Mayor Cherelle Parker wants to increase her proposed tax on ride-hailing services like Uber and Lyft to $1 per ride to help address the School District of Philadelphia’s $300 million budget deficit.
The $1 fee would be five times the 20-cent-per-ride tax the mayor proposed March 12 in her budget for fiscal year 2027. If approved by Philadelphia City Council, the new tax would go into effect on Jan. 1, six months sooner than originally planned.
“With new data at our fingertips in light of the school district’s $300 million structural deficit,” Parker said, “it was clear that I, as mayor, and the Parker administration, needed to add additional, recurring revenue that the school district could count on in years to come to help it close and eliminate that $300 million deficit.”
Parker claims the new tax would raise approximately $48 million per year for the school district beginning in fiscal year 2028, an increase from the projected $9.6 million in her initial proposal. She said the fee would generate about $24 million for FY27.
Parker says this isn’t a tax on ride-hailing drivers
The mayor said the tax would apply to the companies and not individual drivers, and the proposal is similar to policies in New York City, Washington, D.C., and Chicago.
“I want to be very clear, Philadelphia. I am not, we are not, proposing a tax on ride-share drivers,” Parker said. “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 onto their employees, how about that?”
Jazmin Kay, a spokesperson for Uber, said Parker’s proposed tax would fall on riders and hurt drivers due to a decrease in demand.
“This 400% increase to the additional tax, on top of the existing tax, will be passed on directly to riders who will pay more on each ride and will directly hurt hardworking drivers who will see their incomes cut as a result of reduced demand for rides,” Kay said. “This means it will cost more to get around in Philly and will cost more for residents to get to their jobs, doctors’ appointments, schools, and more.”
Lyft did not immediately respond for comment when reached by CBS News Philadelphia.
Ride-hail tax would help save teachers’ jobs, Parker says
The announcement comes after the Philadelphia School District announced earlier this month plans to cover the gap that included stopping hiring for some unfilled positions, reducing contracts and eliminating some substitute positions.
The district said the budget cuts were intended to eliminate the deficit by the 2029-30 school year. District officials also revised their initial facilities master plan to close 18 schools rather than the initial 20.
The Parker administration said the additional funding would allow the school district to restore about 240 jobs, including about 130 teachers, 55 student climate staff and 55 other school-based positions. Â
“This infusion of new revenue will stop the elimination of jobs and the jeopardizing of our children’s progress here in the city of Philadelphia,” Parker said.
The mayor said that without the additional funding, class sizes in Philadelphia public schools would also likely increase, which she said increases the risk of school safety issues.
“This is the part that bothered me the most, well, one of the most challenging things that I heard overall, and this is the potential for class sizes to go up,” Parker said. “If you look at the major difference between the schools in the city of Philadelphia and you compare us to schools in the suburbs or on the Main Line, one of the first things that you observe is smaller class sizes when you get to the suburbs or other wealthier communities. That’s not a risk that I’m willing to take.”
Philadelphia City Council to begin hearings Tuesday
City council will begin hearings on Parker’s proposed 2027 budget Tuesday morning. Councilmembers have until June 30 to approve it.
Councilmember Rue Landau, in a statement, touted Parker’s plan to use a ride-hailing tax to help fund Philadelphia public schools.
“Every day, rideshare and delivery platforms move thousands of people and goods across Philadelphia. These services benefit from our streets, our infrastructure, and the vibrant neighborhoods that make our city thrive,” Landau said. “Philadelphia has always embraced innovation, and that innovation comes with a responsibility to contribute to the communities that make it possible.”
The mayor said they’re also looking to provide free SEPTA passes for school district employees.
Parker’s proposal also includes a three-year pilot program that would see grants being used to help Philadelphia residents in need “pay down outstanding balances, have late fees waived, restore their driving privileges and reconnect to work and opportunity,” according to a news release.
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