Rideshare companies like Uber and Lyft could start seeing higher fares, should a tax pass the Board of Supervisors and head to the 2019 ballot.
Supervisor Aaron Peskin introduced the tax, co-sponsored by Mayor London Breed, on Tuesday as an alternative to a gross receipts tax that brought the tech companies to the table. Instead, the measure would bring a fare surcharge between 1.5 percent and 3.25 percent, netting up to $32 million a year. Half of the new funds would go toward transportation improvements like increasing bus and rail services and the other half would go toward street safety improvements, such as pedestrian and bike infrastructure.
“We all know congestion in San Francisco is terrible and everyone needs to be part of the solution,” Peskin said. “This requires strategic investment from all of us to prioritize solutions that get people out of their cars, onto public transportation and safely walking and biking.”
The city found out just how bad traffic is in 2017, when a task force found that transportation network companies (TNCs) make up about 15 percent of trips within the city and 20-26 percent of trips downtown during peak periods. About 6,500 rideshare cars are on San Francisco streets on an average weekday.
Another study by the San Francisco County Transportation Authority, whose board Peskin chairs, found that Uber and Lyft alone account for two-thirds of San Francisco’s rising traffic over the past six years. The report was released on May 8 — the same day Uber and Lyft drivers went on strike in multiple cities to protest cuts to driver wages while the companies were expected to receive an influx of wealth from IPOs.
To combat the congestion, a 3.25 percent surcharge would apply to individual rides and a 1.5 percent surcharge would be placed on shared rides starting in San Francisco, as well rides in electric vehicles regardless if it’s shared or not. San Francisco’s ability to impose the tax, should voters approve it by two-thirds, came after Gov. Jerry Brown approved Assembly Bill 1184 in September.
“This measure will invest in our public transportation, continue to make our streets safer, and reduce congestion so that people can get around easier,” Breed said. “This is a collaborative approach to advance San Francisco’s transit-first policy and mitigate the impact of TNC trips on our streets.”
While Uber and Lyft are on board with a measure they helped create, the case may not be the same for another potential tech tax on the 2019 ballot. Supervisor Gordon Mar introduced a 1.12 percent payroll tax on companies for stock-based compensation in what’s known as the IPO tax. It would return the payroll tax rate to its 2012 levels and apply retroactively in May to include the wave of IPOs from companies in San Francisco.
“We have seen the aftermath when major start-ups go public before,” Mar said at a Budget and Finance subcommittee hearing on the IPOs in April. “Over the last decade, we have seen an incredible amount of wealth flood this city, wealth concentrated in the hands of too few, as our middle class shrinks and wealth gap grows.”
Both measures need six votes to make it past the Board of Supervisors onto the 2019 ballot, and pass with two-thirds of the vote.