State & Local Government Policy, Business and Technology

Taxing the New Economy, Starting With Uber, Lyft

Stateline: First in an occasional series of stories on how states are overhauling tax codes to adapt to a new economy.

If any service best reflects the new economy, it may be hailing rides on demand from big companies like Uber and Lyft. They let riders avoid the hassle of flagging down a taxicab by simply tapping a mobile application on a smartphone. A driver arrives within minutes to take them to their destination.

But unlike old-economy taxicab companies, the new ride-hailing services often pay little to none of the license fees or taxes that taxi businesses hand over to cities, counties and states for the right to operate. If anything, their appearance on the scene reduces the taxes and fees that government counts on by taking customers away from the old-economy taxis.

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