WASHINGTON - A proposed tax increase on rides from companies such as Uber and Lyft is causing some friction between the mayor and the chairman of the city council. Now, Lyft is encouraging its customers to contact the council to fight the tax.
The tax on rides originating in the District would increase from 1 percent to 4.75 percent under Mayor Muriel Bowser's 2019 budget. However, under D.C. Council Chairman Phil Mendelson's proposed changes to the budget, the tax would increase to 6 percent. The final budget is one vote away from being approved, which is expected to happen next week.
Lyft sent an email to its customers opposing the tax increase. It said in part, "If approved, this tax will be one of the highest on Lyft in the country. It will make Lyft less affordable for the many District residents who count on us for reliable transportation - particularly those who live far from transit or need rides when transit doesn't operate.
"We've collaborated with DC City Council since arriving in the District in 2013, and we will continue to work with them to make transportation affordable and accessible for all. But they need to hear from passengers like you about this proposed tax. Take a moment to send them a message."
A rally opposing the tax increase was held on the steps of the Wilson Building Wednesday afternoon as rideshare drivers believe the tax could impact their business.
"If ridesharing fees are increased, it will reduce the demand for service and hurt drivers like myself who work to make ends meet," said one driver. "A large majority of D.C. Lyft drivers drive part-time to supplement their income and to pay for basic necessities like food and rent."
There is debate among city officials about the tax. Mayor Bowser sent a letter to D.C Council Chairman Phil Mendelson saying that she thinks that his proposed rideshare tax increase is too high and he should have kept the tax increase focused on hotels, which are paid more by visitors and tourists and would lessen the impact on D.C. residents who rely on ridesharing services.
"Your proposal uses the increased tax on ridesharing services to reduce the hotel sales tax increase to 15 cents and eliminate the restaurant increase, effectively subsidizing visitors to the District, tourists, and residents with disposable income," Bowser wrote. "Additionally, by raising the per ride tax for ridesharing companies to six percent across the board, the Council disincentives the use of pooled rides and unfairly disadvantages lower-income riders who rely on pooled service. We support the progressive proposal to incentivize pooled rides that was put forth by a number of community groups and a coalition of ridesharing companies and approved by the Committee on Finance and Revenue."
"I think the conversations are going to keep going for the next couple of days," said D.C. Councilmember Charles Allen (D-Ward 6). "We don't vote until next week. I certainly think the approach of having the lower tax rate on the pool drives makes a lot of sense. I think that a good way is to have kind of a tiered system to it. But we will see what happens and what shakes out in the next couple of days."