New Philadelphia Tax Could Increase Uber, Lyft and Delivery Prices: Who Pays More?
Could Philadelphia’s proposed tax on rides and deliveries set an example for cities nationwide?
Philadelphia’s mayor is proposing new taxes on everyday services that could affect how much residents pay for ride-shares and online deliveries. As you might expect, the proposal is sparking debate among city officials, companies, and residents.
Under the $6.97 billion FY27 city budget proposal introduced by Mayor Cherelle Parker, Philadelphia would add a 20‑cent fee to every Uber and Lyft trip that starts in the city.
The city would also impose a 25‑cent fee on many retail delivery orders from platforms such as Amazon and Gopuff.
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"I don’t take lightly any proposal to raise any tax or fee. We’ve taken VERY few such actions during my first two years in office. And, these proposed taxes will be paid by companies doing business in Philadelphia," Parker said during a budget address before the City Council.
The idea is that the charges are meant to be a business tax rather than a direct tax on residents. Officials say the charges are intended to raise revenue for schools, street repairs and other services without hiking property taxes or other tax rates.
Even so, if approved, the taxes might show up on app receipts, making them part of everyday budgeting. Though seemingly small, could those fees start to add up for consumers?
Philly could add fees to rideshare and delivery orders
The proposed 20‑cent per‑ride fee would apply to ride-share trips that originate in Philadelphia, including those booked through Uber and Lyft. According to city estimates, the fee could bring in around $9 million annually.
- While $9 million may seem substantial on paper, it is a small slice of the city’s overall budget.
- Proponents say it would likely add only a few dollars per month to frequent riders' bills.
- For a commuter who takes five rideshares a week, the extra 20 cents per trip could add up to approximately $52 a year.
Some Philadelphia residents on social media argue that the revenue from these fees, combined with the delivery tax, isn’t enough to fundamentally change major transit funding. But some think that the taxes could make a modest difference for local street repairs and school support.
But not everyone is convinced the fees won’t affect riders. An Uber spokesperson, Jazmin Kay, reportedly told Axios that the proposed ride-sharing fee would likely lead to higher costs for riders using the popular app.
"This additional tax, on top of the existing tax, will be passed on directly to riders who will pay more on each ride," she said.
Retail deliveries: New 25 cents per order fee?
Philadelphia’s proposal also targets retail deliveries with a 25‑cent per‑order charge.
- If approved, that fee would apply to online purchases delivered to homes.
- City officials have crafted exemptions for certain essential items, including groceries, baby products and medications.
- Companies with fewer than 1,000 transactions per year in the city would be exempt, according to state officials.
City projections suggest the delivery fee could generate about $15 million per year. That's more than the rideshare charge, mainly because of the sheer volume of packages and food orders delivered across the city each week.
For consumers, those seemingly small charges can add up quickly, especially if companies pass the cost on.
For example, households placing two to three orders a week — from packages to prepared meals — could see an extra $25 to $30 or more added to their annual bills.
Why Philadelphia is targeting gig services and hotel taxes
Proponents argue that ride-share and delivery services place unique strains on city roads and public services. Small per‑transaction fees are seen as a way to have companies internalize part of that cost.
The delivery fee also fits into a somewhat broader national pattern. Some other states and localities have been experimenting with new levies to support public services.
- For example, a $1 retail delivery fee proposed at the state level in Pennsylvania would generate far larger sums if adopted statewide.
- Philadelphia’s version would be a lower amount and be city‑specific.
- Colorado and Minnesota have also implemented state-level delivery fees.
The mayor also wants to seek approval for a 2% increase in the hotel tax. Parker's estimates suggest such an increase could generate $20 million in revenue to combat homelessness in the city.
What happens next? The package moves to the Philadelphia City Council, where lawmakers will debate, amend, and ultimately vote on the plan. The Council has until June 30 to approve a final budget.
If passed, the ride-share and delivery fees would likely take effect in the City of Brotherly Love in 2027, meaning residents could see them in their apps next year.
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