Uber Technologies Inc (NYSE:UBER) has filed a petition against Skokie village over the new rideshare charges that was passed recently. The company filed the court suit in the Cook County Circuit Court, asserting that the new rideshare charges is against Illinois constitution. The tax was put to effect immediately after it was passed by legislators.
In the recent past, Skokie passed a rule to enforce a fee of 15 cents on every shared trip and 35 cents for single rides on all transportation networks. This includes the entire digital network that connects travelers to the available network for quick transport services. The purpose of the new tax is to collect funds for the maintenance of roads and infrastructure and manage traffic jams caused by ride-hailing vehicles.
Uber opposed the new charges on the grounds that the law infringes on the existing constitution of the state. Furthermore, the tax is imposed on a particular occupation, yet there are other users of road infrastructure in the region. The firm also states that there are no specified boundaries under which the tax applies and hence exposing their businesses to rogue tax collectors. However, Skokie’s spokeswoman declined to comment on the matter.
More cities to follow trend
Several cities and states are planning on how to increase fee charges and/or imposing new taxes on transport network operators. This is a measure to tackle the increasing congestion and diminishing demand for public transport services. For instance, a similar tax extortion plan was proposed recently in Chicago, whereby individual passengers on ride-hailing operations pay $3 more for services. Other towns in Illinois implementing related rideshare charges include Evanston and Hoffman.
The proposed rideshares is an alternative source of revenue for the struggling towns and cities not only for Illinois but globally. For instance, Chicago estimates that the new taxes would accrue over $40 million per annum. The funds can be used to maintain the infrastructure and facilitate social amenities for all. However, the move may impact negatively on the performance of digital transportation network such as Uber.