Taxing Uber
86 Pages Posted: 20 Oct 2020 Last revised: 7 Nov 2022
There are 2 versions of this paper
Taxing Uber
Date Written: August 31, 2020
Abstract
Ride-hailing applications create new challenges for governments providing transit services, but also create new opportunities to raise tax revenue. To shed light on the effect of taxing or subsidizing ride-hailing applications, we extend a pseudo-monocentric city model to include multiple endogenously chosen transportation modes, including ride-hailing applications and endogenous car ownership. We show that most tax and spending programs that cities have currently adopted mildly increase public transit usage. However, the model predicts more significant increases in public transit ridership when ride-hailing applications are subsidized as a "last-mile" provider. Our model indicates that whether ride-hailing services and public transit are substitutes or complements is a policy choice.
Keywords: ride-hailing, taxation, public transit, traffic congestion, optimal tolls
JEL Classification: C60, H25, H71, L88, L98, R41, R51
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