Adam Kovacevich: Washington is considering a delivery tax to fund roads, but the idea is full of potholes

Last year, when Seattle weighed a proposed wage cap for food delivery drivers, a chorus of opponents warned that the policy would raise prices, hurt local businesses and hurt consumers already feeling the pinch of inflation. Local MPs should have listened.

Seattle is now considering rescinding the policy — just six months after it went into effect. But even after Seattle’s law backfired on city lawmakers, state lawmakers could end up making the same mistake again, triggering a delivery price hike for everyday essentials.

Earlier this summer, state lawmakers commissioned a study examining the impact of a new tax on online purchases. With gas tax revenue falling, policymakers have been interested in raising a new tax on online orders to fund infrastructure projects.

Lawmakers in Washington should know better. Online delivery charges would disproportionately impact vulnerable populations, add more cars to the road, increase emissions and stress local businesses.

There’s no getting around it: delivery fees are inherently regressive. They hurt working families by eating up a larger share of their income — while wealthy families could barely register the extra taxes. They disproportionately affect the elderly and people with reduced mobility who disproportionately rely on the delivery of essential goods.

There is also an environmental fee. By discouraging online ordering, delivery fees can lead to more traffic, higher emissions and higher gas costs for consumers and workers. Imagine if instead of one UPS truck delivering 200 purchases, there were 200 additional cars on the road making individual trips to the store. New research from my organization, the Chamber of Progress, found that e-commerce delivery is twice as efficient as individual car trips.

It is ironic that delivery charges are meant to fund roads when in reality they end up driving more road use.

Washingtonians deserve a real and sustainable solution to poor road conditions. And lawmakers should think twice before burdening citizens with a regressive tax, all to put a band on a sagging budget deficit. Check out how delivery fees have gone in other states.

Last year, New York Democrats scrapped a plan to include online delivery in the proposed Assembly budget, acknowledging how the proposal would raise prices for those who can least afford it. New York’s proposal drew criticism from national lawmakers, who pointed out how it would unfairly target the poor and working class.

In Maryland, lawmakers scrapped a proposal to add a 50-cent tax to the cost of every online grocery, retail and takeout order after backlash from voters who overwhelmingly opposed the tax.

Colorado and Minnesota, the two states that actually succeeded in enacting a delivery tax, offer even more cautionary tales. Colorado’s rollout of the tax was so disastrous for local businesses that lawmakers had to simplify the law to help companies comply. And Minnesota’s business community is bracing for the impact after the state’s 50-cent tax went into effect in July.

In Washington, businesses are already sounding the alarm about how delivery fees could destroy local economies by reducing consumer spending power and reducing demand. This would have a ripple effect throughout the economy, especially for sectors that rely on e-commerce. And by incentivizing consumers to shop at brick-and-mortar stores, delivery fees would make it harder for small businesses to compete online.

For a growing number of Washingtonians, deliveries aren’t a luxury — they’re a necessity. Statewide polls show inflation is one of Washington’s top concerns. A delivery charge would hurt the people and businesses who can least afford it.

Adam Kovacevich is the founder and CEO of the center-left tech industry coalition Chamber of Progress. Adam has worked at the intersection of technology and politics for 20 years, leading public policy at Google and Lime and serving as a Democratic Hill aide.