Eno Center for Transportation urges caution in taxing transportation network companies

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A policy brief released by the Eno Center for Transportation last week addressed the issue of taxing transportation network companies (TNCs) like Lyft or Uber.

The center warned that, while revenue raised can help governments, they need to be wary of adversely impacting transportation behavior.

“As these ride-hailing and ride-sharing services proliferate, they become attractive targets for local policymakers trying to deal with a range of challenges,” Robert Puentes, president and CEO of Eno, said. “But as this brief makes clear, we want to make sure they balance the temptation to quickly raise revenue with the broader impacts these fees may have on the entire transportation network.”

Eno determined that policymakers need first to decide what they want to achieve, be it reducing congestion or generating revenue, before launching such taxes. The method should follow the end goal, in other words, and taxing might not always be the best way of achieving the stated purpose. In the policy brief, Eno laid out a list of all taxes and fees currently facing TNCs in various state and localities, detailing the dollar amount, date implemented, and use of acquired revenue.

In all, seven major cities and 10 states currently levy taxes or fees on TNCs, with costs ranging from 20 cents per trip to a flat 9 percent of trip costs. The policy brief addressed four central questions that cities and states are trying to answer through TNC taxes and fees. These include whether TNC taxes and fees offset the adverse effects of urban congestion, if TNC taxes and fees fund infrastructure and public transit investment, if TNC taxes and fees could provide parity with traditional taxi services, and if TNC taxes and fees should create funding streams for regulation costs and community needs.