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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.
"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 Operator's
Association.
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.
The law says the money will help taxi businesses to adopt "new
technologies and advanced service, safety and operational
capabilities" and to support workforce development.
Regulations for how the fee will be collected and a plan for how
it will be spent still need to be drawn up, said Mark Sternman,
a spokesman for the state's MassDevelopment agency, which will
be in charge of the money.
Riders and drivers will not see the fee because the law bars
companies from charging them. Instead, companies themselves will
pay the state, although Evdakov said it will be passed on to
riders or drivers one way or another.
Authorities worldwide are grappling with how to regulate and tax
ride-hailing. Seattle has passed a law that allows drivers to
unionize. In Taiwan, Uber is battling a tax bill of up to $6.4
million.
Despite the cost, ride services in Massachusetts appear to have
accepted the fee in exchange for other provisions. For example,
the law does not ban them from picking up at Boston's airport or
convention center, although there will be special rules for
those sites.
Lyft is pleased with the law even though it is not perfect,
spokesman Adrian Durbin said.
Soliciting readers for how to spend the 5-cent fee, a column in
the Boston Globe offered ideas such as hospitality training,
incentive bonuses and help so taxi owners could buy "flagship"
vehicles like a 1940s Checker or a Porsche.
Meister said the money could go toward improving a smartphone
app his association has started using, or to other big needs.
"We definitely need some infrastructure changes," he said.
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.
(Reporting by David Ingram in New York; Editing by Phil
Berlowitz)
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