Iowa Drivers React to Ride-Service Sales Tax

DUBUQUE, Iowa (KCRG-TV9) -- Some Uber drivers in eastern Iowa are upset with the tax bill Governor Kim Reynolds signed into law. The law will add Iowa's six percent sales tax to taxi and ride sharing services, such as Uber and Lyft.

Dave Lorenz from Dubuque drives for Uber on Thursday, May 31, 2018. (Allison Wong, KCRG-TV9)

Uber and Lyft provide rides to people through their phone applications. When a person is signed up through the app, he or she can type in an address and the app will assign a driver to pick up that person.

Drivers argue a tax on each ride will put a burden on low-income riders.

Dave Lorenz owns Dave's Used Furniture and Appliances on Central Ave. He said business is going well, but he still drives for Uber to make some extra money.

“I just drive Uber to save it for vacations for my wife and I. That’s primarily why I started driving Uber," he said. “I’m getting up there a little bit in age and it just helps out.”

According to Lorenz, he drives mostly during the days, taking people to and from work. He said most of his riders are people of low-income. "Most of my riders don’t have vehicles. They can’t afford vehicles," he said.

Lorenz said that is why he believes adding the six percent sales tax to rides is a bad idea.

"The way I look at it, if they have a $7 fare that’s gonna cost them approximately a dollar extra in tax back and forth to work" Lorenz explained. "That’s a buck a day, $5 a week, $250 a year.”

Another local Uber driver, Jesse Gavin, agrees with Lorenz.

"If they don’t have dependable transportation, they rely on Uber to get to work," Gavin said. "That’s gonna hurt them. That’s gonna hurt them hard."

Gavin joined Uber when it came to Dubuque a little over one year ago. He argues this tax bill will hurt certain Iowans when Governor Reynolds said it is good for all.

"It seems like the governor and maybe some of the other Republicans made a calculated decision of who they're going to balance that tax cut on and it's people in more urban parts of the state," Gavin said.

Gavin isn't sure how this sales tax might impact ridership. He said, "maybe they’ll be taking the bus a little more, maybe they’ll walk a little bit more. Its hard to say."

Local driver Shelley Welu has about 2,600 rides under her belt between Uber and Lyft. She believes this could really impact the college students in Dubuque.

"In the Dubuque community we have 4 colleges. These students are on a budget. They rely on us for grocery shopping, errands, back and forth to work, and to the airport/bus station," she said. "Uber and Lyft are designed to be affordable and accessible. Uber & Lyft are a necessity for people who can’t drive because they are on a fixed income or have health issues.”

These drivers think it's a bad move.

"It's gonna add up," Gavin said.

"I think it’s a stupid idea for the people that are economically scrapped," said Lorenz.