California Push to Fund EVs Has Lyft Support but Not Newsom

The ballot measure would tax the rich in the state to finance EV chargers.

October 18, 2022

ALEXANDRIA, Va.—A ballot measure in California is seeking to make the wealthiest state residents pay for some of the costs to install electric vehicle chargers, and Lyft is the biggest supporter of the measure, reports the Wall Street Journal. Proposition 30 would impose a 1.75% tax of people who make over $2 million in the state over the next 20 years.

Lyft believes that more money is needed to fund the state’s transition to electric vehicles. In August, the California Air Resources Board enacted a plan requiring all new passenger cars and light trucks sold in the state to be electric vehicles or plug-in electric hybrids by 2035. Currently, 16% of all new car sales in California are zero-emission vehicles.

Governor Gavin Newsom is against the proposition, calling it “a cynical scheme devised by a single corporation to funnel state income tax revenue to their company” on a TV ad. Lyft disagrees, saying the ride-sharing industry would not see any of the tax revenue, and it would instead go to state agencies that are leading the transition to EVs.

According to the California Legislative Analyst’s Office, the measure would generate $100 billion in tax revenue, and 80% would go toward installing charging stations and encouraging residents to buy electric vehicles. The other 20% would be used for fire prevention, since transportation and wildfires account for most of California’s carbon emissions.

“What I see in California scares me,” Lyft co-founder and CEO Logan Green said in a blog post explaining why Lyft is supporting the measure. “This is our new normal: record-setting wildfires plaguing every part of the state, unrelenting drought and extreme heat.”

Lyft would benefit from the proposal because the state is requiring that 90% of ride-share miles be driven by zero-emission vehicles by 2030. Other supporters of the measure include Rivian and electric-scooter company Lime.

Uber is not involved and is focusing on its own efforts to get drivers and riders to make the EV switch. Sixteen percent of Lyft’s total rides in 2019 were in California, while the state was 9% of Uber’s ride and food-delivery orders.

Lyft’s spending on Prop 30 is “kind of like a drop in the bucket” compared with the costs of electrifying its fleet, Robert Mollins told the Journal, an analyst covering the ride-share industry for Gordon Haskett Research Advisors. “It’s going to be a struggle to get electric vehicles in the hands of ride-share workers just because of the affordability,” he said.

Those who oppose the tax, including the governor and the state’s most powerful teachers' union, say there isn’t a need for another tax, as the state is already investing in similar measures. California has dedicated $10 billion over the next six years to install EV chargers and incentivize drivers to switch to electric vehicles.

Lyft and other proponents of the measure say more funds are needed if the state wants to meet its goal of only zero-emission new car sales by 2035. Also, more time and money are needed for the proper infrastructure to be built in low and middle-income communities, they say.

Challenges for California’s ban on gas cars include whether consumers in the state embrace zero-emission vehicles and how quickly vehicle manufacturers can produce these types of vehicles. There are also legal challenges that could hinder the policy, and some experts say these challenges have a chance of success.

What’s more, the EV charging infrastructure in the state can’t currently handle the policy, and researchers at University of California, Davis, estimate that 1.9 million additional public chargers would be needed by 2035.