What to know about San Francisco's Proposition L, proposed tax for rideshare companies

SAN FRANCISCO - San Franciscans will vote on several propositions in November. Proposition L proposes an additional tax on ride-hail companies, like Uber and Lyft, and autonomous vehicle companies. Here’s what to know before casting your ballot on Nov. 5.

What is Prop L?

Here’s what the proposition asks: In San Francisco, should an additional business tax be placed on Transportation Network Companies (ride-hailing) and autonomous vehicle businesses to fund public transportation?

What does that mean? 

If passed, Prop L would impose another tax on ride-hailing transportation companies like Lyft and Uber as well as AV companies like Waymo. The money raised would support public transportation services. In this case, Muni and its fare discount programs. 

This proposition is aimed at companies like Uber and Lyft that have roamed the streets for well over a decade. But it also includes AVs such as Waymo that offer driverless taxi service in the city. 

Who does this Prop L impact?

Prop L would impact the businesses that are being taxed, but some argue the cost could be passed on to customers. 

According to the Ballot Simplification Committee, the city already collects a gross receipts tax between .053% and 1.008% on San Francisco gross receipts. Some of those rates are scheduled to increase in the coming years.

A per-ride tax is imposed on trips that originate from San Francisco. This currently applies to services like Lyft, Uber, which connect drivers with customers, but also Waymo, which connects driverless cars with customers.

Traditional taxi services and limousine companies are not considered TNCs.

Under the new proposal, a new gross receipts tax would be created for TNCs and AV businesses that provide driverless taxi services.  

Breaking down the tax

In addition to existing taxes, Measure L as proposed would create a new gross sales tax receipt on TNCs and AV businesses. The new tax would be on passenger transportation service gross receipts in San Francisco above $500,000.

To take a closer look at the tax rates, click here. 

How would the city use the funds?

The money raised by this tax would go to maintain and preserve public transportation services, like Muni. 

In addition, the money would be used to improve or preserve Muni service to public schools, libraries and parks with an increase in service frequency and by expanding and creating new routes. 

The money would also go toward preserving Muni’s discount and fare-free programs. This would directly impact low-income passengers, seniors, youth and students. 

The Ballot Simplification Committee says the tax would remain in place unless voters repeal it through a future ballot measure. The Board of Supervisors could also amend the tax by two-thirds vote as long as the intent of the tax is not compromised. 

What a yes vote means

A yes vote means you want to create a new gross receipts tax on transportation network companies and autonomous vehicle businesses that provide service for compensation and then use those funds collected by the city to support Muni transportation services and fare discount programs. 

What a no vote means

A no vote means you don’t want to make these changes. 

Who supports Prop L

San Francisco Transit Riders are supporters of the measure. This group says San Francisco taxes ride-hail and robo-taxi companies at a lower rate than other big cities. Even if the prop passes, the ride-hail tax would be lower than similar taxes in Washington, D.C., New York City, and Chicago. 

They say the money from the tax would protect as many as a dozen bus lines from being cut. 

The group says the companies being taxed by Prop L are multi-million dollar corporations that owe a lot of their success to San Francisco but are not currently paying their fair share back to San Franciscans. 

"Companies like Uber and Waymo add a lot of congestion to our streets and draw resources away from public transit, including the paratransit service that delivers hundreds of thousands of trips for seniors and people with disabilities each year," said Dylan Fabris, community and policy manager with San Francisco Transit Riders. 

They counter the claim that Prop L is bad for seniors and people with disabilities and say it is disingenuous considering TNC companies’ poor transit track record with serving people with disabilities, including those who rely on wheelchairs and guide dogs.

"Disabled riders are often turned away by ridehail drivers, or forced to wait a long time for wheelchair accessible vehicles to become available," said Fabris. "As a result, thousands of seniors and people with disabilities rely on Muni and paratransit, which Prop L will help fund." 

The group says Prop L provides a lifeline for Muni and paratransit until more funding can be passed on a regional level in 2026. 

The Yes on L: Fund the Bus campaign says waiting until 2026 is too late to prevent massive cuts to Muni service. 

Yes On L says a large number of businesses agree that San Francisco’s economy thrives when Muni thrives. 

"Patrons and workers alike rely on Muni to access San Francisco’s businesses – in fact, according to Muni’s 2024 customer survey, the number 1 reason people take public transit is for eating out, socializing, and entertainment," Yes On L said. "Without new funding for Muni service, San Francisco’s downtown and neighborhood recovery will grind to a halt." 

Other groups who support Prop L are the Muni operators union, Sierra Club, Harvey Milk LGBTQ Democratic Club, several city merchants associations, a majority of the SF Board of Supervisors and State Sen. Scott Wiener. 

Who is against Prop L? 

San Francisco Chamber of Commerce President and CEO Rodney Fong filed an opponent’s argument against Prop L. The argument is that the proposition increases the cost of living in San Francisco without addressing the root cause of Muni’s problems. It only raises a tiny fraction of the money that Muni needs, the argument says. 

They say vulnerable populations will be burdened and that seniors and disabled people rely on rideshares, but the question remains, would the cost of the rideshare tax be passed on to these vulnerable populations and make San Francisco in general more expensive? 

Other groups who are against this are the California Nightlife Association, Golden Gate Restaurant Association, Together SF Action, SF CITI and Demand Muni Reform.

Lyft says with the city's high cost of living, Prop L only makes things worse. 

When asked if Lyft would pass the cost on to customers, they said it would make rides more expensive. They added that the proposition would cost Lyft drivers hundreds of dollars in earnings each year. 

"This would be particularly devastating for low-income communities who struggle to even access the Muni system and depend on rideshare to get around," said CJ Macklin, Lyft’s senior manager of policy communications. 

Lyft encourages a no vote on Prop L and says rideshare customers are already contributing $20 to $30 million per year in ride fees to Muni alone with more mandated rider fees expected soon. 

Yes on L said if the companies were to pass the full cost of the tax onto the rider, it would at most add 90 cents to a $20 fare. 

Uber deferred to the No on L campaign for official comment and Waymo declined to comment on this story.