TechSpot

Massachusetts will tax ride-hailing firms to support taxi businesses

By midian182
Aug 23, 2016
Post New Reply
  1. As ride-hailing apps such as Uber and Lyft become increasingly popular, questions over the role of traditional taxis and their drivers are being raised. The issue has caused problems across the world, leading to protests that can often turn violent, but Massachusetts will use a unique method to placate and assist the taxi industry: make the app companies support it.

    State Governor Charlie Baker has signed a law that will see a 20-cent per trip fee levied on the ride-hailing apps. 5 cents will go toward supporting rival taxi firms, helping them to adopt "new technologies and advanced service, safety and operational capabilities" and to support workforce development.

    As for the remaining 15 cents, ten will go to cities and towns, and the remaining five goes toward a state transportation fund.

    Considering that Uber and Lyft have a combined 2.5 million rides per month in Massachusetts, the fee is likely to raise millions of dollars per year.

    Many of the anti-Uber protests around the world call for the app and its drivers to be banned because they don’t follow the same rules and regulations as taxi businesses. Even with the new law, some Massachusetts taxi drivers continue to feel the same way.

    "They've been breaking the laws that are on the books, that we've been following for many years," Larry Meister, manager of the Boston area's Independent Taxi Operator's Association, told Reuters.

    Precisely how the fee will be collected and what it will be spent on is yet to be determined. The law bars companies from passing on the cost to riders and drivers, though some worry this will still happen.

    Unsurprisingly, the ride-hailing services aren’t happy about the fee. "I don't think we should be in the business of subsidizing potential competitors," said Kirill Evdakov, the chief executive of ride service Fasten.

    The 5-cents will only go toward the taxi industry until 2021. From that point on, the 20-cent fee will be split between cities and the state for the next five years, disappearing completely by the end of 2026.

    Permalink to story.

     
  2. wastedkill

    wastedkill TS Evangelist Posts: 1,389   +329

    So when will valve pay tax to origin to support them?, seems like the law makers are a bit stupid to give money to inferior companies that cba to improve and adapt
     
    dms96960, RebelFlag and Reehahs like this.
  3. p51d007

    p51d007 TS Evangelist Posts: 908   +384

    LOL, never let it be said, that government can't find ways to TAX something.
     
    Timonius, dms96960 and Raoul Duke like this.
  4. davislane1

    davislane1 TS Evangelist Posts: 3,536   +2,333

    So, basically, the taxi companies have pressured the Mass. government to allow theft and the government has given the green light.

    This will also not "disappear" after 2026. Like toll roads, special goods taxes and the like, they will find a reason to extend the law past its expiration date by citing some pressing need, a missed projection, or the good old fashion, "If we get rid of this tax, it will cost the state millions in revenue" line.
     
  5. Tanstar

    Tanstar TS Guru Posts: 407   +88

    "The law bars companies from passing on the cost to riders and drivers, though some worry this will still happen."

    Of course they will. Every industry passes the cost onto the customer. What are they expecting? The companies to operate in the negative?
     
    Raoul Duke, Timonius and dms96960 like this.
  6. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,549   +2,894

    The way of life. When you can't earn a dollar you find a way to take it and call it an earning.
     
    wastedkill, Timonius and dms96960 like this.

Similar Topics

Add New Comment

You need to be a member to leave a comment. Join thousands of tech enthusiasts and participate.
TechSpot Account You may also...