Rideshare tax proposed to close budget deficit for Philadelphia schools

PHILADELPHIA (WPVI) — Mayor Cherelle Parker announced an updated proposal Monday to increase taxes on rideshare companies, a move city officials say could generate millions of dollars for Philadelphia’s public schools.

But it’s already drawing opposition from rideshare companies and riders.

Speaking at the Delaplaine McDaniel School in Point Breeze and surrounded by students and supporters, Parker proposed adding $1 to every rideshare trip in the city. The measure would increase fivefold. A 20-cent-per-ride tax was previously proposed to City Council on March 12.

Parker said the higher tax was necessary after the full scope of the School District of Philadelphia’s financial challenges became clearer.

“With new data at our fingertips, in light of the school district’s $300 million structural deficit, it was clear that I, as mayor, and the Parker administration needed to add additional recurring revenue,” Parker said.

The school district is facing a major budget shortfall after the loss of federal COVID-19 relief funding. District leaders had proposed laying off 340 teachers, counselors and other staff as part of an effort to reduce the deficit. City officials said the revised rideshare tax is expected to raise about $48 million a year, which could allow the district to retain roughly 200 of those positions if City Council approves the plan.

Some council members signaled early support while urging caution.

“I think it’s a good idea to find new revenue for the schools. I also think we have to be sensitive to taxes that will fall on our consumers,” said Councilmember Jamie Gauthier.

“I’m encouraged to see this proposal as part of the mayor’s budget, especially as we look for responsible ways to support our public schools,” added Councilmember Rue Landau in a statement. “I look forward to working with my colleagues and the administration to craft policy that is fair, thoughtful, and delivers real benefits for Philadelphia.”

Parker and other leaders also urged rideshare companies not to pass the cost of the tax on to riders and drivers.

“It is their choice whether our families carry this burden, or they make an investment in our city,” said Donna Cooper of Children First.

Shortly after the announcement, Uber emailed customers slamming the tax proposal, calling it a double tax and saying it would pass the cost along to the consumer.

Lyft also released a statement saying the tax would increase the cost of its services.

“Philadelphia is already facing mounting cost-of-living and mobility challenges, and this proposal would intensify both by increasing the price of everyday rides that many working residents rely on to get where they need to go,” the statement said.

The proposal would require approval from City Council and would not take effect until Jan. 1.

City officials emphasized that the funding would help address the district’s budget deficit and prevent layoffs, but would not stop the planned closure of more than a dozen schools.