In a move widely regarded as the first step toward congestion pricing, the New York state legislature last weekend agreed to tax rides on Uber, Lyft and other ride-hailing services south of 96th Street in Manhattan.

The tax, which will also apply to taxis ($2.50 vs. $2.75 for the ride-hailing companies), was included in the state’s $168.3 billion budget that passed Saturday, the Associated Press reports. The fees are projected to raise about $415 million annually, which will go toward much-needed subway repairs.

Both Uber and Lyft support the surcharge, provided it is, in fact, a step toward broader congestion pricing, Engadgnet reports.

“Congestion will not be fully addressed until the Governor and Legislature enact a comprehensive plan that also addresses all commercial vehicles and the real issue driving congestion: personal vehicles,” a Lyft spokesperson told the news site.

Not everyone agrees.

“It’ll hurt our business,” taxi driver David Heller recently told NY1. “People won’t want to pay more money, and that’s what’s going to happen. There’s 130,000 Ubers, ok? They created the congestion, ok? Get rid of them.”

A smaller tax of 75 cents will also apply to shared-ride operators like Via and uberPOOL. Via voiced concerns to NY1 recently as well, pointing out that if a car contains four riders, that vehicle will be taxed $3.

“A tax that encourages driving or riding alone while imposing a higher fee on efficient pooled vehicles shared by multiple passengers clearly does not represent a win for anyone who cares about congestion in NYC,” a spokesperson told the station.

Congestion pricing in New York has been talked about — but not enacted — for years, either dying in the legislature or winning only partial approval. New York State Governor Andrew Cuomo recently took another stab at the elusive policy with a blueprint containing three suggested phases.

As Aline Reynolds wrote for Next City last month:

Phase One would focus on improving transit service and connectivity in Manhattan and around the city, and would require the NYPD to step up enforcement of the city’s existing traffic laws. The second phase would introduce a surcharge to taxi and for-hire vehicular trips in Manhattan’s central business district, once, over the course of 10 months, the appropriate GPS technology is installed in cars. Phase three would establish a zone-based pricing program — first for trucks, then for all vehicles, that travel through Manhattan below 60th Street. The report predicts that the fee system could potentially generate between 1 billion and 2 billion dollars annually.

Transit advocates are hopeful about the plan, because it originated with the governor’s office. Previous (unsuccessful) proposals have risen to the state from New York City Hall.

“It’s a strong proposal,” John Raskin, executive director of the Riders Alliance, recently told Next City, stressing that all three phases would need to be carried out in full for the plan to work. “Any credible solution to the crisis in transit service will require modernization of some very outdated equipment — and there is no serious way to do that on the cheap … It’s going to take billions of dollars.”

New York is not the first to tax ride-hailing companies, with the fees intended for public transit. Last year, Chicago City Council approved a 15 cent increase to the fee already tacked on to every trip to fund its city-run transportation networks.

Rachel Dovey is an award-winning freelance writer and former USC Annenberg fellow living at the northern tip of California’s Bay Area. She writes about infrastructure, water and climate change and has been published by Bust, Wired, Paste, SF Weekly, the East Bay Express and the North Bay Bohemian

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