In unprecedented legislation, Massachusetts will tax ride-sharing services and reimburse the taxi industry
Massachusetts Governor Charlie Baker recently enacted a law (the first known in the U.S.) that will charge ride-sharing services a twenty-cent fee for subsidizing transportation infrastructure, five cents of which will go to the taxi industry, according to a recent article, meaning that every Lyft or Uber hailed will directly fund the taxis they're competing against.
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Officials still have to hash out the finer details, such as how they'll collect the fee and spend it, but the legislation prevents companies from tacking it on to the fare.
A Reuters article notes that ride-sharing firms aren't completely against the measure but the some taxi businesses don't feel it goes far enough, with the Boston's Taxi Operators Association preferring an outright ban on any ride-sharing firm that doesn't follow the same rules that taxis do. As such, it's more of a compromise than a flat-out victory for the incumbents. The bill also mandates ride-sharing drivers must have background checks and will allow pickups from Boston's main convention centers and the airport.
Although the law could improve the overall quality of taxi service, it's still protecting one industry at the expense of another. Additionally, while well-heeled companies like Lyft and Uber can afford to soak up the costs, it's more daunting for smaller startups that now have to factor that cost into into their business models.
Governor Charlie Baker on Friday will sign landmark legislation regulating ride-hailing services like Uber and Lyft, mandating driver background checks, allowing pickups from Boston’s main convention center and airport, and bringing Massachusetts in line with the 34 other states that have passed comprehensive oversight for the booming new industry.
The move was praised by both the ride-hailing industry and taxi owners. A Lyft spokesman said, “We applaud Governor Baker for signing this common-sense legislation, which sets high safety standards while supporting consumer choice and innovation.”