Seattle Uber, Lyft tax would help pay for downtown streetcar

A 51-cent tax on each Uber and Lyft ride in Seattle would help pay for the completion of the downtown streetcar and for more affordable housing, according to a proposal from Mayor Jenny Durkan.

Durkan made the proposal after lengthy closed-door discussions, and it accompanies another proposal to set up a minimum wage for app-hail drivers. That latter proposal will require more study, however, per the Seattle Times’ Heidi Groover.

The tax, though—that just needs City Council approval (but that’s far from certain). Durkan’s office estimates that it could generate about $25 million annually over five years. That would go a long way toward plugging a $56 million budget hole for the streetcar and toward more affordable housing. The money would also be spent on an appeals system for Uber and Lyft drivers who find themselves suddenly deactivated from the apps.

The negative response to Durkan’s proposals from the ride-share giants themselves was swift. Uber and Lyft said the tax would drive up costs for riders and also damage the take-home pay of drivers, per Groover.

Interestingly, the proposed Seattle tax is a lot less than similar taxes in New York City (that’s $2.75 a ride) and Chicago (72 cents), though it’s well out ahead of smaller cities such as Boston, which operates under a Massachusetts-wide levy of 20 cents per ride. And it would come on top of a 24-cent surcharge Seattle already charges for certain drivers and to cover wheelchair accessibility.

Uber and Lyft provided some 24 million rides in Seattle last year, half starting or terminating downtown. The number is expected to grow by a few million this year.