Seattle to Implement Tax on Uber, Lyft to Fund Transit and Affordable Housing

Earlier this week, Mayor Jenny Durkan proposed a 51-cent tax on Uber and Lyft rides, both to raise money for transit and housing and to help ease congestion in downtown Seattle.  This tax would an in addition to the current 24-cent tax.  The mayor’s office estimates this additional tax would bring in about $25 million annually over the next 5 years. 

The thought of the additional tax would help pay for the new streetcar project that is currently in the works, and not surprisingly enough, over budget.  The funds will also be used for new affordable housing units.  An estimated 500 new units would be built near major transit lines for low to moderate income residents earning $15 to $25 per hour.

 In addition to the tax, the Mayor is fighting for Uber and Lyft drivers, ensuring they will make the $16 per hour minimum wage by this time next year.  She also proposes funding for expenses such as vehicle maintenance and gas, an even making the companies provide paid sick leave.  Taking a note from New York, the Mayor is looking to that cities’ rule that was implemented in 2018. 

Estimated numbers come from the estimated rides that both Lyft and Uber had last year.  They provided about 24 million rides, about half of which started or ended in downtown Seattle.   Of course, Uber and Lyft are pushing back against the additional tax.  They believe it would raise costs for riders and lower the wage for drivers.  Drive Forward, a local group of 2000 drivers who chose to unionize after Seattle passed the law, also believes this tax will hurt the riders.  Many riders depend on this affordable transportation and forcing the tax on riders will cause them to choose other options. 

However, the tax on the per ride to be implemented would be less than in some cities or even matching.  New York City, for example, currently has a tax of $2.75 per ride.  Chicago currently has a 72-cent tax on rideshares. 

The new legislation still has to be approved by the city council.  No word yet on whether this will be approved.  This proposal is expected to be discussed with the City Council next week as part of their budget review.