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SF’s rideshare tax moves closer to ballot, proposed cannabis tax amended

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A tax hike on rideshare companies in San Francisco advanced to the November ballot Thursday while a cannabis tax was amended and could advance next week.

The tax proposals would join another tax on the the November ballot to fund homeless services, brought before voters through a signature-gathering campaign.

The “Our City, Our Home” measure for homeless services would tax businesses with gross receipts above $50 million between .175 percent and .69 percent, depending on the business type.

The rideshare tax, proposed by Supervisor Aaron Peskin, was opposed by Chariot during the Board of Supervisors Budget and Finance Committee hearing Thursday. The company asked Peskin to exempt them from his proposal, but he declined.

The City Controller’s analysis said that “Uber and Lyft would likely be the source of the vast majority of the tax’s new revenue.” The analysis also said the measure would generate about $20 million annually, but the proposal has since been amended to increase rates and include companies out of town doing business in The City. A new estimate is expected next week.

Under the proposal, The City would impose a new tax rate specifically for transportation network company services, private transit vehicle services, and autonomous vehicle passenger services. These new rates range from .625 percent for gross receipts under $1 million to 1 percent for gross receipts in excess of $50 million.

Currently, these types of companies likely pay rates that range from 0.125 percent to 0.475 percent.

Mayor London Breed told the San Francisco Examiner Tuesday that she had yet to take a position on the tax for homeless services and Peskin’s rideshare tax.

“I haven’t had a chance to look at the details,” Breed said about the funding measure for homeless services. “As soon as I am able to then I will be able to let you know.”

When asked about Peskin’s rideshare tax, she said, “That’s another one. There’s a lot of hearsay right now. And there are some things that are being worked out. They may or may not even happen. I can’t necessarily comment on the details just yet.”

At the Thursday hearing, Nima Rahimi, a representative of Chariot, said they are the only private transit operator in San Francisco and thought they should be exempted because they use union labor, not contractors like Uber or Lyft, and are working with The City closely, such as by sharing data.

Peskin said, “The fact that corporate players behave well does not mean that they should not be included in the tax.”

Supervisors Malia Cohen and Sandra Fewer voted to send the proposal to the full board for a vote July 31 to place it on the ballot.

Supervisor Catherine Stefani opposed it. She told the San Francisco Examiner that her constituents “don’t want to pay more for a ride than they already do.” She added that “any new tax would need to directly address congestion and transportation infrastructure. This does not.”

But Peter Straus, a member of the San Francisco Transit Riders, said he was a “strong supporter” and said the revenue is a needed resource to address a shortfall in funding for transportation needs.

In a statement earlier this year on Facebook, Peskin said, “It’s time for Uber and Lyft to pay their fair share for the congestion, wear and tear and safety hazards they create on our public streets. San Francisco is way behind cities like Chicago, Philadelphia and Portland.”

Meanwhile, Cohen amended her proposed cannabis tax to delay its initial implementation until 2021, instead of phasing in the tax beginning in 2020 as initially proposed. It would generate about $5 million to $6 million by taxing gross receipts between 1 percent and 5 percent, based upon business type and gross receipt amount.

Those in the industry warned that the tax would only encourage a black market and doesn’t give them enough time to stabilize in the new era of legalized cannabis, following the passage of Proposition 64.

“Unlicensed operators are a problem, but they will not go away on their own,” Cohen said. “The City needs the revenue to normalize this industry.”

Jim Lazarus, senior vice president of public policy for the San Francisco Chamber of Commerce, argued for an overall tax structure fix across all industries. “Our problem is with any disparate rates that target industries individually rather than as a whole,” Lazarus said. He also said that the industry should be taxed with rates at levels like other retail businesses. “This industry shouldn’t be unfairly targeted,” he added.

The committee will vote on the measure next Thursday and the full board is expected to vote to place it on the ballot on July 31, the last date for them to do so.

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