The taxi business has been one sweet gig for corrupt city leaders. Taxis pay enormous fees for medallions in order to be officially licensed. The city, in turn, helps them establish a monopoly so that poor service, high fees and a refusal to go to certain areas of town don’t cost them market share.
Uber and Lyft have challenged this status quo. So what do you do?
How about make them pay blood money to taxi cartel?
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.
Ride services are not enthusiastic about the fee.
“I don’t think we should be in the business of subsidizing potential competitors,” said Kirill Evdakov, the chief executive of Fasten, a ride service that launched in Boston last year and also operates in Austin, Texas.
Some taxi owners wanted the law to go further, perhaps banning the start-up competitors unless they meet the requirements taxis do, such as regular vehicle inspection by the police.
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.
Does anyone, does anyone think this fee will stay at 20 cents a ride? Anyone? In the back there? No? You with the beard? Yeah, didn’t think so.
And that’s a Republican governor who signed this piece of garbage. You almost have to admire the brazenness of it. This isn’t regulating Uber like a taxi service, which you could at least argue levels the playing field (although it really doesn’t). This is forcing an innovator to subsidize their rival. It is as if we’d taxed Netflix and given the money to Blockbuster.