Could a tax on ride-hailing help fund transit in B.C.?

VancouverSun.com
Nov. 1, 2017
Jennifer Saltman

The idea of taxing ride-hailing services to pay for transit projects — a concept proposed by one U.S. city — has captured the interest of local experts and politicians.

Last month, B.C.’s government launched an independent review of ride-hailing services, which aren’t yet allowed in the province, in order to come up with a “made-in-B.C. approach” to ride-hailing. A report is due in early 2018.

Three days later, the City of Chicago announced that it’s aiming to become the first city in the U.S. to institute a fee on the ride-hailing industry to fund upgrades to train and bus lines.

The proposal, which is part of the city’s 2018 budget, involves a phased-in fee of 15 cents per ride in 2018 and five cents in 2019, on top of the 52 cents in taxes and fees that are already charged on each ride. The revenue will go directly to the Chicago Transit Authority.

“What the City of Chicago is doing is definitely worth exploring,” said New Westminster Mayor Jonathan Coté, who is co-chair of a joint committee on transportation planning and funding. “I think this is an interesting element to look at as a potential funding source.”

Metro Vancouver’s mayors have been lobbying for federal and provincial funding for a 10-year transportation plan for the region, and searched for a regional funding source to cover a $60-million-to-$80-million annual funding gap that doesn’t involve adding to the region’s property taxes. They have proposed that a portion of the revenue from proposed provincial carbon-tax increases over the next four years be directed back to the region to bridge that gap.

Currently, TransLink, the regional transit authority, can draw on fare revenue, property sales and operational savings to pay for projects.

“There’s definitely going to be in the next coming decade some changes in transportation, whether we’re talking about ride sharing or automated vehicles,” said Coté. “We’re going to have to start thinking differently about how we’re able to raise money for infrastructure.”

Coté said it would be ideal that if any tax was applied to ride-hailing services, should they be allowed in B.C., the revenue could stay in the region where it was generated.

University of B.C. urban design Prof. Patrick Condon said companies like Uber and Lyft take advantage of taxpayer efforts to support the road system and in many cases add volume to the roads rather than alleviate congestion.

He said that in some cities, including New York, ride-hailing services have reduced ridership on transit.

“I think it’s appropriate to assign a tax at some level to compensate for this public consequence,” said Condon.

When asked about whether a tax similar to Chicago’s could be implemented in B.C., Minister of Transportation and Infrastructure Claire Trevena said it will be interesting to see what ideas come forward during the ride-hailing review.

“We do see interesting ideas around the world how people do or don’t handle ride-sharing, so, yes, we want to look at all the different options,” she said.

In response to a request for comment from Uber Canada, a spokesperson emailed the following statement: “At Uber we believe that the future of urban transportation will be a mix of public transit and ride-sharing, and that by encouraging residents to use a variety of options, we can all ride together to build better cities.”