Local Politics: Ride-share tax could curb Lyft and Uber excesses

Rob Moore

Last month, ride-share application Lyft released its annual economic impact report. In this report, Lyft concluded that riders spent an additional $17 million in Columbus due to the availability of its services.

Meanwhile, controversy swirled last month around studies suggesting that ride-sharing apps were decreasing use of public transportation across the country, and that Lyft and Uber were increasing congestion on college campuses.

Typically, the conversation around the impact of Lyft and Uber has split into two camps, mirroring many other public policy debates. In one camp are the people lauding the benefits of the new technology, and in the other are those who focus on its negative consequences.

As most issues go, the truth is somewhere in the middle.

Of course this new technology is creating value, as anyone who has spent 30 minutes waiting for a cab after the bars close on a cold Saturday can attest. Ride sharing also creates a lot of possibility for first mile/last mile solutions, access to medical care and reducing usage of public parking.

On the other hand, ride sharing creates a lot of the same problems that personal cars do. Another car on the road means more congestion. It also means increased emissions, an increased chance of injuries and fatalities due to car crashes and greater wear and tear on public roads.

The congestion problem has particularly reared its ugly head in New York City, where average Manhattan car speeds have slowed to six miles per hour during business hours.

Things in Columbus aren't likely to get that bad. But more cars on the road still means longer commutes, more pollution, more crashes and faster infrastructure degradation.

Last year, NYC decided to cap the number of Uber and Lyft vehicles in the city to combat congestion. This is not a best practice of congestion alleviation: A survey of 40 prominent economists last year revealed that they overwhelmingly thought capping ride-sharing services would make residents worse off by arbitrarily restricting public use of ride sharing.

Instead, a more effective way to account for the costs of driving not borne by drivers and ride-hailers is via a congestion tax.

Last week, a new per-ride state fee for ride-share services in Manhattan went into effect. The policy is expected to reduce the number of cars on the road while raising revenue for improvements to public transit.

An even more efficient option would be for all cars to be taxed on a per-mile basis. This way, the negative impacts of personal cars are treated the same as the negative impacts of ride-sharing vehicles. Cars that are on the road more would pay more in proportion with the problems they create.

Unfortunately, local governments often have narrowly tailored authorization from the state to collect taxes, so a more limited ride-sharing tax might be easier to justify legally than a broader vehicle tax. On top of this, per-mile pricing presents some obvious logistical issues.

If Columbus wants to reap the benefits of ride-sharing while curbing its excesses, a tax is a better option than a cap.

Rob Moore is the principal for Scioto Analysis, a policy analysis firm based in Columbus.