See our November 2024 SF Voter Guide for a nonpartisan analysis of measures on the San Francisco ballot, for the election occurring Nov. 5, 2024. The following measure is on that ballot.
Proposition L would tax ride-hail companies, including those that operate self-driving cars, and devote the tax revenue to improving San Francisco’s public transit.
Support
The San Francisco Municipal Transportation Agency, which operates the Muni public transit system, faces a major budget deficit due to reduced ridership and fare revenue in the pandemic’s aftermath.
Proposition L’s funding would protect up to a dozen bus lines from being cut and expand discount fare programs, says nonprofit San Francisco Transit Riders in the official proponent argument for the measure. That would help commuters who could not afford ride-hail services, lacked personal vehicles or faced mobility issues and might struggle to walk or bike to their destinations.
Without this funding, overall traffic congestion could increase and parking availability could decrease, the proponents say. With fewer public transit options, commuters might resort to cars or ride-hail services, which are less passenger-efficient than buses and light rail.
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The measure might also help the city’s downtown area recover from the ravages of COVID-19, said proponent and public transit advocate Chris Arvin. If foot traffic to the area increased, more frequent bus service would be necessary to accommodate it; today’s service is sparse outside of peak commute hours.
Proposition L’s supporters include many local and other groups, like Transport Workers Union Local 250A, which represents Muni operators, as well as Senior and Disability Action, the Sierra Club and the Harvey Milk LGBTQ Democratic Club. State Sen. Scott Wiener and a majority on the Board of Supervisors support it too.
Opposition
But Proposition L would also indirectly increase ride-hail costs, says the San Francisco Chamber of Commerce in the official argument against the measure. Companies would make up their losses from the tax by jacking up the price of their rides, which are more convenient for senior and disabled commuters than buses since they offer door-to-door service, the chamber said.
Proposition L would also fail to address the root causes of the transportation agency’s financial woes while insufficiently holding the government accountable for how it would spend the tax revenue, the chamber added.
Other opponents include TogetherSF Action, the Golden Gate Restaurant Association, California Nightlife Association and SF CITI, a tech industry trade association.
What it would do
Proposition L would levy a new tax on ride-hail companies, including Lyft, Uber, private limousine services and Waymo, which uses autonomous vehicles. The tax would apply to companies’ gross receipts, or total earnings from rides provided in San Francisco. Earnings from rides outside the city or from other services such as meal delivery would not be taxed.
The tax rate would increase with the companies’ earnings:
- 1% on earnings between $500,000.01 and $1 million;
- 2.5% on earnings between $1,000,000.01 and $2.5 million;
- 3.5% on earnings between $2,500,000.01 million and $25 million;
- 4.5% on earnings over $25 million.
The tax could generate $25 million annually, the city controller said, based on the past performance of a similar tax. Up to 2% of the tax revenue would go toward covering the cost of administering it.
The San Francisco Municipal Transportation Agency would use the money to boost bus service frequency and add routes to public schools, libraries and parks. It would also expand discount fare and fare-free programs for people with disabilities, seniors, youths and students. The funding might let Muni increase outreach for, and uptake of, its Lifeline Pass program, which discounts rides within the city for low-income people.
San Francisco’s current 3.25% tax on ride-hail companies is lower than those in some other major cities, and that would still be true if Proposition L passed. For example, the tax is 6% in Washington, D.C., and 8.9% in New York, plus a $2.75 congestion charge for any ride that passes through Manhattan.
Campaign finance
As of Oct. 7, the “Yes on L” campaign committee had raised $278,677, including $40,000 from Jessica Jenkins, $30,000 from Laura Yakovenko and $20,000 from Benjamin Cochran, according to data from the San Francisco Ethics Commission.
The “No on Prop L” campaign committee had raised $912,838, including $750,000 from Uber and $103,000 from Lyft.
History and context
Muni serves hundreds of thousands of passengers every day, connecting them to work, school, food, housing and more.
But that foot traffic is a shadow of what it was before the pandemic, which normalized remote work. The drop in people taking buses and light rail to their downtown offices diminished fare revenue, which accounts for 10% of the San Francisco Municipal Transportation Agency’s operating budget, down from a pre-pandemic 30%. Emergency financial assistance from the federal government is set to run out by 2026.
SFMTA faces a $214 million deficit that threatens services in coming years.
San Francisco has a goal of producing net-zero greenhouse gas emissions by 2040. Transportation was responsible for 44% of citywide emissions in 2020, and that share could fall if public transit were more robust and more people rode it, according to the city’s 2021 Climate Action Plan.
Ride-hail companies have made city roads more congested and grown San Francisco’s carbon footprint. From 2010 to 2016, the companies were responsible for 51% of the city’s increased traffic and 47% of total vehicle miles traveled, according to a 2018 county Transportation Authority report. Ride-hail vehicles emit roughly 50% more carbon dioxide per passenger mile traveled than commuter-owned vehicles, according to a 2019 report from the California Air Resources Board.
Votes needed to pass
Proposition L requires a simple majority of “yes” votes to pass.
The tax would be permanent unless voters repealed it through a future ballot measure, which would also require a simple majority of “yes” votes to pass. The Board of Supervisors could amend the tax with a two-thirds vote, as long as they did not fundamentally change it — for example, by redirecting it to apply to a different industry.
This November, San Francisco voters will also consider Proposition M, an overhaul of the city’s business tax. In the event that voters passed both measures:
- If Proposition L got more “yes” votes, both measures would be implemented.
- If Proposition M got more “yes” votes, only Proposition M would be implemented.
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