Philadelphia Mayor Cherelle Parker is proposing a substantial increase to Philadelphia’s ride-share tax, moving from 20 cents to $1 per trip, as part of her budget plan to help close the School District of Philadelphia’s $300 million structural deficit.

If approved by Philadelphia City Council, the new tax would go into effect on Jan. 1, 2027, six months sooner than originally scheduled.

According to a CBS Philadelphia report, the tax would apply to all Uber and Lyft ride-sharing companies within city limits. It would raise approximately $48 million per year for the school district beginning in fiscal year 2028, an increase from the $9.6 million she projected in her original budget proposal. Parker said the fee would contribute approximately $24 million for FY27.

Parker was quick to point out that the tax would not target individual drivers.

“I want to be very clear, Philadelphia. I am not, we are not, proposing a tax on ride-share drivers,” Parker said in a statement during a media announcement. “Those companies can make a decision about whether or not they pass this cost onto those hardworking folks. Or guess what they have the option to do — I’m going to shock you — guess what they can do? They can decide to pay the tax and not pass it on to their employees. How about that?”

City Council must approve Parker’s proposal as part of the Fiscal Year 2027 budget by the end of June.

Spokespeople for Uber and Lyft both said their respective companies would hurt riders and drivers in the long run.

FOX29 News reported on Monday, March 23, that the School District of Philadelphia is facing a $300 million deficit following the expiration of federal COVID relief funds. If the district does not receive new sources of funding, it plans to cut approximately 340 school-based staff, including teachers and counselors. 

Along with the proposed ride-share tax, the district plans to eliminate approximately $225 million in operating costs as part of a concentrated effort to close the deficit by the 2029-2030 school year.

Additionally, a portion of the revenue would support free SEPTA passes for eligible school employees and help residents address driver’s license suspensions resulting from unpaid parking tickets.