Massachusetts to Tax Uber to Subsidize Taxis

Posted: Aug 26, 2016 7:35 AM

Well this is absurd: Massachusetts is planning on taxing ride-sharing services like Uber in order to bail out...the taxi industry. This is the first tax of this kind in the country. Taxis are upset that ride-sharing services don't follow the same rules as the taxi industry (which makes sense, given that...they're not taxis.)

From Reuters:

Massachusetts is preparing to levy a 5-cent fee per trip on ride-hailing apps such as Uber and Lyft and spend the money on the traditional taxi industry, a subsidy that appears to be the first of its kind in the United States.

Republican Governor Charlie Baker signed the nickel fee into law this month as part of a sweeping package of regulations for the industry.


The law levies a 20-cent fee in all, with 5 cents for taxis, 10 cents going to cities and towns and the final 5 cents designated for a state transportation fund.

The fee may raise millions of dollars a year because Lyft and Uber alone have a combined 2.5 million rides per month in Massachusetts.

The law says the money will help taxi businesses to adopt "new technologies and advanced service, safety and operational capabilities" and to support workforce development.

This is absurd. Given that the cars used by ride-sharing drivers are either owned or leased by said drivers, they do have to go through the same regulations as taxis and pass state inspections. In Massachusetts, vehicles are inspected yearly--it's not legal to drive a car without an inspection sticker. Uber should not be punished for figuring out how to connect drivers and riders via a mobile phone app before the traditional taxi industry did--and that's effectively what this tax seeks to do.

This tax is the equivalent of charging extra for lightbulbs in order to bail out the candlestick makers. Technology adapts and moves on, and it's not the government's role to prop up outdated industries. Taxis should take steps on their own to keep up with a competing industry.