The Washington D.C. Council unanimously voted Tuesday to raise the tax on ride-hailing services 5%, as part of a new funding effort for the area’s Metro, the Washington Post reports.
Increasing the tax on ride-hailing group’s gross receipts from 1% to 6% is part of the Council’s agreement to contribute $178.5 million in funding for public transportation — the district's share of the overall $500 million funding effort. Officials expect the tax to generate 10% of its funding.
While city officials noted that the tax does not have to be passed onto customers, ride-hailing companies have indicated that they will tack it on to fares.
Uber, Lyft, and Via opposed the tax increase, as well as some groups that advocated a tiered system that would exempt carpooling riders from the increase. Following the passage of the bill, Washington D.C. Council member Brandon T. Todd said he will be drafting tiered-tax legislation.