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Uber, Lyft Could Face 3.25 Percent Tax in San Francisco

Sept. 24, 2018, 6:15 PM

San Franciscans catching rides through Uber, Lyft, and other ride-sharing platforms could pay a 3.25 percent tax under legislation clearing the way for a ballot measure next year.

California Gov. Jerry Brown (D) signed a bill (A.B. 1184) Sept. 21 that authorizes an initiative, to be placed before voters next year, to impose a 3.25 percent per ride and 1.5 percent per pooled trip tax on ride shares. Uber Technologies Inc. and Lyft Inc. supported the bill. The measure followed a handshake agreement to pull from this November’s ballot a proposed initiative that San Francisco supervisors were pushing in Uber and Lyft’s hometown.

A.B. 1184 also authorizes a tax on autonomous vehicles that are used commercially and exempts zero-emission vehicles. Proceeds from the tax—if two-thirds of voters approve—would support transportation and infrastructure. The tax is expected to bring in roughly $30 million in the first few years.

“As San Francisco’s economy grows, it must find ways to move people around safely. The Governor’s signature on AB 1184 is an important first step to raise much-needed revenue that’ll improve roads, bike lanes, public transit & other transportation projects,” legislation co-author Assembly member Phil Ting (D) said in a statement Sept. 23.

‘Disproportionate Impact’

The San Francisco Bicycle Coalition, which is looking at funds for bike lane improvements, backed S.B. 1184.

“Transportation network companies like Lyft and Uber have a disproportionate impact on San Francisco’s streets, especially when it comes to the safety of people biking,” Brian Wiedenmeier, bicycle coalition executive director, told Bloomberg Tax in a Sept. 21 emailed statement. “We hope to work with both companies as well as elected officials and our over 10,000 members to get an initiative on the ballot that will provide funds for badly-needed transportation projects like more protected bike lanes.”

TNCs drive 570,000 vehicle miles within the city on a typical weekday, the San Francisco County Transportation Authority estimated in a June 2017 report.

The Alliance of Automobile Manufacturers, however, whose members include BMW of North America LLC and Ford Motor Co., opposed creating a tax on developing technology.

Lawmakers last year approved legislation that gave TNC drivers a pass from having to register where they operate, and instead requires a business license where the drivers live, a bill San Francisco fought.

San Francisco sued Brown and Attorney General Xavier Becerra (D) over the law. The parties agreed to release Brown, and Becerra remains a defendant.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

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