Measure for Measure: Proposition D
Voting is an essential part of civic engagement, but it can be confusing, especially in local elections. There are some hyper-local issues that we’re deciding on in the upcoming election in SF on November 5th. That’s why we’re doing this round-up of the measures, to provide some insight into the 2019 ballot.
Check out our round-up page for more articles on the other measures.
What is Proposition D?
Proposition D would institute a small tax on Uber and Lyft rides to reduce traffic congestion and raise money for public transportation. Specifically, it would tax standard Uber and Lyft rides at 3.25% and shared rides at 1.5% beginning January 1, 2020. Until 2025, all rides in zero-emission vehicles would be taxed at 1.5%. The $30–35 million in annual revenue raised by the tax would be split between Muni and safety improvements for pedestrians and cyclists. City economist Ted Egan believes that most of the cost of the tax will be passed onto riders.
The measure began as a 0.975% gross receipts tax on transportation network companies (TNCs) like Uber and Lyft proposed by Supervisor Aaron Peskin and supported by the Board of Supervisors. Uber and Lyft came to the negotiating table to avoid an expensive campaign and worked out the compromise with Supervisor Peskin which only taxes the net fare, and excludes airport fees, tolls, and tips.
The measure follows last year’s AB 1184, which gave San Francisco the authority to tax TNC rides. San Francisco would not be the first city to tax TNC rides. New York, Chicago, and Washington D.C. have also passed TNC taxes.
The proposition requires a two-thirds majority to pass because the revenue is earmarked for a specific use.
Why does it matter?
Proposition D is important because it should help alleviate traffic congestion in San Francisco and fund public transit. A 2018 study by the San Francisco County Transit Authority (SFCTA) found that over half of the rise in road congestion from 2010 to 2016 was due to rideshare traffic. The lower tax rate on rides in zero-emission vehicles may incentivize their use and help reduce carbon emissions from TNC rides.
While this modest tax is unlikely to lead to a major reduction in traffic, it will force riders to pay for some of the social costs of TNC rides, and is one of the city’s only options because it cannot directly regulate or cap TNC traffic due to state preemption.
What are the arguments for Proposition D? Who’s funding the measure?
Proponents hope that the tax will encourage the use of shared rides, zero-emission vehicles, and other forms of transportation, reducing traffic and carbon emissions in the city. The tax revenue would also help improve Muni service, although the additional funding would be very small compared to Muni’s $1.2 billion annual budget. The measure would also provide funding for pedestrian and cyclist safety improvements, although again it would only provide a small amount of additional funding.
It is supported by Mayor Breed and the entire Board of Supervisors as well as the San Francisco Bicycle Coalition, Walk San Francisco, and SF Transit Riders. See the full list of endorsements here.
After negotiations with Supervisor Peskin on the terms of the measure, Uber and Lyft agreed not to oppose the measure. They are the two major funders of the measure. See more funding details here.
What are the arguments against Proposition D? Who’s funding the opposition?
Arguments against Proposition D come from opposite ends of the political spectrum. The San Francisco Republican Party will write the opposition argument in the forthcoming official voter information guide. The San Francisco Green Party opposes Proposition D because they feel the tax rate is too low.
As with sales taxes, there are equity concerns about the impact of the tax on lower-income riders, who would pay the same rate as higher-income riders.
The Sierra Club and Coalition for Clean Air do not oppose Proposition D, but they have expressed disappointment that in their view the measure does not adequately incentivize zero-emission vehicle use.
There have not been any registered financial contributions in opposition to Proposition D. See more funding details here.
What is TechEquity’s position on Proposition D?
While the tax is likely too small to make a major dent in San Francisco traffic, it would make the price of Uber and Lyft rides more accurately reflect their societal costs. The revenue raised by the tax would also provide needed funding for Muni and safety improvements for cyclists and pedestrians. Ultimately, this tax can serve as a piece of a larger congestion and climate change policy package, so we think it’s worth supporting. We say vote yes on Proposition D!
Check our round-up page for more measure articles as we publish them!
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