Tax on Uber, Lyft rides heading to voters

New fee intended to reduce traffic congestion, fund transit

A tax on fares charged to riders of transportation services like Uber and Lyft is heading to the November ballot.

The Board of Supervisors Budget and Finance Committee approved of the tax Wednesday and the full board is expected to vote next week to place it on the Nov. 5 ballot.

“The goals are very simple. This is a traffic congestion mitigation tax,” said Supervisor Aaron Peskin, who proposed the tax along with Mayor London Breed. “We all know that up there with homelessness and housing affordability, traffic congestion is one of the top concerns of the people of the City and County of San Francisco.”

All 11 board members support the tax measure, as do Lyft and Uber.

Ted Egan, chief economist with the City Controller’s Office, estimates the tax, most of which will be passed on to the riders, will generate about $30 million to $35 million annually.

The money is generated from the imposed tax of 1.5 percent tax on the fares of shared rides and 3.25 percent tax on all other rides. The tax on all rides in electric vehicles is 1.5 percent for five years. The tax would go into effect 2020 if approved by two-thirds of voters.

Half the funding raised would go to the San Francisco County Transportation Authority, which is run by The City’s 11 elected supervisors, and half to the San Francisco Municipal Transportation Agency.

The City’s transportation task force identified $22 billion in funding needs between now and 2045, which includes “everything from roadway maintenance needs and unfunded bicycle projects, to Muni service and facility challenges and funding gaps for large regional projects like Caltrain’s Downtown Extension.”

“This would be a proverbial drop in that bucket,” Peskin said.

To ensure The City’s ability to enact the tax, a state law, Assembly Bill 1184, was passed in Sacramento last year.

But The City does face other limitations. “We can’t regulate or cap TNC vehicle traffic because of state preemption,” Peskin said, adding that as much as 50 percent of the increase in traffic on the roads “in the last several years is the result of Transportation Network Company vehicles.”

The tax is expected to have a “ to have a mildly negative impact on the city’s economy,” according to Egan’s economic impact report, “equivalent to about 190 jobs and $25 million in GDP, in today’s dollars.”

“Additionally, both the tax on congestion-causing TNCs, and the spending on transit improvements, should reduce the congestion and benefit the economy, although that cannot be quantified,” the report said.

The report said that one would expect that raising the fares to ride in Uber and Lyft would reduce their use, and the subsidy for public transit should increase ridership.

“It is likely that the net effect would be to reduce congestion, which would be a positive impact for the city’s economy,” the report said.

The City estimates that the average traffic speed during the evening commute has slowed by 20 percent between 2011 and 2017 due to congestion and average travel time to get to work has increased by 15 percent during the same time period.

Egan said multiplying half workers wages by the increased commute times is one way transportation planners arrive at the value of commuting time.

“The additional delay costs the city workers $3 billion more per year,” the report said.

jsabatini@sfexaminer.com

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