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As if Uber’s up-front pricing shenanigans and New York City transportation taxes/fees weren’t already making a ride in the Big Apple expensive enough, it’s about to get even worse.
New York lawmakers just passed a new “congestion surcharge” for all for-hire rides originating south of 96th Street in Manhattan. Uber, Lyft and other ride-hailing passengers will incur a $2.75 per ride surcharge. Yellow taxi rides will also get a $2.50 per ride surcharge. Ride-share services such as UberPOOL and Via will have a reduced $0.75 per ride surcharge added to each passenger’s cost.
This law was passed as a late addition to the New York state budget. The New York state fiscal year runs from April 1 to March 31, the 31st being the last day state lawmakers had to pass a budget. New York Governor Andrew Cuomo signed the budget into law on Friday night, just before the deadline.
The good news is that the “congestion surcharge” won’t take affect immediately. NYC visitors and residents will have another nine months of surcharge-free rides before the fee kicks in January 2019.
This surcharge is expected to generate $421 million per year in revenue, which is obligated to go to the underfunded NYC Metropolitan Transportation Authority (MTA). And, in case you’re skeptical that this revenue will actually make it to the MTA, the budget reportedly includes a clause allowing the MTA “to seize the congestion payments if necessary.”
NYC taxi drivers aren’t thrilled with the plan. New York Taxi Workers Alliance Executive Director Bhairavi Desai didn’t mince words when sharing his thoughts on the new fee, telling the New York Post:
He might just be referring to Uber in that statement. While one would assume that Uber would be against this surcharge, the opposite is true. In a statement to Quartz, Uber admits it “spent close to $100,000 on a coalition effort to back the congestion plan.”
And that’s because Uber sees this fee as a huge boost to its UberPOOL service. Even though UberPOOL rides will still be dinged $0.75 per rider, the ride-hailing company hopes that the difference between that $0.75 ride-share fee and the $2.75 fee for a traditional Uber will prompt more riders to choose the UberPOOL option. Even though a recent report found that Uber is actually losing money on UberPOOL rides in NYC, The Rideshare Guy calculated Uber scored a $86.29 payout from one triple-matched ride.
So, if this surcharge prompts more riders to choose UberPOOL and that prompts more efficient ride matches, Uber stands to benefit greatly from a new surcharge on its services.
Source: thepointsguy.com