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Massachusetts Will Tax Ride-Sharing Companies To Subsidize Taxis (reuters.com) 445

Massachusetts will tax ride-sharing services -- 20 cents for each ride -- with 25% of the money raised going into a special fund for the taxi industry (according to an article shared by schwit1 ). Reuters reports: 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 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 5-cent fee will be collected through the end of 2021. Then the taxi subsidy will disappear and the 20 cents will be split by localities and the state for five years. The whole fee will go away at the end of 2026.

Republican Governor Charlie Baker signed the law, which specifically bans ride-sharing services from passing those costs on to their drivers or riders. And the article notes that Taiwan has also hit Uber with a $6.4 million tax bill, while Seattle has passed a new law allowing ride-sharing drivers to unionize.
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Massachusetts Will Tax Ride-Sharing Companies To Subsidize Taxis

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  • by Anonymous Coward on Monday August 22, 2016 @07:37AM (#52746821)

    You're not a taxi service but taxis are potential competitors. Are the like of Uber and Lyft starting to drop the veneer that they don't occupy the same service space as taxi companies? Or are they going to continue with the double speak?

    • by tlambert ( 566799 ) on Monday August 22, 2016 @07:51AM (#52746893)

      You're not a taxi service but taxis are potential competitors. Are the like of Uber and Lyft starting to drop the veneer that they don't occupy the same service space as taxi companies?

      I imagine they are saying that if a taxi see someone standing there waiting for an Uber, they might try to "vulch" the customer, and steal it from the Uber driver already en route.

      While it is currently illegal for Uber drivers to do the same to taxis, since they would then have to be fully compliant with taxi regulations.

      For example, it's also illegal for Town Car operators to pick up people at the San Francisco Airport who are waiting for transport, unless they specifically called the Town Car company, even though both the people and the Town Car are there, the Town Car's fare's flight got delayed or cancelled, and there are not Taxis in sight.

      So yes: Taxi's potentially compete with Uber (and Town Cars), but Uber (and Town Cars) does not compete with ad hoc taxi service.

      • If they want to place requirements and fees on Uber and Lyft similar to taxis, fine. But when you start with these 'selective and creative tax and subsidy' schemes you can create more problems then you solve. Let taxi companies figure out how to improve their infrastructure on their own. If there is some public infrastructure that is agnostic to the companies providing service, but allows improvement, then build that with the regular tax income.
        • by Anonymous Coward on Monday August 22, 2016 @08:31AM (#52747101)

          This just means that Taxi services aren't providing the service that customers want. The solution is for Taxi companies to adapt or to push for any legal changes regarding their operations that will allow them to compete.

          Taxing one private company for another's direct subsidy is just un-American.

          • by Holi ( 250190 )
            But making one company jump through hoops while another gets to ignore them is?
      • LMOL yes moron Uber competes with taxi service.
        • Subsidies (Score:5, Insightful)

          by fyngyrz ( 762201 ) on Monday August 22, 2016 @10:43AM (#52748057) Homepage Journal

          LMOL yes moron Uber competes with taxi service.

          Sure. Any transport method that is used instead of another is competition. Walking, bicycles, private cars, motorcycles, skateboards, Segways, busses, subways, jitneys, hansoms, taxis, limos, Uber... all competitors that reduce opportunity for the others.

          Anyway, the story is that Uber's earnings will be garnished to subsidize taxis. I wonder, would people approve if their bicycles and cars and so on were taxed specifically to subsidize taxis and/or other transportation methods?

          It's fascinating to see the "this business has a right to exist, workable business model or not" attitude arise in a new space, and to watch the politicians be bought and sold accordingly.

    • by TheCarp ( 96830 ) <sjc@nOsPam.carpanet.net> on Monday August 22, 2016 @09:53AM (#52747693) Homepage

      Are the polititions going to drop the veneer of giving a shit about the public when they support the very cab companies that have done jack shit for consumers right here in boston for decades?

      Everyone I know who doesn't drive, and many who do, uses these services on a regular basis, choosing them over cabs. Anyone who has taken a cab knows why.

      Where was the precious regulation for YEARS when cabs were "required" to take credit cards, but regularly just drove around telling people the machine was broken. The local news was doing investigative reports about how bad the cabs were before Uber got here.

      Now all of a sudden the poor cabbies who squandered their government granted monopoly for decades are crying foul and the politicians are happy to turn a blind eye to decades of disservice for a buck.

  • by iCEBaLM ( 34905 ) <icebalm @ i c e b a l m.com> on Monday August 22, 2016 @07:41AM (#52746839)

    This is like taxing car owners to subsidize stage coaches.

    • It would be closer to the post and courier services. The post has to deliver a mail to anywhere and not just the easy places. This is not the case for courier services.

      The taxi companies (at least many places - I do not know if it concretely the case in Massachusetts) has to drive you were you want to go, even if it is to a part of town the taxi driver wants to stay out of. This is not the case for Uber/Lyft.

    • Re: (Score:2, Insightful)

      by TFlan91 ( 2615727 )

      > This is like taxing car owners to subsidize stage coaches.

      What? How?

      A more accurate simile would be,

      This is like taxing coal to subsidize wind.

      • by PrimaryConsult ( 1546585 ) on Monday August 22, 2016 @08:06AM (#52746985)

        Wrong way around, more like taxing wind to subsidize coal. Historically taxes of that nature worked as your example: the government taxes the older, less glamorous thing to help the new thing. For example there was a 10% tax on railroad tickets from 1942 to 1962 (originally intended for WW2) which eventually was used to fund airport and interstate construction, which helped doom the private railroads.

        If the government wanted to do it consistent with history and your example, taxi fares would be taxed to subsidize ride sharing even as they're losing money.

        • No it's like taxing coal to subsidize wind. You have more control over coal so it's more like a taxi service. Wind goes where it goes so it is more like Uber.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      This is like taxing car owners to subsidize stage coaches.

      Hardly. The Uber and Lyft people in typical Silly Valley marketing hype are saying their services are a new and innovative way for personal transportation and it's going to revolutionize how people live and travel!

      In reality, it's just a cheap way to get around regulations, pay their workers less and pocket the difference so one day, they can IPO their companies and make BILLIONS off of stupid people who fall for the BS that Uber and Lyft are tech companies.

      With their reasoning, I can open up a bakery, ha

    • This is like taxing car owners to subsidize stage coaches.

      Indeed. MA screwed the metaphorical pooch on a coupe other levels, too. For example from TFS:

      requirements . . . such as regular vehicle inspection by the police

      Which is like having your regular colonoscopy done by the fire department.

    • Lot of uber trolls nice...
    • by Tailhook ( 98486 )

      If only buggy whip manufacturers had had the political clout to have trolly/car/bus operators taxed for their benefit. We'd have buggy whip shops filled with beautiful buggy whips that no one buys. Perhaps we'll have taxis that no one actually uses, but gainfully employed taxi drivers standing by nonetheless.

  • by SeattleLawGuy ( 4561077 ) on Monday August 22, 2016 @07:42AM (#52746847)

    > The whole fee will go away at the end of 2026.

    If you believe that, I have a bridge to sell you.

  • by Gilgaron ( 575091 ) on Monday August 22, 2016 @07:52AM (#52746903)
    How do they ban the passing of the costs to drivers or passengers? Or is the point just to prevent it being a line item like the taxes and fees on a phone bill so that voters don't get mad about seeing it?
    • by cdrudge ( 68377 ) on Monday August 22, 2016 @08:12AM (#52747019) Homepage

      Here's the relevant section of the law:

      (b) Annually, not later than February 1, each transportation network company shall submit to the director of the division established in section 23 of chapter 25 the number of rides from the previous calendar year that originated within each city or town and a per-ride assessment of $0.20. A transportation network company shall not charge a transportation network rider or a transportation network driver, as defined in section 1 of chapter 159A½, for the cost of the per-ride assessment. Not later than June 30, the director shall post on the divisionâ(TM)s website the aggregate number of rides from the previous calendar year originating within each city or town.

      The rider or the driver are not to be charged. So it has to come out of Uber's existing take of each ride. It makes it more expensive for Uber while it doesn't cost the rider any more and the driver still makes just as much.

      But ultimately there is no way to prevent Uber from just raising their costs in other areas to offset their costs. It's no different than fining a company for some illegal act...the cost is always ultimately passed on to the customer. Or a police department settling a lawsuit...it's not the police that pay it, it's the tax payers. The one that actually pays money into the system is always the one that foots the increased costs.

      • by PRMan ( 959735 )
        The drivers don't have to pay for it...but, in unrelated news, their pay just went down again across the board.
    • by fnj ( 64210 )

      Or is the point just to prevent it being a line item

      Yep. That's it. Obviously the thugs can't outright force the businesses not to raise their rates.

  • by Arnold Reinhold ( 539934 ) on Monday August 22, 2016 @07:54AM (#52746917) Homepage
    This tax is a very small bone that was thrown to the taxi industry who wanted far more crippling regulation of their competition. The ride sharing companies won big in this law.
    • Come on, man.

      You're screwing up our parable of the clever, innovative upstart versus the entrenched, probably corrupt, existing service with a side of government overreach.

  • They should really just UBI it for taxis.

    Everyone with a hack medallion gets as much money as they would have gotten, had they actually done their job, and then whatever that costs, tax the ride sharing companies that. Then the taxi drivers won't have to work at all, instead of working only profitable areas, despite being called for an unprofitable pickup, which they just ignore anyway.

    Then hack medallions can be like dividend paying stock investments, instead of licenses to work in a government granted mo

    • They should really just UBI it for taxis.

      Everyone with a hack medallion gets as much money as they would have gotten, had they actually done their job, and then whatever that costs, tax the ride sharing companies that. Then the taxi drivers won't have to work at all, instead of working only profitable areas, despite being called for an unprofitable pickup, which they just ignore anyway.

      Then hack medallions can be like dividend paying stock investments, instead of licenses to work in a government granted monopoly market with enforced artificial scarcity.

      If the government really wanted to help the taxi drivers, it should offer to buy the medallions back at the price they sold for 5 years ago and then throw them all in the trash. The whole medallion "lottery monopoly" is as stupid as it gets. In certain places this makes sense. For instance having a "lottery monopoly" for crab fishing where too many fishing boats can hurt the crab population makes a certain amount of sense but it's hard to make the same argument that too many taxis hurts the population o

  • by dave420 ( 699308 ) on Monday August 22, 2016 @08:03AM (#52746971)

    Uber is simply not engaged in "ride sharing". Ride sharing is when a driver is going to make a journey, and takes one or more people with them, in return for covering their costs on the way. No money is made, and the journey happens regardless of the extra people along for the ride.

    • by ranton ( 36917 )

      I agree its a poor choice of terminology, as what they are really doing is "vehicle sharing." Although the word "ride" can be used colloquially as meaning someone's vehicle, such as the statement: "check out my new ride." Either way calling the company part of the sharing economy is still accurate.

  • Traditionally, a tax on one line of business would be to support special costs and infrastructure that business might require. Taxis might be levied to support taxi stands, security services and special lanes. But what is a tax on non-medallion ride sharing services only supposed to provide? Because for socialists the cure for a monopoly is to add a tax rather than to let in competition, one-quarter of the new Massachusetts tax is a subsidy to the medallion drivers. But does the rest of it go into anything

    • I don't know what they're planning, but subsidizing to ensure the availability of taxis is likely enough.

      In many areas (I don't know about Massachusetts), taxis aren't legally allowed to refuse fares, while there's no such restriction on Uber and similar companies. So when your flight doesn't get in 'til 2am and you live in a slightly sketchier neighborhood, but none of the Uber drivers are willing to take you there, the taxis need to still be available.

      (I've even had trouble w/ getting the SuperShuttle to

    • Taxi's play nice with what people in a city need, and that incurs some extra cost. Uber doesn't play nice with what cities need, this allows them to run cheaply. The who have to be balanced or the one that doesn't play nice will just run the others out of the city.
    • Because riding in a Ford Fiesta is improving the experience of riders....
  • Republican Governor Charlie Baker signed the law, which specifically bans ride-sharing services from passing those costs on to their drivers or riders.

    The price is determined by the costs how else do you stay in business. It would be stupid to think otherwise.

    • by fnj ( 64210 )

      Don't you realize? The pols RELY on the voters being stupid SOBs. And they are almost never disappointed.

  • The drivers are the people in the most realistic position to be liable for local laws and taxes. If it isn't profitable for the drivers then they will not do the work. They would be the ones potentially breaking any local laws. Prices for uber will go up until enough people are willing to drive for that price.

    I see no reason people can't unionize but I do see a problem where people have to be unionized or have to pay dues and obey.

    But I also see a problem with tips. That results in lower base pay and unstab

  • To subsidize the oil industry

  • by transami ( 202700 ) on Monday August 22, 2016 @08:50AM (#52747229) Homepage

    In fact, if they levied a 50% per fare tax instead, then the Taxi company could just call an Uber for you.

  • by fluffernutter ( 1411889 ) on Monday August 22, 2016 @08:53AM (#52747251)
    To me it seems easier for Uber just to do the work required to fulfill a cities needs like the taxi services do. Contract some drivers to wait around like the taxis do, force them to go anywhere the fares need to go, have some cars that are up to taxi standards and regulation, and have a certain number of cars for the physically disabled. Then the whole issue goes away.
  • "Republican Governor Charlie Baker signed the law"

    And the GOP wonders why people are leaving its party in droves?

    The GOP used to be about free-market economics, not protecting a government sinecure.

  • As an ex-cabbie... (Score:5, Interesting)

    by spywhere ( 824072 ) on Monday August 22, 2016 @09:11AM (#52747381)
    ...I am biased, but there is logic behind my bias.
    Municipalities require licensing for taxi services because the taxi drivers are conducting the actual business transaction -- agreeing to transport the customer for a price, whether pre-agreed or subject to a meter reading, at the point of pickup within the municipality.
    Most municipalities also require background checks for the drivers and company owners, and have safety requirements for the vehicles, as [a means to ensure customer safety | a revenue generator].
    Passengers, however, are unscreened and unknown. They might come in from a phone call, or they might hail a taxi on the street.
    Most of the risk, both financial and otherwise, falls on the drivers.

    So, along come Uber, Lyft and their ilk, conducting the transactions online (thus, outside the municipality) and essentially reversing the standard cabbie/passenger dynamic: the passengers are pre-identified (to sign up, they needed a cell phone, a credit card and a valid address to go with it), and the drivers are unknown (except to the companies, which do little or no effective screening). The vehicles used are unlikely to meet the requirements for taxi use, and are often flat-out unsafe for drivers, passengers, or bystanders.

    The companies start doing business anywhere they like, and fight against the requirements -- only if challenged -- with funds from their financial backers.
    Municipalities are not happy about this, for both safety and financial reasons. Taxi owners and drivers, most of whom have invested considerable time and money to clear regulatory hurdles, are understandably upset at this end run around the law.

    Imagine if Internet gun sellers showed up doing business in NYC or Washington, D.C. and claimed similar exemption from the local (highly restrictive) laws...
    • Re: (Score:3, Interesting)

      by Pete Smoot ( 4289807 )

      I am biased, but there is logic behind my bias.

      We all have biases and priors. Good on you for admitting it.

      I'm going to re-arrange the order of some of your points to make a clearer response.

      Municipalities require licensing for taxi services because the taxi drivers are conducting the actual business transaction -- agreeing to transport the customer for a price, whether pre-agreed or subject to a meter reading, at the point of pickup within the municipality. Most of the risk, both financial and otherwise, falls on the drivers.

      I think in those respects, taxis and ride sharing are essentially identical. Your transaction is with the driver, brokered via Uber/Lyft/etc. The driver, as a contractor, takes the financial risk if they are trying to drive as a full time job. They may or may not make enough money depending on how many rides they get, how many hours they can work, and so forth. The

  • Damn cities for wanting transportation services that work for everyone equally! DAMN THEM!
  • what they really mean is the state government will embezzle it for their own personal needs
  • 2.5 million rides x $0.20 per ride = $500,000 per year, not millions. Unless there are a whole lot of smaller ride-sharing businesses in MA with a combined multiple times the volume of Uber and Lyft, this the post fails as a troll.

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