Seattle Mayor Jenny Durkan’s policy advisers prepared a draft proposal for a new tax on Uber and Lyft months ago, including how the money might be spent, public records show. Durkan hasn’t yet decided whether to move ahead and is keeping the draft under wraps for the moment.
A tax on so-called transportation-network companies (TNCs) could help address congestion and pollution while raising millions of dollars per year. Depending on the details, Uber, Lyft, some drivers and some passengers could object.
TNCs are growing. Their drivers made about 24.3 million trips that started in Seattle in 2018, up from about 20.9 million in 2017, according to the city.
“Like many states and cities around our country, we are exploring a fee or tax to manage the impact of ride-sharing companies on our downtown,” among other options to keep people moving, Durkan spokesman Mark Prentice said.
“We continue to evaluate potential policies that can address the impact of ride-share companies on our downtown and engage with community for their feedback,” he said. “No decisions — including on specific policy design — have been made.”
The Seattle Department of Transportation (SDOT) was working on the issue as early as last August, making a case for a tax in a draft proposal obtained by The Seattle Times through a public-records request.
“Multiple studies across the United States suggest ride-hailing, particularly TNCs, compete with public transit, walking and biking and add mileage to roads … Increased trips and miles traveled further contribute to Seattle’s transportation sector carbon emissions,” the Aug. 8 document said.
“SDOT and the city of Seattle seek to utilize price signals to help manage the impacts of ride-hailing services, fund a variety of projects to support a robust, competitive and equitable transportation network and meet the city’s climate goals,” the document added.
The Durkan administration redacted details about what a Seattle tax might look like from the draft proposal and from subsequent documents, citing a standard exemption in the Washington State Public Records Act for policies still under consideration. But unredacted portions show how staffers were framing the issue.
“The impacts of ride-hailing are exacerbated in the Center City area during the AM and PM peak traffic periods,” the draft proposal said, noting TNC trips starting or ending in that area accounted for more than half of all TNC trips in Seattle in late 2017.
A memo from policy advisers to Durkan dated Oct. 8, ahead of a briefing with the mayor, included a map of the City Center area.
“The proposed tax components detailed below are based upon similar tax proposals in New York City, Washington, D.C., San Francisco, Chicago and the Seattle-Tacoma International Airport,” which charges TNC companies $6 per ride, the memo said.
The Durkan administration redacted those components from the document provided to The Times. But a table attached to the memo described the taxes adopted by the other jurisdictions. Chicago has charged 72 cents per TNC ride to help fund transit, while Philadelphia has charged 1.4 percent per ride to help fund public schools.
Seattle at the moment only charges fees of 14 cents per trip to cover the cost of TNC licensing and 10 cents per trip to support taxi wheelchair accessibility.
Though the city also mostly redacted a section of the memo titled, “Draft Proposal for a Spending Plan,” sentences not redacted indicate Durkan advisers may have contemplated using the tax to help fund affordable housing.
“The housing affordability crisis has reached historic levels … amid rising rents, stagnant wages and an inadequate supply of housing,” the section began. “The average TNC user in the Seattle area tends to be more affluent than the average resident, more likely to have a college degree and 60 percent are under 35 years old.”
Politics of a tax
Sandeep Kaushik, a political strategist who helped run Durkan’s 2017 campaign, is also a lobbyist for Lyft. The administration has said his clients get no special treatment. Tim Ceis, a high-powered Seattle lobbyist who does work at City Hall for Uber, emailed the administration in September asking about the mayor’s plans.
The TNCs would prefer to see Seattle adopt downtown tolls for all vehicles, rather than tax their trips only. Last year, a spokesman said Uber would spend money here to lobby for that sort of congestion pricing.
Matt Wald, executive director of Drive Forward Seattle, an advocacy group partly created and funded by Uber, said TNC companies would respond to a tax by raising prices, Wald said.
“When prices go up, trips go down and drivers only make money when they have a passenger in the back seat,” he said.
Uber doesn’t want to be blamed for congestion. Traffic volumes in Seattle decreased in 2017, even as TNC ridership has grown, the company has noted, though a 2017 study of seven cities, including Seattle, found people are less likely to use transit after using Uber and Lyft.
“We would be concerned about any proposal that hurts low-income riders and decreases trips for drivers,” Uber spokesman Nathan Hambley said. “Uber supports a collaborative approach to reducing congestion through broad-based road pricing, investing in transit and bike infrastructure and providing benefits to drivers.”
Lyft spokeswoman Lauren Alexander echoed that sentiment.
“Comprehensive congestion pricing is a powerful and effective way to reduce congestion in many of our busiest cities,” Alexander said. “It’s critical that all vehicles are accounted for, including commercial and personal vehicles … Looking at just one type of vehicle, like TNCs, will never truly address congestion.”
No American city has widespread congestion pricing, which would require voter approval in Seattle. But Durkan last April announced her administration would develop and adopt some system by end of her first term, in 2021.
Most respondents to a recent Seattle Times poll said they were opposed to “a toll to go into downtown Seattle as a way to reduce congestion and raise money for transit.” A TNC tax wouldn’t require voter approval.
A Sept. 28 memo between Durkan staffers identified “messaging” lessons related from other cities, warning about administration’s tone toward working-class TNC drivers who might worry about their pocketbooks and consider a tax elitist.
The memo listed potential Seattle stakeholders, including the labor movement, nightlife businesses, environmental organizations and consumers.
The labor movement “will want to make sure that drivers who are largely immigrant, refugee and people of color, are not disparately impacted by a policy,” the memo said.
Bars and restaurants “will want to ensure that there is not a fee so large that it will deter their customers from using TNCs,” while consumers “will not want a large tax or fee imposed on them that exacerbates an already high cost of living in the city,” the memo added.