Philadelphia’s New Rideshare Tax Sparks Backlash Over Who Really Pays

Image above used under license from robert at stock.adobe.com.

The definition of insanity is trying the same thing over and over, expecting different results. The introduction of Philadelphia’s new rideshare tax exemplifies this definition almost exactly. In an effort to bolster support for the School District of Philadelphia’s teachers and staff, Philadelphia’s mayor, Cherelle Parker, introduced a rideshare tax on March 12th: a 20-cent tax on all Uber and Lyft rides to provide additional funds for the ever-growing gap in the SDP’s budget (cite). Since then, amendments to the tax plan have increased the tax from 20 cents to an additional $1 per ride (cite). While this new tax would provide an additional $48 million in funds each year, it would not cover the $300 million budget gap and would fall heaviest on riders and hurt drivers due to the inevitable decrease in demand (cite).

This is not the first time Philadelphia’s Mayor has implemented a tax in hopes of better supporting different areas in Philadelphia’s public system. The Soda Tax was implemented in 2017 to provide additional funds for the community’s Pre-K, community schools, and parks and recreation departments. Although revenue has been consistently generated since the tax was passed, the numbers have steadily decreased due to reduced consumption and other factors. While revenue has been brought in, it has not been enough to fully fund the intended programs, causing the city to, once again, rely on other revenue sources for long-term support.

Another tax, the Use and Occupancy Tax, is meant to tax businesses in residential buildings at a 1.2% tax rate of the assessed property value to raise funds for local services. While the number of taxes enacted in the city continues to grow, the benefits have not been felt or seen by all Philadelphia residents. In 2022, a survey found that Philadelphia’s lowest-income and African-American residents strongly oppose the tax, as they believe it mostly impacts their communities. In an article from the Philadelphia Citizen, Jeff Brown, owner of a formerly open ShopRite at 67th and Haverford, discussed the impact the store’s closing would have on neighborhood residents, most of whom are carless and rely on his grocery store. There is evidence that this tax benefits the city’s Pre-K program; however, it should not come at the expense of the city’s most vulnerable residents – a sentiment currently echoed regarding the rideshare tax.

A major concern with other city taxes is that they harm those they are meant to serve, as seen with the soda tax. Jeff Brown, owner of the ShopRite on 67th and Haverford, did everything possible after the soda tax was enacted to keep his business running, but when those with cars take their business to stores that do not tax sodas, there is only so much Brown and other business owners could do. This same concern is now being raised about the rideshare tax. In various online communities, residents have expressed their concerns loudly. In a Facebook group called Roxborough Rants & Raves, the over 300 comments under a post asking members’ opinions on the rideshare tax all share the same tone: disappointed, but certainly not surprised. In the r/philly Reddit group, a similar post found even more comments with the same sentiment. It is hard for Philadelphia residents to rally behind yet another tax when they are not sure they will see the benefits. Residents are tired of taxes imposed to help them that end up hurting them the most.

As a teacher in the Philadelphia education system for four years, I can promise that this rideshare tax will not have the intended effects Mayor Parker hopes for. Philadelphia’s education system has so many holes that one singular tax will not fix, and with almost 200,000 students in the School District – many of whom rely on Uber and rideshares to get to and from school – the tax will likely affect these students as it did grocery store owners. Teaching middle schoolers has opened my eyes dramatically to the number of young students who use Uber on a daily/frequent basis; while many of my students may not always use Uber, they often send their younger siblings or cousins in Ubers when they have practices or meetings after school. Parents rely on Ubers when they cannot pick up their children or when SEPTA has significant delays. Many parents and families in the School District are also part of the same demographic most heavily affected by the Soda Tax. This raises the question: what is the purpose of taxes like these if those meant to benefit most are also the most negatively affected by them?

With nearly 30,000 Uber drivers in the city, this tax would not only hurt students but also impact drivers, another group likely to be disproportionately affected. The city needs to consider alternatives to taxing residents to address these budget gaps; while taxes provide revenue, they are insufficient to cover the school district’s current deficit. Whether the city is operating within the definition of insanity or not is unclear, but with so many students, teachers, and families concerned about the potential outcomes of this tax, only time will reveal whether it is truly beneficial or just another initiative intended to support the city, but unfortunately failed to do so.