San Francisco’s ‘homeless tax’ helps spur departure of another high-profile company

Will Uber be the next tech company to bail on San Francisco? (WikiMedia image)

Less than a year after losing by far its biggest-grossing company to Texas – the pharmaceutical giant McKesson Corp. – San Francisco is losing another high-profile firm. Stripe, a financial software company that is the second-highest valued start-up in the U.S., is moving to South San Francisco.

Both McKesson and Stripe were unhappy with Measure C, the “homeless tax” approved by San Francisco voters last November that requires companies based in the city, which have more than $50 million in annual revenue, to pay a levy based on their gross receipts. McKesson moved to Irving, a suburb of Dallas, which has no such tax and much lower overall corporate taxes. While South San Francisco is not as cheap as Irving, it doesn’t have anything akin to San Francisco’s tax, which has helped the city attract many tech firms, in particular biotech giant Genentech.

“Unfortunately, Stripe choosing to leave town is not an anomaly,” Alex Tourk, spokesman for the sf.citi tech trade group, told the San Francisco Chronicle. He said the business community needed to “work together [to] … establish a fair and equitable tax system that we can all rely on.”

But as the fight over Measure C reflected, there is a huge split among San Francisco tech firms. Marc Benioff – the billionaire chief executive of Salesforce, the city’s largest employer – and company employees provided millions in funding to the pro-C campaign. Benioff has disparaged tech firms which balked at the measure and appears open to even more tax measures to deal with San Francisco’s homeless crisis.

“This is a humanitarian emergency and it demands an emergency response,” Benioff wrote last year in an op-ed in The New York Times.

Uber moving entire departments to Dallas

But will more tax hikes be accepted by Uber, one of the city’s most prominent and famous start-ups? Uber was neutral on Measure C. And in a move with parallels to the actions of McKesson before it moved out, Uber announced in August that it was setting up a “second headquarters” with 3,000 employees in Dallas after being wooed for years by city leaders, who provided $36 million in incentives and tax credits.

“Dallas became the first city in Texas where the Uber app was available in 2012, and since then Texas has been a hub of innovation for our platform,” Dara Khosrowshahi, CEO of Uber, said in the company’s announcement. “Uber is excited to bring this major investment to Texas and to increase our commitment to the city of Dallas.”

Yet Uber officials said that too much should not be read into its decision and that San Francisco would remain its headquarters. Uber said there was no change in its plan to move into 500,000 square feet of new office space at the huge, high-tech new Chase Center next year.

Nevertheless, the Dallas Business Times reported that Uber was moving entire departments to Dallas, including the Uber Eats team, and its legal, human resources, recruiting, finance and business development units.

That’s similar to what McKesson did before it confirmed it was leaving San Francisco permanently.

Uber has an even stronger motive to leave than McKesson or Stripe, which are considered healthy companies. Uber lost $5.2 billion in the second quarter of 2019, the company announced in August. Its stock price is down about one-third since then, and analysts are mixed about its future.

7 comments

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  1. Ulysses Uhaul
    Ulysses Uhaul 1 November, 2019, 17:21

    Nah….we will gut it out by running really lean and mean, no pajama boy frills just knock down old fashioned service, siffeee trailers and strong drinks in our utilitarian basic comfort bunker…

    Reply this comment
    • T TTT Ted Steele, Mentor
      T TTT Ted Steele, Mentor 5 November, 2019, 17:47

      Yes P and S !

      As we control the means of production we will need the slack jawed toothless trumpaloopas to work the docks– grains, minerals, tailings from Adelanto— all busy– all the time….

      Reply this comment
  2. Richard Rider
    Richard Rider 1 November, 2019, 22:57

    One reason to flee the city/county of San Francisco is that the city has its own INCOME TAX. Everyone who lives OR works in the city pays a 1.5% income tax on all earnings. Given the city’s progressive mindset, it’s likely that this tax will rise over time.

    Just to be clear: “South San Francisco” is NOT in the city/county of San Francisco.

    Reply this comment
    • T TTT Ted Steele, Mentor
      T TTT Ted Steele, Mentor 5 November, 2019, 17:43

      It’s worth it to live in California and the bay area in particular—–Texas? YIKES — no way

      I’m glad the slackers are moving out!

      Reply this comment
      • Timothy P Ward
        Timothy P Ward 12 November, 2019, 13:29

        Why, specifically, do you refer to yourself as “mentor”.
        Also, I-80 Will take you back to whatever state you came from.
        Keep it in mind…

        Reply this comment
  3. Edward Ryan
    Edward Ryan 9 November, 2019, 18:21

    Edward Ryan
    Edward Ryan8 November, 2019, 12:26
    I’d like to comment on corruption by the California Attorney General’s failure to investigate a formal 75 page complaint on the LAPD Crime-buster Vigilante Facebook scandal matter. This is a serious matter as the Los Angeles criminal justice system skews when it comes to fair justice for all as LA homeless are attacked by LAPD supported vigilantes, then arrested and jailed if the try to fight back in self- defense. Now there is proof of “jury trial rigging “by LA Prosecutor and LAPD Slo for Topanga. Both are members of the secret vigilante Facebook group, and 2 other Vigilante group members as witnesses for a bogus littering trial where Van Nuys Judge Harmond seems to play along by issuing an extreme sentence. LAPD command now spreads disinformation saying LAPD members only posted insults to homeless when the truth is LAPD supplied tracking and other info to vigilante members. The info was used to do violent crimes and community terror stalking onto targeted homeless victims. A homeless advocate and activist for LA political reform was harassed then convicted and incarcerated for months when he was attacked on 12/29/16 in Van Nuys by the same LAPD crew. False police reports were used and judge Mulcahy Van Nuys court prevented the mentioning of vigilante abuse at trial. This happened to Ed Ryan [email protected] who had to flee LA after release because of more vigilante harassment by LAPD connected crews. Ryan’s jaw was smashed by a vigilante attacker wielding a hammer and LAPD refuse to take his complaint and investigate. Ryan now lives in Mass as LA Court court issued a probation violation warrant to further silence him. LA superior Court Presiding Judge, Kevin Brazile has so far ignored Ryan’s comprehensive complaint. Ryan challenges reporters to read the 8/1/18 complaint to Atty Gen Becerra that has plenty of screen shots of captured vigilante and LAPD postings to surely warrant the Cal AG to investigate, but he remains silent on the issue. Also remaining totally silent on this atre LA Mayor Garcetti I’d like to discuss Corruption in Los Angeles as the LAPD Crime-buster vigilante Scandal is being ignored and all LA city Councilors. LA City Atty Furey also is silent even though his long time Deputy Karin Philips is involved and is being reported to Cal BBO flor ethical violations of not disclosing vigilante group membership by entire prosecution team in People v Kevin Perelman , the van Nuys Superior Court jury trial in front of LA Superior Court Harmond that was rigged Atty Philips and LAPD SLO Dines

    Reply this comment
    • ricky smith
      ricky smith 11 November, 2019, 08:20

      Off topic.
      Besides looking at the mayhem and chaos on the streets these days, maybe its time for a little vigilante action.

      Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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