Toronto is feeling the pinch this year as rides with a tap of your phone become pricier. In a daring late-year move in the 2026 city budget overhaul, Toronto raised the mandatory Vehicle for Hire fee that is levied on every ride. The city tax for ride-sharing services and taxi brokers means that a higher amount of every ride will go to the city coffers. In the good old days, Toronto’s ride-sharing fee used to be a mere 30 cents for every ride. Essentially, it was a administrative fee added to cover digital driver licenses and safety checks for private rides. But in the 2026 budget overhaul, the city tax for ride-sharing services has been raised to 90 cents for every ride. And with that comes a new congestion tax. So, the next time you take an Uber to be dropped at downtown Toronto during peak hours, be prepared to shell out an extra $1.50 for every ride. From a mathematical perspective, the new tax scheme for ride-sharing services in Toronto looks like a goldmine for the city. Tens of millions of Torontonians take tens of millions of rides every year. And with the hike in the city tax for ride-sharing services, the city stands to gain tens of millions of dollars for every ride. The money will go to the TTC, a system that is highly subsidized and in debt.
Predictably, the tech giants, namely Uber and Lyft, are furious about Toronto’s new municipal tax plan. Well-funded lobbyists worked hard throughout 2025 arguing, with conviction, that increasing the tax per trip would make these essential rides unaffordable. They argued, with conviction, that gig workers, who were already struggling with increasing insurance and gas costs, would not be able to cope with increasing taxes for the rest of Toronto. So, they folded the 2026 tax increase into their pricing model and passed it directly onto the rider.
For the average Toronto citizen, it is undeniable and immediate. An average Uber ride home on a Friday night, going home from a night out in downtown Toronto, is now over $22 with the added municipal tax and new congestion pricing.
Despite a loud backlash from late-night workers and suburban commuters who rely on a reliable late-night public transportation option, Mayor Olivia Chow and her administration remain unswayed. Their stance is clear: if cars want to continue clogging Toronto’s streets for corporate greed, they need to pay for sustainable transportation.