Proposition 30 Explained: Lyft vs. Gavin Newsom

In the fall of 2021, Stuart Cohen and Denny Zane have pretty much given up.

Two California public transit advocates have spent about a year trying to raise money for a state ballot measure that would subsidize electric vehicles and wildfire prevention by raising taxes on California’s millionaires. They held a series of symposia with environmentalists and scientists who helped shape the idea. And they reached out to Meta, Uber and “all the biggest tech companies in the Bay Area, except for Apple,” Cohen said, to see if they could throw money at the effort.

No one bit, and by September 2021 they still hadn’t raised the millions of dollars they needed to start collecting signatures. “We mostly left it for dead,” Cohen said.

But the measure, now known as Proposition 30 on the Nov. 8 ballot, did not die. He was saved by Lyft, which spent more than $45 million on the Prop campaign. 30 and is now by far her biggest supporter – and her biggest responsibility.

During the last two months, the fight for Prop. 30 turned ugly, with opponents — including California Gov. Gavin Newsom himself — calling the measure a self-serving conspiracy “concocted” by Lyft and a write-off of early public interest work. groups almost entirely. “When Newsom came out, I jumped back,” Cohen said. “I wanted to help tell the truth.

It was predictable that a proposal to raise taxes in an already high tax state would lead to a frenzy. But the battle lines of the struggle were anything but. The measure divided the loyalties of the tech industry and put Newsom on the opposite side of the California Democratic Party and many of its allies. In this bizarre world, Newsom and the teachers union have teamed up with trade groups like the Chamber of Commerce and a whole bunch of billionaires to oppose what they see as corporate rip-offs, while environmentalists, unions and public interest groups line up to defend the huge of Lyft’s political spending. Uber, which is often politically aligned with Lyft and benefits from the measure as much as Lyft, has stayed out of the fray entirely.

Each side accuses the other of putting pecuniary interests ahead of the best interests of the state. The No campaign — backed by Netflix’s Reed Hastings and Sequoia’s Michael Moritz — used Prop. 30 as a maneuver to help Lyft transition to EVs ahead of the government’s 2030 deadline. “There’s zero chance this would be on the ballot without Lyft,” Dan Newman, a campaign strategist for Newsom and the No.

On the other hand, supporters of Prop. 30 accuse Newsom of spreading misinformation about the origin of the measure and oppose him to appease his biggest donors and prime the pump for a potential presidential run. “When he says Prop. 30 was designed by a single corporation, I know that’s not true,” said Max Baumhefner, a senior attorney at the Natural Resources Defense Council. “I was one of the people who helped write it, among many.

When he says that Prop. 30 was invented by a single corporation, I know that is not true.

So far, the No campaign’s anti-technology strategy seems to be working. Since Newsom cut an ad in September labeling Prop. 30 for a “Trojan horse” for Lyft, support for the measure plummeted from 63% in July to 41% in a poll released this week. “People believed it,” Cohen said of the points the opposition made. “So I recommitted to telling the origin story, but it was a little late.

Carrots and sticks

When Cohen and Zane walked away from what was to become Prop. in the fall of 2021. 30, they left it in the hands of Nick Josefowitz, SPUR Group’s chief policy officer, who worked with them to develop the measure. Josefowitz, who happens to be married to Lyft’s former VP of Product, is connected to Lyft CEO Logan Green through a mutual friend. In September 2021, with other options exhausted, Josefowitz called Green to see if Lyft could contribute. It wasn’t an immediate yes, but Josefowitz said Green was excited about the potential impact of Prop. 30 on the environment.

Of course, it also had a huge advantage for Lyft. Months earlier, California adopted its new Clean Miles Standard, which requires ride-sharing companies across California to ensure that electric vehicles account for 90% of their vehicle miles by 2030. That means ride-sharing companies will have to find ways to entice their drivers to go electric. Lyft has been trying to get the California Air Resources Board to create new incentives for electric cars to comply with the standard. But ultimately, in comments to the board, Lyft said regulators ended up offering only “metaphorical sticks without carrots.”

Then came Prop. 30, which is basically a carrot. The measure would raise taxes by 1.75% for about 35,000 Californians with annual incomes above $2 million, and would use most of the money to offer rebates for new EV purchases and investments in charging infrastructure. The measure places particular emphasis on people from disadvantaged communities, with the aim of subsidizing electric cars for people who would otherwise not be able to afford them. That includes a lot of Lyft drivers.

Josefowitz said he and Lyft officials continued to talk over the following months, and in January Lyft made its first of many campaign contributions. “I don’t think we ever knew how much Lyft was planning to invest,” Josefowitz said. “We took it one step at a time.

Lyft declined to comment for this story and directed the Protocol to a company blog post by Green, in which he wrote in underlined text, “Not a single dollar from Proposition 30 is earmarked for Lyft or the ridesharing industry as a whole. Rideshare drivers will be eligible just like ALL Californians, but will not receive any priority or preference.”

Lawyers and policy experts for Lyft were at the table in the fall of 2021 when the measure was proposed, but so were environmental groups like the NRDC, the Coalition for Clean Air and California Environmental Voters. “If Prop. 30 was what the billionaires funding the opposition say it is, then we wouldn’t support it,” Baumhefner said, noting that Lyft drivers make up a tiny fraction of all Californians benefiting from the measure. . According to the state of California’s own estimates, ride-sharing companies like Lyft and Uber together account for only about 1.25% of annual miles driven.

Critics of Lyft point to a provision in the measure that says people who drive “more than 25,000 miles per year on average” should be prioritized for discounts as evidence of Lyft’s footprint on Prop. 30. However, Baumhefner argues that this is a common sense requirement if the ultimate goal is to reduce emissions. “It makes sense to go after vehicles that drive a lot,” he said.

For a while it looked like a Yes campaign. The measure won unanimous support at the California Democratic Executive Board meeting in July, and the campaign, which briefed the governor’s office on its work, held out hope that Newsom would support the measure. “It seemed to me like it was exactly the kind of thing to get a climate champion, a progressive Democrat like the governor. Newsom is really excited,” Josefowitz said.

“cynical scheme”

Then, in July, when the measure qualified for the ballot and donations began pouring into the No campaign, everything changed. That month, Newsom issued a press release formally opposing the measure, along with the California Teachers Association, which did not like that the measure did not guarantee any school funding. Newsom called the measure “a special interest exemption — a cynical scheme designed by a single corporation to divert state income tax revenue to their company.”

Newsom’s public opposition to Prop. 30 only grew from there. In mid-September, he appeared in a national television ad against Prop. 30, doubled down on the message and dealt a major blow to the Yes campaign. The ad came amid a much broader tech push by Newsom, who once enjoyed a cozy relationship with the industry.

At the same time, Newsom was just days away from signing a bold $54 billion climate action plan, legislation that proves “there’s a much better, more thoughtful way” to invest in the climate, Newman said. “We all agree that we need to do more to combat climate change,” he said. “The question is: Can we do this without raising taxes and letting one corporation push its own public policy?”

But if Lyft’s contributions to the Yes campaign fueled speculation about the hidden agenda of Prop. 30, the No campaign’s long list of billionaire backers has similarly raised questions about Newsom’s motives.

Campaign finance records show that Newsom has raised millions of dollars from people who also threw their money into the No campaign. Hastings, who spent $1 million fighting Prop. 30, also contributed $3 million to help Newsom fight the recall last year and continued to donate to the governor’s re-election campaign this year. Zynga founder Mark Pincus has spent nearly half a million on the No campaign and is also supporting Newsom’s gubernatorial race. Other No campaign backers who contributed to Newsom’s re-election include Sierra Pacific Industries, Gap heirs William and Robert Fisher and Democratic megadonor Mark Heising.

SAN FRANCISCO, CALIFORNIA - OCTOBER 06: (L-R) California Governor Gavin Newsom speaks during a press conference on October 06, 2022 in San Francisco, California.  California Governor Gavin Newsom was joined by the Governors of Washington, Oregon and the Premier of British Columbia to sign a new climate agreement to further expand the region's climate partnership.  (Photo: Justin Sullivan/Getty Images)California Governor Gavin Newsom

Photo: Justin Sullivan/Getty Images

Newman called the idea that the governor is influenced by donors “beyond absurd,” pointing to other Newsom supporters, including Ron Conway and Lyft itself, who are funding the Yes campaign. “I suppose the charge would come if he supported it as well,” Newman said. They argue that Lyft’s attempt to pose as a climate advocate is disingenuous, especially since the company backed down on previous efforts to force ride-sharing companies to go electric. “This timeline proves that they only care about their profits,” Newman said. “Support. 30 is by Lyft and for Lyft.”

While the No campaign took on an anti-tech flavor, many of the billionaires who funded it actually made their money in tech. That list includes Hastings and Pincus, but also tech investor Arthur Rock, Activision Blizzard CEO Bobby Kotick, Intuit co-founder Scott Cook and Sequoia’s Moritz. In a recent op-ed in the Financial Times, Moritz referred to Prop. 30 as “helping out Lyft” and warned that it could lead to business leaders leaving California for lower-tax states. “Governors Ron DeSantis of Florida and Greg Abbott of Texas will be hoping that Lyft’s tax rescue is successful,” the chief operating officer said.

No one in the Yes campaign is disputing the fact that without the Lyft funding, there would be no Prop. 30. What they refute — emphatically — is the idea that the measure was “invented” by Lyft and not by transit and climate advocates who claim it was their brainchild. “It would be fair to say that one company is funding it. That’s true,” Cohen said. “But [the opposition] he says it was a scheme concocted by a single corporation. That’s the difference between misinformation and information.”

When asked to clarify whether the No campaign had any other evidence to suggest that Prop. 30 comes from Lyft, Newman responded, “It’s about money.”

If Prop. 30 will help Lyft in some way, the dozens of climate, health, and public interest groups that have come forward don’t seem to mind. The No campaign, on the other hand, does not have such institutional support from climate advocates.

And yet it is the No party that is winning over voters by the day, making the cash infusion from Lyft – once the salvation of the 30th prop – the biggest threat. “The easiest way to peel off progressives is to say it’s all a plan by one corporation,” Cohen said. “If they really focused on the measure, there are no compelling arguments that would peel off progressives and Democrats. Not taxing millionaires? Are you not cleaning the air? Not giving incentives to low income people? None of it works.”

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