement could leave users’ personal information at risk.

“It is critical that any data sharing agreement ensure the privacy and security of D.C. residents and visitors,” the companies wrote. “We are confident that these risks can be mitigated through careful collaboration with DDOT to identify that data which will best help the District plan for the future while also ensuring the protection of highly sensitive personal data from exposure.”