California voters rejected a plan to make electric vehicles more affordable for some residents, dealing a blow to both Lyft and the electric vehicle industry.
Prop 30 would have taxed residents making more than $2 million a year to subsidize electric cars and public charging stations, as well as funded wildfire prevention programs. Even with only 41% of the votes counted so far, the defeat was clear. Starting Wednesday afternoon, about 59% of voters rejected the proposal.
The measure’s defeat comes as several states prepare to ban gasoline-powered vehicles in an urgent effort to reduce climate pollution.
The main sponsor of Prop. 30 was Lyft, which paid more than $48 million to support possible estate tax. Opponents of the measure, which included Democratic Gov. Gavin Newsom and venture capitalists Michael Moritz and Ron Conway, called Prop. 30 a “Lyft rip-off,” calling it a “plan to further line the pockets of billionaires.” Silicon Valley techies.
However, Prop. 30 did not include exceptions for rideshare companies. It would have raised tens of billions of dollars to drive down the price of electric cars for people, including drivers for ride-hailing apps like Lyft and Uber. Both companies have committed to going electric by 2030, and this move could have helped them reach their goals.
Earlier this year, California mandated that nearly all carpools be electric by 2030, as part of a broader effort to phase combustion engines off the road. Although the state already operates some programs to help cover the cost of electricity, Prop. 30 could have provided more assistance. Without it, travel app companies may be forced to shell out additional money, one way or another, to incentivize their drivers to switch, to comply with the state mandate.
Although more affordable options are gradually coming to market, electric vehicles are still generally in short supply and most are too expensive up front for most people. This is not good for the climate, because light vehicles like cars and SUVs account for more than half of transportation-related emissions in the US, according to the EPA.
On the Nasdaq, Lyft closed at $10.64, down nearly 2.4% from the day before. The drop pales in comparison to the nosedive Lyft shareholders suffered on Monday, after revealing steep losses in its latest quarterly report. Earlier this month, Lyft laid off 683 employees, or about 13% of its workforce.