Worst Congestion Culprits Go Untaxed

New York, NY – The Independent Drivers Guild is denouncing the state’s unfair congestion tax at a hearing held by the city’s Taxi and Limousine Commission today. The Guild, which represents and advocates for more than 70,000 app-based drivers in New York City, also released a new analysis that shows the state tax unfairly targets app-based drivers and riders with a larger tax burden than the taxi portion of the for-hire sector, while also failing to tax the worst congestion culprits: commercial, construction, and delivery vehicles. The new congestion tax will go into effect in January and cost riders $2.75 per trip on for-hire vehicle trips and $2.50 on taxi trips that enter Manhattan below 96th street.

$20 Fare – Taxed $5.03 for App-Based FHV vs $3.30 for Taxi
Starting in January, a $20 trip in an app-based vehicle will be taxed $5.

“The new state congestion tax is an unfair burden to put on the hundreds of thousands of working families who rely on apps like Uber and Lyft for transportation or for their livelihood. The new taxes will be particularly harmful to app-based for hire vehicle riders, whose trips are already much more heavily taxed than taxi trips, and for-hire drivers who are already struggling to make ends meet. For-hire vehicle trips already generate over $260 million per year in sales tax,” said IDG founder Jim Conigliario, Jr. “Meanwhile, the state failed to tax the worst culprits for congestion, the commercial and construction vehicles as well as delivery vehicles for companies like Amazon that double park and block traffic all day, every day.  Our city should demand the legislature repeal this sham tax and replace it with a fair tax that targets the real culprits of congestion.”

Written Testimony from IDG President Jim Conigliaro, Jr:

New York state’s “Congestion Tax” is a disaster. It is a regressive tax that will harm the more than half a million working families in our city who rely on for-hire vehicle service for transportation or for their livelihoods without even putting a dent in congestion or the MTA shortfall. The new taxes will be particularly harmful to app-based for hire vehicle riders, whose trips are already much more heavily taxed than taxi trips, and for-hire drivers who are already struggling to make ends meet. Our city should demand the legislature repeal this sham tax and replace it with a fair tax that targets the real culprits of congestion.

With the new state tax on top of existing taxes, Uber and Lyft rides will be taxed $5 on a $20 trip starting in January. For taxis, which are exempt from sales tax, $3 of such a trip will go to MTA taxes, with an additional $0.30 going to an improvement surcharge for medallion owners. Meanwhile the real culprits of congestion – the delivery, commercial and construction vehicles that block the flow of traffic – get off scot-free.

To call this a congestion tax is a lie. Experts agree the new tax will not impact congestion as it only targets one segment of vehicles: for-hire vehicles. Which is exactly the WRONG segment to target. Why?  

First of all, the worst culprits for congestion are the commercial and construction vehicles as well as the unregulated delivery vehicles for companies like Amazon and food and grocery deliveries which double park and block traffic all day, every day. But the state’s new tax fails to address these sectors. Apparently, the politicians up in Albany were too busy wooing Amazon to regulate and tax the “Prime Now – Same Day Delivery” and “Free Two Day Shipping” giant that is clogging our city’s streets.

Secondly, New York City has already devised a much smarter way to address the growth in the for-hire vehicle sector. To stop app companies from flooding the streets, the city passed a law requiring apps that put excess drivers on the road to pay drivers much higher rates. The city’s solution attacks the problem of congestion while also making New York City the first in the nation to require a livable, minimum wage for app-based drivers.

Finally, putting the sham of any kind of “congestion” objective aside and looking at the real issue of an MTA bailout, it doesn’t make sense to target Uber and Lyft riders there either. Riders of for-hire vehicles are working people who are already paying more than their fair share of taxes – including over $260 million in sales tax alone on FHV trips in 2017. While taxi trips, which are exempt from New York’s nearly 9% sales tax, generated less than a quarter of that sum in MTA taxes.

In its current form, all this so-called “congestion tax” will do is make it less affordable and less possible for working people to live without cars of their own and harm the livelihood of 100,000 poor immigrant working families. Meanwhile, the big businesses that clog our streets with trucks and the city’s wealthiest don’t have to pay the tax at all. After all, those who rely on private cars and drivers are exempt.

Media contact: press@drivingguild.org