New Massachusetts Law Hands Part of Uber Fare to Cab Companies

Steph Willems
by Steph Willems
new massachusetts law hands part of uber fare to cab companies

From the everyone’s a winner! file comes this story. Soon, whenever a Massachusetts resident hails an Uber, the state will hand part of their fare to their direct competition.

Reuters reports that Massachusetts lawmakers are poised to levy a five-cent-per-trip levy on ride-hailing apps like Uber and Lyft — a new corporate welfare initiative that is the first of its kind in the U.S.

Ride-hailing apps like Uber are the nemesis of taxi companies, which operate via a long-standing but inflexible business model. Cities that consider legalizing ride-hailing apps face widespread protests from cabbies, including Toronto, where one cabbie felt like going for a ride on the outside of an Uber sedan.

Often, the go-to plan is to simply regulate the ride-sharing apps out of business. We’re looking at you, Austin, Texas. In Massachusetts, the solution to avoid being seen as a modern, progressive state that shuns new technology and societal trends is to simply tax the new business (so no others suffer). It’s akin to placing a levy on Big Macs to keep the Home of the Whopper™ in business.

Massachusetts governor Charlie Baker signed the levy into law this month, part of a broader package of laws aimed at the ride-hailing. The levy goes beyond just propping up Uber’s competitors. One-quarter of the total levy goes to taxi companies, another quarter goes to the state transportation fund, and half goes to the municipalities.

Naturally, how the state’s portion will be spent hasn’t yet been decided on.

As you might expect, Uber and Lyft drivers aren’t happy about this. Kirill Evdakov, CEO of Boston (and Austin) ride-hailing service Fasten, told Reuters that he doesn’t think operators like himself “should be in the business of subsidizing potential competitors.”

Taxi companies approve of the new laws, though many feel they don’t go far enough. Their default position is that Uber and other such companies operate outside of the law, and should face severe scrutiny from law enforcement and regulators.

The state claims riders won’t see a bump in fees, as the law requires companies to pay the government directly, not through drivers or passengers. Of course, many feel that the cost will surely be passed down to customers. The taxi subsidy part of the fee runs through 2021, after which the 20-cent levy will be split between the state and municipalities until the levy disappears in 2026.

[Image: Jason Tester Guerrilla Futures/ Flickr]

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  • PwrdbyM PwrdbyM on Aug 23, 2016

    I get tired of taxi companies protesting Uber. The market is speaking in terms of transportation. Maybe if the cab companies provided a better service people would use them. Customers are making the choice but then govt has to step into the mix. I'm pretty sure when I buy a sandwich at Panera I don't have to contribute a nickel to the struggling McDonalds across the street because they provide a substandard service.

    • Art Vandelay Art Vandelay on Aug 23, 2016

      Pretty sure McDonalds is doing just fine. If anyone needs propping up in that sector at this point it is probably that trendy Chipotle joint on the corner. 1/4 the fat of a Big Mac with twice the EColi as a bonus!

  • Kosmo Kosmo on Aug 24, 2016

    How many taxes do we need? Just one more! Uber should deliver this monthly, IN NICKELS!

  • Scott ?Wonder what Toyota will be using when they enter the market?
  • Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
  • Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...
  • Greg Add me to the list: 2017 Sorento EX AWD w/2.0 Turbo GDI 68K miles. Changed oil religiously with only synthetic. Checked oil level before a rare long road trip and Ievel was at least 2 quarts down. That was less than 6 months after the last oil change. I'm now adding a quart of oil every 1000 miles and checking every 500 miles because I read reports that the oil usage gets worse. Too bad, really like the 2023 Tuscon. But I have not seen Hyundai/Kia doing anything new in terms of engine development. Therefore, I have to suspect that I will ony become a victim of a fatally flawed engine development program if I were to a purchase another Kia/Hyundai.
  • Craiger 1970s Battlestar Galactica Cylon face.