Uber Regulated
Massachusetts Will Subsidize Taxis By Taxing Uber

Massachusetts is planning one of the most blatantly blue model policies we’ve seen in some time. Reuters has the story:

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.

We’d imagine they aren’t. But the thing is: riders shouldn’t be enthusiastic either. This benefits the taxi industry and no one else. Moreover, riders won’t even know the fee is being assessed because the law doesn’t allow Uber and Lyft to show it on the invoice—a sneaky way to keep the political backlash to a minimum.

Reuters reports that some taxi drivers were hoping the Massachusetts law would go farther and put ride-hailing apps out of business, but that’s unlikely to occur because the move would be so unpopular. As we pointed out last week when Uber announced the imminent launch of its driverless vehicles, the more cost pressures governments put on companies like Uber, the faster those companies will try to cut expenses by doing things like eliminating altogether the need for drivers. And if Uber is successful at eliminating drivers, the cost savings will make it impossible for traditional taxi services to compete.

Thus do the defenders of the blue model eat their own.

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