- Uber and Lyft reached a deal with San Francisco on a proposed tax on the companies’ rides, averting a potential ballot initiative that would have asked voters to approve a steeper tax on the companies.
- Under the proposed deal, the city would collect a 3.25% tax on net rider fares (excluding tolls and tips) for single trips, and 1.5% on shared trips that originate in San Francisco. There is still debate over where to set the tax rate for para-transit rides, cleaner vehicles, trips starting after midnight and those originating in low-income areas, according to the San Francisco Chronicle.
- Supervisor Aaron Peskin estimated the proceeds could total $30 million a year, which will go to transit uses and be administered by the San Francisco County Transportation Authority (SFCTA).
Agreeing to the proposed tax — which requires several steps before it could be implemented — is an acknowledgement by Uber and Lyft that they have played a role in San Francisco’s traffic congestion. A study by the SFCTA found that Uber and Lyft are responsible for 82 million trips a year, with more than 80% of drivers coming from outside the city to catch fares in San Francisco. That mirrors the findings of new report from Schaller Consultants, which found that ride-sharing companies have added 2.8 new vehicle miles for every 1 personal vehicle mile removed.
“Voters have made it clear that they want corporations to pay their fair share to meet that need, particularly when there is a nexus to issues like congestion and traffic,” Peskin said in a statement. “I’m optimistic that this concession on the part of the TNC’s signals a shift in their corporate culture and a willingness to work with – not fight with – local governments.”
Getting the tax will first require the California legislature to pass a bill that affirms San Francisco’s authority to enact local taxes on shared trips (multiple legislators in both chambers have said they support it). City voters would then have to vote on a ballot measure in November 2019 and approve it by a two-thirds margin, but the Chronicle reports final passage is expected to go through given the cooperation of the companies. It’s unclear whether Uber and Lyft would add the taxes to their fares.
Cities around the country have started looking at taxing or increasing fees for ride-sharing companies, in part because of their role in traffic increases. Chicago this year increased its per-ride tax by 15 cents to fund transit system safety improvements, while Washington, DC followed its lead and increased its per-ride by 5%, also to fund transit improvements. Reaching this agreement in the two companies’ home state is significant, since it shows that there is a path for imposing new levies on the companies and avoiding a potentially bruising fight over a ballot measure.