San Francisco Chronicle

Tax could be levied on ridehail trips

Even Uber, Lyft back Prop. D on November ballot

- By Carolyn Said

San Francisco officials have struggled for years with the city’s congestion problems. One small way to ease some gridlock? Tax ridehailin­g services such as Uber and Lyft, which contribute to traffic, to help pay for better public transit and street safety.

That’s the rationale for Propositio­n D, the “Traffic Congestion Mitigation Tax,” supported by both major ridehailin­g companies, which would tax every Uber and Lyft ride that starts in San Francisco.

The revenue would help boost Muni as well as finance some bicycle and pedestrian safety improvemen­ts. The city estimates that Prop. D would bring in $30 million to $35 million a year — a modest addition to Muni’s $1.2 billion twoyear operating budget for 2019 and 2020.

“It’s long past time that Uber and Lyft be part of the transporta­tion solution in San Francisco and pay for mitigating the impacts that they’ve had on every street in our city,” said Supervisor Aaron Peskin, who crafted the proposal.

The tax’s backers, who represent the city’s entire political establishm­ent, point to a study that said twothirds of the city’s

increased congestion over six years was caused by ridehailin­g.

The tax would be 3.25% on most rides, and 1.5% on shared rides. The lower rate also would apply to electric cars until the end of 2024.

In other words, a $10 regular ride would incur a tax of 32.5 cents; a $10 shared or electric ride would be taxed 15 cents. No tax would be paid on tolls, airport fees and tips to drivers, nor on a portion of a ride outside San Francisco.

The tax would be in effect from 2020 through 2045 and would apply to selfdrivin­g cars if the companies started using them for paid rides. It would not apply to taxicabs or private cars.

Prop. D proceeds would be split between the San Francisco County Transporta­tion Authority, which would direct them to making streets safer for pedestrian­s and bicyclists through measures such as widening sidewalks and adding bike lanes, and the San Francisco Municipal Transporta­tion Agency, which would use them to improve Muni, by buying more buses and trains and hiring more drivers, for example.

Peskin got buyin from both companies because Prop. D is less onerous than an earlier idea: a tax on ridehailin­g companies’ gross receipts at rates up to 0.975%. Getting Prop. D on the ballot in San Francisco required the Legislatur­e to pass a bill last year giving the city the authority to tax Uber and Lyft.

Uber has contribute­d $450,000 to the Prop. D campaign, and Lyft has put in $200,000. Lyft didn’t answer questions about whether it would contribute more to bring it closer to parity with Uber.

Mayor London Breed, the entire Board of Supervisor­s, and organizati­ons such as the Chamber of Commerce, SF Bicycle Coalition, Transit Riders, Walk SF and the SF Labor Council all support Prop. D.

The San Francisco Republican Party opposes the tax, arguing that the city shouldn’t pick winners and losers in the transporta­tion arena. The San Francisco Taxi Workers Alliance is also against the measure, which it says will do little to reduce the number of Uber and Lyft cars on the streets; as is the Libertaria­n Party, which says it could encourage people to drive their own cars instead of using ridehailin­g services.

Despite all the heavyweigh­t support, Prop. D is not a sure thing. Because the money is dedicated to specific purposes, the tax must be approved by twothirds of voters to pass.

“Traffic congestion is such a big issue that my take is that it should pass, but twothirds is a pretty big hill to climb,” said Jim Ross, a political consultant in Oakland, who’s not involved in the campaign.

Probolsky Research, a nonpartisa­n independen­t research firm, polled 400 San Francisco voters in late September via phone and online. It found that 47% support Prop. D, 34.8% oppose it and 17.3% are undecided.

“A month out, it’s a steep hurdle (to add enough support to pass), but I think it’s doable,” said Adam Probolsky, president of the firm.

Maggie Muir, who’s running the campaign for Prop. D, dismissed that poll as too narrow and too early, taking place before most voters had learned about the measure.

The campaign’s own polling showed overwhelmi­ng support for the measure’s proposed benefits, she said, with more than 80% of respondent­s saying they’d be more likely to support the measure when they heard about specific improvemen­ts it could fund such as providing more Muni buses and trains, repairing roads, improving pedestrian safety, reducing congestion and improving transit for people with disabiliti­es. The poll was conducted via both phone and online among 500 likely November voters.

“Voters are tired of the constant congestion and are ready to support this measure when they learn about the improvemen­ts it will bring to Muni service and pedestrian safety,” she said.

The fact that Uber and Lyft back the initiative may turn off some voters, said Jon Golinger, an electionla­w professor at Golden Gate University.

“Voters tend to be skeptical about what the agenda is when a company is paying for a ballot measure,” he said. “People want to know what the real impact on them will be.”

Uber and Lyft haven’t said whether they would pay the tax themselves or add it to riders’ bills. Both companies are newly public and have taken a beating on Wall Street for their deep unprofitab­ility.

“It is likely that the great majority of the tax will be passed on to consumers,” said an economic impact report by Ted Egan, San Francisco chief economist about Prop. D. That report said the tax might cause the loss of 190 jobs over 20 years.

 ?? Gabrielle Lurie / The Chronicle ?? Uber and Lyft passengers could feel the pinch if San Francisco voters approve a tax in November on ridehailin­g trips that start in the city.
Gabrielle Lurie / The Chronicle Uber and Lyft passengers could feel the pinch if San Francisco voters approve a tax in November on ridehailin­g trips that start in the city.
 ?? Gabrielle Lurie / The Chronicle ?? Lyft is a major backer of Prop. D, which would tax ridehailin­g trips that start in San Francisco.
Gabrielle Lurie / The Chronicle Lyft is a major backer of Prop. D, which would tax ridehailin­g trips that start in San Francisco.

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