> Uber and Lyft “are using public roads, and the profit is going to their companies,” Phil Washington, Metro’s chief executive, said at a recent meeting.
Public roads are supposed to be paid for through fuel taxes, which every Uber and Lyft driver pays. California has gasoline taxes of:
* 55.22c per gallon (second only to Pennsylvania)
* 18.4c per gallon (federal)
* 2.25% sales tax
Additionally, taxing only ridesharing companies may increase incidences of drunk driving. Is another, poorly conceived, tax really a solution?
Fuel tax revenue and other direct user fees like annual registration in California amount to less than 25% of what the state and its cities pay to maintain the roads and streets. Roads are massively subsidized from general revenues. If you are proposing a $5/gallon fuel tax then I completely agree. That would be about equivalent to what other rich countries tax motor fuel and consistent with the state's greenhouse gas emission goals.
That's misleading -- yes, in the aggregate, gas taxes cover only part of the expenses, but that's not because of personal cars. Damage on the roads -- and thus maintenance costs -- scales with the 4th power of weight per axle. So the damage is virtually all from large trucks, with sedans and SUVs as a rounding error.
If you were to apportion out the maintenance cost due to personal cars, they are overpaying.
From that:
"The load equivalency factor increases approximately as a function of the ratio of any given axle load to
the standard 18 kip single axle load raised to the fourth power."
I am bad at math... could you help me understand. A 80,000 truck and 5,000 car drive down the road... how much more damage does the 80,000 truck do? Thank you.
If the 80k truck has 5 axles (as is typical of an 18 wheeler) and a 5k car has two, then the truck has 16k on each axle and the car has 2.5k on each axle.
Because the damage scales with the 4th power, then the damage ratio is the 4th power of the axle weight ratio:
(16k/2.5k) ^ 4 = 1677x as much damage.
Edit: Sorry, that oversimplifies it a bit. For the same vehicle, the damage scales that way, but for a fair comparison, you'd have to account for the fact that the weight is distributed over more and bigger tires on each axle. Still, that should show you how the math works.
So the damage is virtually all from large trucks, with sedans and SUVs as a rounding error.
Which is why the California tax on gasoline is 48.7¢/gallon and the California tax on diesel fuel is 67¢/gallon.[1]
Federal tax on gasoline is 18.4¢/gallon, and diesel fuel is 24.4¢/gallon.[2]
I'm not defending the trucking industry. I think more stuff should go by train instead. But truck fuel is taxed more heavily than car fuel. (For those of you in other countries, the number of cars running on diesel in the United States is about 3%.)
They also require more gas per mile. It seems like it should roughly add up to paying a few more times than cars (they're a few times less fuel efficient).
Yes, the average car in the US gets about 25MPG, while the average tractor trailer is 6MPG, so about 4x the fuel per mile. Accounting for the higher tax rate, they’re paying maybe 5x the tax per mile, while causing maybe 5,000x the damage.
Butter and milk that don't have to travel as far by road would be cheaper. So much of our national Walmartification is possible because of roads are subsidized.
No, it would not be cheaper. It is not cheaper today and making food today is profitable (and possible) only thanks to economy of scale. Automation on this level is not here yet.
> don't have to travel as far by road
It doesn't have to. It can (and it does because it's better).
We’re paying for it either way. I’d rather the payment be apportioned by the extent to which you use products that have to be transported that way; it gets the incentives right.
Is this some kind of joke? If the taxes already cover 25% of the expenses then adding 1000x on top means you would tax 249 times more than you need. To make it fair you first have to give truck fuel an adequate tax (so it covers 100%) and then divide this tax by 1000 for light vehicles.
If you think it's a joke you're taking the words far too literally.
"like 1000 times more" is not a full proposal. Yes you would reduce car taxes appropriately. Yes you would figure out the actual amount to balance the budget.
My point is that “it will hurt the poor” is a very old and very tired response to proposals that externalities should be accounted for in the cost of goods.
Part of getting better at helping the poor is helping them directly rather than using extremely inefficient and indirect subsidies on various industries to do so.
If we are talking about maintenance costs, sure trucks should pay their share, but congestion (the reason to build additional roads) is caused
primarily by passenger cars.
Congestion doesn't drive maintenance costs. It may drive infrastructure needs but that is an entirely different problem, and one which taxing conpanies such as Uber and Lyft actually help to lower.
Road gets you everywhere, rail only gets you to the nearest terminal. Depending on the signalling system used rail can have a higher capacity from terminal to terminal, leaving the 'last mile' (which in reality is more likely to be the last 100 miles) to be travelled by road. Road needs more maintenance and the work itself is more labour-intensive.
Imagine a package-switching network comprising an (electrified) rail backbone with roads spreading from terminal nodes to the destination points, fully automated package store-and-forward, electric self-driving trucks.
This would cost loads of money and loads of jobs. It might also solve parts of the problem. Maybe Amazon's successor is already thinking of something like this?
Exactly this. Of course, if they tax per axle and tonnage combination, it’ll just be passed on to consumers anyhow as most of trucks are distributing goods which directly or indirectly end up in the hands of consumers. However, it would be quite fair to do, I think.
In the short term it would get passed on to consumers. In the medium term supply chains would figure out how to reduce shipping by road. In the longer term (in conjunction with other changes) we might be able to get larger-scale urban development on a more sustainable track.
If we could properly price externalities (not just road wear but also ground water contamination, CO2 emissions etc.) there are many parts of our economy which could be made dramatically more efficient and less harmful without that much overall change to human quality of life.
For example: Exxon mobil profits in 2017 were 19.7 billion. Fukushima cleanup costs exceed 180 billion.
There is no way to do what you are proposing without massive price increases in electricity, gasoline and virtually every other good. I wouldn't be surprised if when you priced all of this in you discovered that people couldn't really afford electricity anymore.
Also this economy would never be able to have exports because the price of producing goods would just be insane.
The truth is we can't afford the externalities without an economic implosion that would realistically end with an extreme political group taking control in the ensuing chaos and undoing everything you are proposing.
Mitigating climate change is essentially going to cost all of the direct profit ever made by all the companies in the fossil fuel discovery, extraction, refining, and retailing businesses.
Think 85 trillion USD, real value. That's about 1/3rd of the total current wealth of the entire world, by my back of the envelope calculations.
The thing about externalities is: somebody pays, it's just not the person who caused them. Redirecting that cost back to the source would be a good thing. There would then be incentives to do the most efficient thing instead of the most wasteful thing. This would actually make everybody richer.
How much of our wealth is being wasted this way? I'm guessing that it's a lot.
Sure, but it might also have some other nice side-benefits, like favouring railroad expansion. Having transport by lorry being artificially cheaper is non-ideal for lots of reasons.
Actually, of trucks were taxed on a ton/axle basis instead of ton+axle basis, the net road wear would be dramatically reduced. Think 6-axle, tripple-tire trailers.
That's not really the view from a city budget. Cities don't have that many truck routes and their costs are dominated by maintaining streets where virtually all the traffic is light vehicles. For the state it is a bigger problem because almost all state route are truck routes.
Are you sure about that? I see garbage trucks, delivery trucks (package, furniture, appliance etc.), lawn service trucks, salt trucks, snow plowing trucks etc day-in, day-out.[1] And to do their job, they probably need traverse 95% of the paved roadways on a regular basis. Granted, you don't typically see 18-wheelers tooling around most neighborhoods[2] but there is quite a bit of truck traffic through even moderately populated urban and suburban areas every day.
[1] If your argument is that these are all 'light' vehicles, my city disagrees with you. They recently cited road damage from the variety of garbage hauling services as a reason to limit our options. Not that I entirely buy that as the only or even main reason they did so... local politics and all that.
[2] However they have been known to use secondary streets when they shouldn't.
We're talking about California. There are no major cities in California in possession of snow plows and salt trucks. A garbage truck goes down the street once per week, yes. The overwhelming majority of traffic on most city streets is cars and light trucks. The main cause of damage to most city streets is the mere passage of time, and rain.
Not at all. I was making the point that there are lots of trucks on most roads all the time, not that they aren't necessary.
Also, while salt makes the road drive-able in the winter, it actually does long term damage to the road (increases the number of freeze/thaw cycles.) Similar with plows: they increase the rate at which the road surface deteriorates. While they both are necessary to keep roads operable for vehicles in the winter, they are the opposite of maintenance longer term as far as the road surface is concerned.
Even then, the same phenomenon means that the dominant source of damage to those streets is the delivery vehicles; smaller cars still cause a disproportionately small fraction of the damage and are overpaying via taxes. Ubers are not externalizing here.
How does this account for all the upkeep on the residential roads where a large truck almost never travels. Sure, large trucks may account for the vast majority of wear on roads where they travel, but I imagine the majority of the roads in a city rarely see large trucks, and still need regular upkeep.
Without some sources to back up your claims, I'm not sure if it's accounting for that or not. Can you supply your sources so we can look into exactly what that statistic means?
Without much better data the best you can say is that Ubers are benefitting from externalities at a rate lower than other, heavier vehicles. It's still likely they aren't paying their fair share.
A road that's never driven on suffers damage from the elements, and the passage of time.
A truck does more damage then a car? Great. But there's an upfront road maintenance (not to mention construction) cost that you have to pay, regardless of who uses the road. Gas taxes do not come close to capturing that.
There are counter examples like the federal and some state (e.g. California) tax breaks for trucks over 6,000 pounds, providing relief to all of those orthodontists who needed a Hummer to get to the office.
Damage isn't the only thing involved in people using the roads. Roads are a public good (in contrast to railroad tracks which are a private good).
The state effectively charges for the use of roads both to pay for maintenance and to make sure that the road remain usable to a reasonable cross-section of people. This is just as landlords charge for the use of land even when that land isn't consumed.
Here in northern Sweden we have a lot of wear on the roads. After a few years you can clearly see where most drive because there is a deep depression after the wheels. If you drive a truck in the track you will notice that you don't fit, the distance is slightly smaller than the trucks wheel distance. It does however fit exactly for the cars.
We do however all have spikes on the cars in winter, I'm guessting this helps a lot. The trucks usually does not have spikes. There is a lot of trucks too, hauling wood out of the forests.
Worth noting that the damage to the air, increase in noise pollution, and increased costs of health care spending from injuries, lung disease, etc. from both is substantial.
The more technical term for this is "fatigue damage". I read years ago that the fatigue damage inflicted by a truck loaded to the legal weight limit (and it's often exceeded) is 9,000 times that of a car.
The damage done by cars is usually from snow tires.
Fuel tax revenue and other direct user fees like annual registration in California amount to less than 25% of what the state and its cities pay to maintain the roads and streets. Roads are massively subsidized from general revenues.
Which is why I always laugh when I hear people complaining about evil subsidized high-speed rail in America. That's just talking points from the airline and trucking industries, which are already far more heavily subsidized than rail.
The problem with the US and high-speed rail isn't on-going subsidization per se, it's the comically enormous cost to initially build it out. Major infrastructure is wildly expensive to build in much of the US. To do national high-speed rail, you'd have to figure that out. The only solution I've ever seen that might work, would be a belligerent Federal Government that just brutalizes anyone that gets in the way, threatening uncooperative states via funding, aggressively using eminent domain to take land, bulldozing through environment reviews, etc. You'd have to use the full power of the Federal Government to rapidly get through obstacles and it would piss off everyone in the process.
There's only one major state where you can build cost-effective high-speed rail in the US - Texas. They're going to do what California couldn't and at ~1/4th the cost per km of rail. 20-30 years from now Texas will probably have high-speed rail between all of its major cities.
If the usage fees aren't sufficient, then that's true for all drivers, whether it's Uber, or an eighteen wheeler, or a personal driver. If you get those usage fees right, then the argument that "specific group X profits from using public roads" goes away.
Those roads are what allow stuff to be delivered. How do you ship an air conditioning unit on a bike path? The point is that the roads serve commerce and a tax on roads is really a tax on everything. Roads aren’t exactly massively subsidized — the commerce they generate results in taxes. Tax revenue generated per mile driven is far greater than any supposed subsidy. We could make an argument that schools are massively subsidized — the parents of students attending don’t pay the actual cost of attendance however, the tax revenues generated by an educated workforce are considered a net win compared to the cost of the “subsidy.” My kids don’t go to public school and some people don’t drive on roads, but we all benefit from roads and other people’s kids being educated and the economic gain vastly outweighs the subsidy. Not everyone uses the roads, but everyone benefits from them — thus a direct user-fee really serves no purpose, it’s just an additional tax on everyone. Since practically every single product touches a road at some point, taxing the roads more just makes everything more expensive.
You are also incorrect suggesting that $5 per gallon is “about equivalent to what other rich countries tax motor fuel.” In France, it’s $2.77 per gallon. In the UK, it’s $2.83 per gallon. Netherlands is $3.5 per gallon. Sweden is $3.51. In Australia, it’s $1.12 per gallon, New Zealand is $1.58. None of those countries are even close to $5 per gallon.
Taxing vehicle use reduces vehicle use. That's quite important if you want to do something about global warming. Gasoline in Berlin costs $5.75 but I can still order stuff from Amazon.
As for transporting air conditioning units, trailers and cargo bikes are a thing. You can move a refrigerator by bike
"You are also incorrect suggesting that $5 per gallon is “about equivalent to what other rich countries tax motor fuel.” In France, it’s $2.77 per gallon. In the UK, it’s $2.83 per gallon. Netherlands is $3.5 per gallon. Sweden is $3.51. In Australia, it’s $1.12 per gallon, New Zealand is $1.58. None of those countries are even close to $5 per gallon."
This is incorrect, in the UK at least.
The best price I get is about £1.21 per liter.
Which is $1.61 per liter
Or $7.31 per Gallon.
So we are well over $5 a gallon. Don't forget the USA is pretty much the only country to measure liquid volume in gallons, we all use liters - 1L = 4.54609 Gallons
You can always rent a van for the couple hours you need it [1]
I still regret having bought an expensive percussion drill to install a bathroom vanity, when I could have just rented one from the local hardware store chain. [2]
Am Dutch, just looked out the window at what is considered a gas station with cheap prices (not next to a highway) and gas is €1.559/l, diesel is €1.319/l.
This comes to $6.72 per US gallon for gas. More than half of this price is VAT and duty. On top of this we pay road taxes based on the weight and fuel type of your vehicle, about €50/month for a small (1000kg) gas powered car.
So because you drive longer, which of course produce more Co2, you should have a lower price? l/100km or mpg is not really the most important, what count is l or g per year. Last time gas prices where high sales of SUVs and trucks in US did go down, as soon as the gas price did go down sales of cars with terrible mpg ratio did go up
$5 per gallon is roughly in line with the tax in Europe.
Compare the UK and the USA, conveniently adjacent in the table. Both have refineries, so the untaxed price should be similar, but the UK taxed price is $4 higher.
Keep in mind there is also 20-25% VAT on those European prices. Which is on the total cost including the cost of the fuel and any duties.
It definitely adds up to around £1 a litre in the UK of tax (59p duty plus 30p VAT) depending on exact wholesale prices. This works out at around $5 per (US) gallon.
This seems to be a recurring problem. We have all these subsidies and taxes that penalize or prioritize certain kinds of actions instead of charging everything at its true cost. This means the government is forcing a certain kind of solution to the problem rather than charging the problem makers the cost of their problem.
A better solution would be to charge all drivers the exact cost to run their cars including all road maintenance for the roads they use and the cost to the health system and environment that their cars create.
Then provide multiple options such as rail and bike lanes. People will naturally gravitate to the best solution.
I often see complaints about how this will raise the cost of products like food because they need a lot of road and fuel resources. But the thing is you already pay for this cost through other means. By charging the true cost the price of an apple may go up but the price in your tax goes down. And this way the seller of the apple is now incentivized to source the apple locally and reduce the transport costs because its no longer paid for by everyone.
This is very hard to implement; How do you amortize startup costs (building the roads, buying new paving trucks) vs maintenance costs (raw cement, human, cost @ year 1, cost @ year 10, cost to replace the system after X years).
Do you penalize users/tax payers who have a lower use
and less scaled systems? (e.g. should it cost more to mail my grandmother a letter because her post office is less at scale than mine?)
Do you increase the costs if some of your users leave (and risk even more attrition)?
This has been investigated in depth with schools and local businesses. Gov gives them a sweetheart deal with the hope that they contribute back and as the deal get's less good (and Gov starts ramping taxes to deal with paying infrastructure costs) businesses leave. For me the natural conclusion is the government has to provide some balancing (rain day funds, progressive taxes, ...)
Many Uber/Lyft/taxis cars are fuel sipping Toyota Priuses. Fuel taxes break down as fuel economies reach a certain point. Yes, it is not just Uber drivers using Priuses, but it is a substantial problem that has increased road usage without the same corresponding increases in fuel tax revenues.
Of course electric presents even bigger problems that many states now have a surcharge on them during registration. It is obvious that fuel taxes are going to be outdated in 10 years or so as EVs become more popular. Real-time tolling has been suggested as an alternative to this problem in Europe, but that probably wouldn't fly in the states.
As others have mentioned, taxing efficient cars doesn't seem to make much sense. Maybe tax actual miles traveled instead? That would solve the problem of increasing efficiency and also decrease the value of loitering and cruising in-between pick-ups.
I'm real curious as to how taxing miles travelled would work, especially if you travel between states. Would you have to keep track of how many miles you drove in State A and State B, and how would you pay State B if you lived in State A? Since we'd need to replace the federal fuel tax as well, would the federal government require states to hold yearly odometer inspections, or would you have to fill out a form on your yearly taxes stating how far you drove? I supposed that these questions could be solved by utilizing GPS, but I'm not sure I like the idea of the government tracking the movements of my vehicle.
In Norway the use of GPS has been discussed for a few years, and as far I understand the newest solutions being discussed have been approved by the data privacy watchdog, which generally tends to be very negative to government surveillance.
There are many options there, at the cost of making audits/complaints harder, such as e.g. only keeping GPS traces for a very short time (or not at all), and gradually overwrite more and more details, such as coordinates, reducing time precision, and finally consolidate to amounts owed. Those settings could be left under the control of the car owner as well, or let you dump a signed record of the precise data if you as the owner suspect inaccuracies and want to collect evidence, and then allow you to wipe the details from the device and only leave aggregate numbers.
The point is if the device is tamper-proof enough, you don't need it to record your movements, you just need it to monitor your movements and location with sufficient precision to decide what amounts should be added to running totals of tax.
Of course there is a risk some governments will decide they'd really like more detailed records.
There are experiments with this sort of system in my state in the US. In our case, the car owner signs up with a private firm that does the data collection and only reports the total distance driven to the government, not the actual locations.
I would assume that there is some law which requires the detailed data to be deleted, but I'm not sure about that.
I'm real curious as to how taxing miles travelled would work, especially if you travel between states.
Trucks have been doing it for years with transponders in the cabs. That's how when a semi fills up with fuel in one state and ends its trip in another state the state in between still gets some fuel tax to pay for road maintenance.
It would make sense to use a differentiated sales tax for car for hire services. That'd be proportional with usage. It would also tax people who don't have a car and externalize car taxes and maintainance costs by using these services. EU countries already do ths for things like food, books, accomodation and restaurant services. Usually the sales tax is smaller for these sectors.
If you want usage fees to be proportionate, I think you'd need to tax according to the maintenance costs caused by the vehicle per mile (eighteen wheelers cause vastly more road wear than cars). That's really all you need, except perhaps for some fixed cost per mile for the size of the vehicle, to tax congestion.
Yes, I mentioned that is already beginning to happen.
> But given CA's environmental goals, this would be counterproductive.
That is irrelevant, we are reaching a point where taxation on road miles driven vs. fueled used becomes unavoidable. What will wind up happening is that efficient and clean energy vehicles will still need to be taxed to account for usage, while less efficient vehicles will be taxed even more (to discourage use).
Why should less efficient vehicles be taxed more? If they are already paying more for fuel, doesn’t that already “tax” them more? It seems like such a tax is regressive — rich people can buy new efficient cars more easily than poor people.
> Why should less efficient vehicles be taxed more?
Internalizing the environmental externalities of operating them.
> If they are already paying more for fuel, doesn’t that already “tax” them more?
Fuel taxes are a mechanism for the additional (that is, beyond road usage, in the context of the grandparent post) taxes on inefficient vehicles.
> It seems like such a tax is regressive — rich people can buy new efficient cars more easily than poor people.
That's actually a reason you might want a method other than exclusively fuel taxes to implement the additional taxation (which may be via, say, a means tested tax subsidy for purchase of more efficient cars, rather than directly another extra tax on inefficient ones), because fuel taxes are operations taxes but don't directly effect purchases (they may be taken into account, but the poor who feel they need a car will often buy what they can afford up front even if it is not fully rational because real people tend to fall short of rationality in some predictable ways, and discounting deferred costs is a big one.)
> Why should less efficient vehicles be taxed more?
Taxation serves two purposes: (a) to fund roads, and (b) to discourage society damaging behavior. For (a), we need to tax all vehicles, for (b), we need to tax some vehicles more than others.
> It seems like such a tax is regressive — rich people can buy new efficient cars more easily than poor people.
True. Perhaps the efficiency tax can be built into the initial new car purchase while the use tax is ongoing (those old cars will eventually fall apart or fail an emissions test anyways and be taken off the road). Anyways, these things can be worked out.
Many countries (Norway would be an example) have special taxes on cars that takes into account a variety of metrics around pollution, weight and engine capacity, as well as price. Overall car taxes in Norway are among the highest in the world, to the extent that it massively skews which car models people buy.
Here's the Norwegian tax authorities form for calculating taxes. While not all the descriptive text is available in English it seems most of the form is:
The problem is that Uber/Lyft drivers "cruise" when the demand is slack rather than park.
So, for certain areas and times (generally about a hour before when that area is about to go from slack to busy), your street becomes a never-ending stream of ridesharing cars--generally doing stupid traffic maneuvers when they finally get summoned.
> The problem is that Uber/Lyft drivers "cruise" when the demand is slack rather than park
Isn't the whole point that the apps limit cruising time? I recall a study that claimdd the average traditional taxi cruises for half an hour on average between each trip. Are there plans to tax traditional cabs by an amount commensurate with their cruising time? If not, this legislation seems more like protectionism for traditional cabs.
> Are there plans to tax traditional cabs by an amount commensurate with their cruising time?
Traditional taxis already pay a steep annual franchise fee to the city (even after it was cut down on recent years, probably in part because less-taxed rideshares reduced the level of franchise fee that was supportable).
Franchise fees also benefits the taxi companies. It constrains the supply to taxis, thus shielding the taxi companies from potential competition. They're paying for protection from competition.
> Franchise fees also benefits the taxi companies.
In the presence of a substitute service not subject to them, they do not.
Actually, since there seems to be both a non-automatic approval process and a franchise fee, they don't really even without such competition; the approval process shields them from competition, the franchise fee is a pure cost. (Of course, there is a linkage between the two, but as long as the process is in place, incumbent taxi firms benefit from minimizing the fee.)
> Public roads are supposed to be paid for through fuel taxes,
No, they aren't, at least in California; fuel excise taxes (and diesel, but not gasoline, sales tax) are a part of road funding, but other sources, including general revenue (largely, sales taxes and personal and corporate income tax), are used.
EDIT: Not that taxing ride-sharing is likely to reduce congestion. It plausibly could increase it, if it induces residents of mostly walkable communities (which, sure, LA has fewer of than it should) who might otherwise rely on ride-sharing for occasional car needs to instead keep a personal vehicle, which then tends to encourage additional, less-necessary driving.
NYC streets are worse because of 250,000+ (obviously, not all at the same time) Uber/Lyft/Via/etc. vehicles being on the streets. I don’t care if there is demand, they have made congestion worse, period. I think all municipalities should treat all “private”, “shared”, whatever you want to call them, car services just like taxis, and require them to be painted a special color. You know not to travel too closely behind a taxi because they could stop or swerve at any moment. Unless you look at the very fine print on the license plate (and this is only in cities that require these cars to register), you do you know it is a car for hire, and to not follow too closely, unless you want to be blocked while they pick up a fare. How is it that these upstarts can “disrupt” an entire industry, and have a significantly lower barrier to entry than the incumbent? I say, require them all to be painted pink!
Fuel is still extremely cheap in the US compared to more modern countries. It does not cover proper infrastructure, as can be witnessed in the US anywhere.
> Uber and Lyft “are using public roads, and the profit is going to their companies,”
Using this logic, they should be taxing all companies that use public roads (food delivery, package delivery, service companies), instead they are specifically cherry picking Uber and Lyft to target. These sort of anti-business policies are causing companies and people in masses to flee California and New York. Perhaps that is the goal.
If you believe that Uber and Lyft are decreasing the number of cars on the road, then taxing them to "free up congested roads" is misguided, as it will have exactly the opposite effect.
Talk to anyone with a reasonable public transit system about how ridesharing is clearing up the roads (spoiler alert: it's not, they're decreasing public transit ridership and contributing to a constantly worsening congestion issue).
Perhaps public transit systems could look into what ride-sharing is doing, what elements of it are so appealing to users, and if there’s any similar actions they could offer to make public transit more appealing.
It seems pretty obvious. Uber is more convenient and it comes directly to your home. People will pay more for that, which is why it probably shouldn’t be so cheap as to make public transit easy to dismiss, especially when that pricing structure encourages more cars on the road with only 1-2 people in them and the negatives that go along with it (more carbon usage, more cars idling in traffic, more road damage, more pollution to inner city dwellers, more danger to pedestrians and cyclists, etc)
So, rather than examining if there are ways to make public transport more convenient, appealing, and competitive, the only solution is to make private transport less appealing?
I didn't say that, but maybe it should be a combination of both. Which is why some cities are partnering with Uber/Lyft to do the last mile part (to the home), but using public transit for the bulk of it.
I do think you really have to question an economic model where Uber/Lyft have clobbered cabs using an unsustainable VC-funded model that will eventually run out and substantially increase cost to the end-user.
I think they're likely profitable in the cities where they've achieved scale. Specifically, I suspect that Uber (and Uber drivers) in the Boston/Cambridge market (where I live) are making a net profit overall.
Drivers who drive full time can afford to pay for the car expenses (variable and fixed). Drivers who drive part time are able to cover the variable costs (and they already had their fixed costs anyway). Uber is probably not losing money in Boston. If all three of those things are true, Uber is sustainable in Boston.
The problem is that ride sharing isn't providing a service with a realistic and sustainable price. In Boston I can get a 15 minute Uber pool trip door-to-door for $3.
They're undercutting public transportation and traditional taxi services that need to operate with a realistic budget that isn't fueled by billions of VC dollars.
If there are two people in the Pool on average, $6 for a 15 minute ride feels like it could be a sustainable price to me. When Pool first launched in Boston/Cambridge, I used to almost always be solo. Now, I would say that my average occupancy is 1.75 to 2 on Pool rides. It's also to the point that Pool rides seem to be cheap when they would result in Pooling and almost the same price as UberX when they'd more likely be solo.
If they're undercutting public transport and doing so at a sustainable price, I view that as healthy competition. If they're undercutting solely based on VC subsidies, that will inevitably end. In the Boston market, I think they're likely profitable on an overall basis, just as grocers are overall (very slightly) profitable, even when they sell loss-leaders and give other subsidies to consumers.
You're not talking a lot into account, especially that drivers are freelancers who own their own vehicles. That $6 per 15 minutes turns into $24/hr (if you're literally non-stop taking fares, which is impossible).
Then you have maintenance, wear, healthcare, retirement, etc... Just accounting for fuel and maintenance these drivers are making minimum wage without any benefits, even if they drive full-time.
The so-called gig economy is bullshit that erodes just about everything it touches, from workers rights to public services.
Agreed. This sounds like a tax that will generate money for the govt and nothing else - it’s not like suddenly people are going to stop going places when the price goes up a tiny amount since there are no viable alternatives to driving in LA, either rideshare or private car.
Exactly. I could understand if the tax were tailored to the ostensible goals:
- No Uber taxes outside of rush hour, since they're not contributing to congestion then.
- Money is specially allocated to mass transit projects and subsidies for Uber pools/Lyft lines at rush hour where they are carrying multiple passengers.
But of course, that's not the proposal, it's just another golden goose.
Seems like the article is going out of its way to make public transit sound attractive with phrasing like "Metro’s sprawling bus network". Anecdotally, nobody I know in LA considers public transit as a realistic option and they routinely make jokes about how bad it is.
Anecdotally, everyone I know considers LA mass transit to be a viable option. This ranges from professionals like doctors and lawyers to the homeless.
I know a number of transplants from NYC, Chicago, and DC who ditched their cars after they moved to LA because it's possible to get everywhere worth going by Metro.
LA Public Transit is fine if you have a very specific set of routes (WeHo/Hollywood<->SFV, Pasadena<->SFV, Most anywhere<->downtown, etc); but it's terrible for one off/ad hoc routes or uncommon commutes.
> Public roads are supposed to be paid for through fuel taxes
Some States do, California does not. The underlying issue is that California roads can infamously cost an order of magnitude more to build and maintain per mile than the same road segment in other States (e.g. interstate highways). It is possible to pay for roads with fuel and use taxes, in some other States it is a constitutional requirement, but the extreme cost of roads in California make it difficult to fund the DoT that way and there is no evidence that California is going to curtail the obvious waste anytime soon.
>The underlying issue is that California roads can infamously cost an order of magnitude more to build and maintain per mile than the same road segment in other States
Why is that? It's not like they have harsh winters like New England or anything.
In my opinion, all taxes besides a land value tax are poor solutions. rent is the final resting place of capital generated by labor and land combined. Taxing unused land higher than used land forces landowners to sell the land to someone who could use the land productively enough to afford the tax bill.
All of taxes deter productivity from increasing. It is better to tax the land date trees grow on, than to tax the output of the trees themselves.
They really said that? Your local pizza place also uses public roads, and they get the profit.
What kind of stupid.........sigh.
The point of having public roads is that it benefits the city by increasing economic output.
Did he forget that there are PEOPLE in those Uber and Lyft cars? Those same people he is supposed to serve? Or does he think the cars are driving around for no purpose making profit the whole time?
Politicians don't serve the people, they serve themselves and seek reelection. Sometimes it happens to be the case that seeking reelection motivates serving the people, but that is nothing more than a happy coincidence. Sometimes a dictator earnestly wants to help his people; that too is a happy coincidence. The genuinely altruistic politician in a democracy is no more common than a genuinely altruistic dictator.
> Did he forget that there are PEOPLE in those Uber and Lyft cars? Those same people he is supposed to serve?
Many of them are tourists or business visitors, not the people local government is supposed to serve. Local government fees designed to milk those people (which incidentally also hit residents) are not at all unusual.
Something else to consider is that traffic was bad way before ride sharing companies started popping up. Secondly, additional taxes will ultimately end up being paid for by people who do not own a vehicle. A better way to help alleviate traffic conditions is to raise gas taxes across the board or maybe just using the tax dollars more efficiently to build public transportation like trains on top of the existing infrastructure that cars typically use. I don't know why California is wasting time on obviously bad legislation. Why do they feel the need to consider the crazy option?
Not to mention Uber and Lyft drivers are wholly responsible for vehicle fees, maintenance, registration, their cellular data plans, wear and tear. California is out of control with it’s liberal tax policies. I spent the first twenty years of my life here and every time I return back I start to remember why I left.
Uber undercuts both public transit and traditional taxi services with prices that are unsustainable and can't provide a living wage for their drivers.
This was OK initially because taxis in many places were benefiting from localized monopolies and also screwing many drivers, but in the long run it means Uber kills all the competition and then just jacks prices back up anyway.
I don't dig the drunk driving fear mongering either. If I hired the homeless $3 a trip to carry drunk people home that doesn't mean my exploitative program should suddenly be free of municipal adjustment.
Agreed. Also consider that using taxation as a punitive tool is both immoral and ignores the fact that the government doesn't deserve the resulting revenue.
Also, they plan to tax ride sharing (which people have shown demand for) and use the money to improve public transit infrastructure (which people have shown distaste for). Why, why, aren't taxes like this directed to improve the infrastructure for the services that are being taxed? Elon Musk is on the right track - build out more roads, under the city, to improve capacity and reduce congestion. Don't burn the money on a service with ridership numbers that are in freefall.
Imagine if a private company substantially raised the price of its premier product (streaming movies, for example) to build tons of infrastructure for the product that nobody wants (DVD distribution hubs, for example) and neglected to build out the infrastructure required for the product in demand. It'd be gone overnight. This is absolute insanity.
The real solution:
- Tax all road users - most easily accomplished through license/registration taxes (IE, you pay an annual fee for a sticker that gives you permission to drive your car/bus/truck in the taxed area) and fuel taxes
- By statute, require the money to be spent to improve/expand the road infrastructure
- Where pollution is a problem, (optionally) spend a portion of the tax to build out EV infrastructure, and encourage EV use by charging reduced fees to EV users
- Subsidize use of ride-sharing type services for people who would normally use public transit services
This would provide efficient, clean, point-to-point transit services for ALL users. Economically disadvantaged folks could finally stop paying the hidden 'poor people transit tax' (increased transit times).
Public roads are supposed to be paid for through fuel taxes, which every Uber and Lyft driver pays. California has gasoline taxes of:
* 55.22c per gallon (second only to Pennsylvania)
* 18.4c per gallon (federal)
* 2.25% sales tax
Additionally, taxing only ridesharing companies may increase incidences of drunk driving. Is another, poorly conceived, tax really a solution?
[0] https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State...