Massachusetts Is Levying A Fee Against Uber, Lyft

Uber and Lyft have been making it easier to hail a taxi, but they are also raising the ire of local state governments, which argue the app startups should share their profits. Massachusetts is one state that feels that way, according to a Reuters report, and is gearing up to levy a $0.05 fee per trip on Uber and Lyft. The money will go to the traditional taxi industry as a subsidy, which the report noted appears to be the first time a state has moved to do this.

Earlier this month, Republican Governor Charlie Baker signed the new fee into law as part of a package of wide-reaching regulations for the ride-hailing app industry. The move has resulted in consternation on the part of ride-hailing companies who think it’s unfair. “I don’t think we should be in the business of subsidizing potential competitors,” said Kirill Evdakov, chief executive of Fasten, a ride service that launched in Boston last year and also operates in Austin, Texas. The report noted the fee could raise millions of dollars for the state each year since Uber and Lyft have a combined 2.5 million rides per month in Massachusetts alone.

The law states that the money collected will help the taxi industry adapt to new technologies, advanced services, safety and operation capabilities and help in workforce development. It’s not clear how the fee will be collected and how the money will be spent. While this appears to be the first time a state has done this, the taxi industry wants the state to go even further.

“They’ve been breaking the laws that are on the books that we’ve been following for many years,” said Larry Meister, manager of the Boston area’s Independent Taxi Operators Association, in the report.