New Philadelphia Tax Could Raise Uber, Lyft, and Delivery Prices: Who Pays More?

Could Philadelphia’s proposed tax on rides and deliveries set a example for cities nationwide? When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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And as you might expect, the proposal is already 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 like Amazon and Gopuff.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail."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. And though seemingly small, could those fees start to add up for consumers?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.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.Philadelphia’s proposal also targets retail deliveries with a 25‑cent per‑order charge.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–$30 or more added to their annual bills.Proponents argue that ride-share and delivery services place unique strains on city roads and public services. So, 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.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. 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.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has helped taxpayers make sense of shifting U.S. tax law and policy from the Affordable Care Act (ACA) and the Tax Cuts and Jobs Act (TCJA), to SECURE 2.0, the Inflation Reduction Act, and most recently, the 2025 “Big, Beautiful Bill.” She has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and energy tax credits. Her award‑winning work has been featured in numerous national and specialty publications.