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Massachusetts Will Tax Ride-Sharing Companies To Subsidize Taxis (reuters.com)
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.
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.
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?
This is like taxing car owners to subsidize stage coaches.
> The whole fee will go away at the end of 2026.
If you believe that, I have a bridge to sell you.
Real lawyers write in C++
don't they first have to be uhh.... EMPLOYEES?
they have to win THAT battle, first.
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?
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.
"....bans ride-sharing services from passing those costs on to their drivers or riders."
What a bunch of bullshit. The government wants to tax them on a ride-by-ride basis, and the government also demands that the company eat the entire cost?
Taxes are bad enough without Big Brother sticking its fat nose into your business and telling you exactly how to pay them.
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.
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.
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 that improves the experience of riders?
Welcome to socialism.
Came here to say this... it is literally impossible for Uber to prevent this extra cost from impacting their business model.
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.
DRM? No thanks, I'll just get it somewhere else...
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 unstable service for customers as well as cultural discrimination. If anything I think it should be included in the up front costs. People should in no way be required to pay in cash. Tipping is a bad system.
"....bans ride-sharing services from passing those costs on to their drivers or riders."
What a bunch of bullshit. The government wants to tax them on a ride-by-ride basis, and the government also demands that the company eat the entire cost?
Taxes are bad enough without Big Brother sticking its fat nose into your business and telling you exactly how to pay them.
Indeed, and it is virtually unenforceable since the legislation involves no provision for the local governments to regulate ride-sharing fees. These smells more like an attempt to quell a legitimate objection by the ride share companies. "See, we stuck it to the evil upstart, and without raising the taxpayer burden a dime, we added a revenue stream!" Back-patting all around.
This has become a disheartening trend, both in your more socialist American and European States, as there become fewer pockets to pick to fund programs.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
To subsidize the oil industry
In fact, if they levied a 50% per fare tax instead, then the Taxi company could just call an Uber for you.
:T:R:A:N:S:
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.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Did Charlie Baker write the law?
What's bullshit is a company being able to come in and cut all corners when those corners were put there because it's what makes a service equally available for everyone. Taxi services are part of the overall transportation plan for the city. Uber doesn't want to be part of the plan, they just want to make money. That's why there needs to be an equalization.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Perhaps you'd enjoy learning more about Massachusetts, starting with the composition of its legislative bodies. Hint: they are overwhelmingly populated by Democrats. Please feel free to contribute more disingenuous soundbites to the discussion. -PCP
"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.
-Styopa
It's bullshit. Of course they can't prevent it. They can prohibit passing on the tax as an enumerated line item, and maybe make that stick,but there's no way in hell they can stop uber from just raising its rates by ... gee ... just HAPPENS to be the same amount as the tax.
They do this with gas stations. Gas stations are prohibited from enumerating on their signage the taxes which the corrupt statist pigs are saddling you with.
...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...
That provision is in there to prevent the ride sharing companies from putting the line "Charlie Baker Tax $0.20" on the receipts. It is obvious to everyone that these $0.20 will be coming from the customer, because Lyft doesn't actually print money, but the moment they expllicitly admit in writing that this is the case they are in vioation of the law.
Charlie Baker protecting his own ass in other words, making sure it's illegal to tell the voter why Lyft prices have gone up ever so slightly.
sigs are hazardous to your health
Republican In Name Only.
Who cares? He signed it.
Damn cities for wanting transportation services that work for everyone equally! DAMN THEM!
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Wait, the 'tax' is on ride-sharing services that 'cannot pass the tax on to the riders'.. How is that going to be enforced? How will anyone be able to tell a $0.20 increase in their fee without detailed analysis? Are you going to do that analysis while riding in a taxi for 10 minutes? Anyone else notice that only 25% of the fee is going to support the local Taxi service... Where's the other 75% going? Does no one do any research on these fees and see that they are simply a money-grabbing scam for the government? Isn't Charlie Baker a republican? Aren't they again taxation for small businesses and 'the little people'? Since when does business A have to pay a tax to support business B? How is that the 'free market' republicans claim they support? Wouldn't it have made more sense to reduce or eliminate the government-forced payment system that the taxis use now, in order to better compete in the emerging ride-sharing service? The governments solution to competition is to tax the better-setup system? CRAZY! Oh wait, its Massachusetts... No wonder I left 15 years ago.. Sorry guys, Baker (R) is really Baker (RINO).
Who are the real republicans these days? Trump?
what they really mean is the state government will embezzle it for their own personal needs
Politics is Treachery, Religion is Brainwashing
How much does an average Uber ride cost that a 20 cents per ride fee is onerous?
Mr. Hu is not a ninja.
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.
[nt]
File under 'M' for 'Manic ranting'
... why ride sharing services don't run afoul of laws against picking up hitchhikers?
File under 'M' for 'Manic ranting'
I know, we're all supposed to be Libertarian free market people on Slashdot, but in this case the tax makes sense. Since Uber and others refuse to be regulated like a taxi service, and are providing the same service cab companies are, this is the penalty for doing business. The thing that regulated cab companies bring to the table is the fact that, in large cities, they provide part of the public transportation system. An Uber driver can choose whether or not to take someone to a sketchy neighborhood at 3 AM, while a regulated cab company can't. In New York, the medallion system prevents traffic nightmares by controlling the number of cabs that can work in Manhattan. Imagine Manhattan rush hour traffic with an extra 50,000 cabs on the road on top of all the private cars, buses, etc. Taxi regulations ensure that cabs are at least inspected once in a while, while Uber has no such requirement other than the driver's personal inspection -- but they don't check that.
I say Uber should just bite the bullet and become a regulated taxi service in the areas they want to do business in. I know disruption and "X on your phone" is all the rage, but think about the taxi drivers themselves. Driving a cab is pretty much a job of last resort for some people. Do you really want to take away yet another way for people to make money in this gig economy?
Except it was not Uber, who created those hoops. The taxis have suffered from the usual Big Government approach to business:
If we all had smart-phones 100 years ago, today's taxi regulations (and the various boards enforcing them) would not have been created. Which means, it is time for them to be abolished.
In Soviet Washington the swamp drains you.
They can't really ban them from passing on this cost. Unregulated taxi companies like Uber are free to set their price, which is part of what make them different from actual taxis.
What they don't want is the tax to appear anywhere in the bill or driver contract. It is a form of consumer and driver protection, they don't want the ride to become a confusing "$10 + tax", but I don't see how they can't prevent the price from being "$10.20". And for the drivers, Uber can't just add 0.20$ per trip to the commission without first renegotiating the contracts, something that the drivers can probably refuse to do since "because taxes" cannot be used as a reason.
Ever since the horseless carriage appeared, I've been losing money.
I demand the government subsidize me.
Well, that or I could recognize that my business model is outdated and superseded and I could go into something else...
I don't know the meaning of the word 'don't' - J
are ridiculous. That's what business competition *IS*. Trying to maintain as high popularity/profitability while doing as little things as possible and doing those that must be done as efficiently as it can is what defines business competition. Yes, sometimes that means private companies fighting legislation, but when a significant amount (maybe even the majority at this point?) of users/customers also consider this legislation to be shit and that it has to be changed, it is a good thing,
equally available, yet more expensive?
This is a fairly obvious example of rent-seeking.
Or crony corruption. Using the word 'capitalism' to describe the government's action requires the word 'anti' to also be used.
God, am I glad my home state left the Commonwealth when it did. The land of freedom has become the land of vile socialism. They don;t call it Taxachusetts for nothing. And it's no coincidence that some of our oldest, most established, and most respected institutions of higher learning are founded there.
“I feel that this country is being destroyed by its philosophy. Specifically, by its universities. The most dangerous thing in this country today are the universities, because of teaching the kind of ideas that would necessarily have to lead to the destruction of this country.” Ayn Rand*
* Even a blind squirrel finds a nut now and then.
deleting the extra space after periods so i can stay relevant, yeah.
This completely ridiculous law is merely to stick it to Uber while assuring the voting public that he's not trying to hurt them. Completely unenforceable and therefore it is just lip service for the sheep to believe.
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.
I've fallen off your lawn, and I can't get up.
It is...impossible for Uber to prevent this extra cost from impacting their business model.
I'm not sure I understand what you mean. Their business model, near as I understand it, is to broker transactions between independent drivers who supply their own vehicles and riders who want a ride, taking a cut from each ride as a brokerage fee. How does an added fee make that impossible?
I'm sure this will have some affect on their financial model (what they want their gross margin, net margin, earnings, etc.) to be. Is that what you meant? If so, I don't get the significance of your point. Yes, it will affect the numbers but not by any significant amount.
We need the 'I'm not in business, I facilitate micro business" model to exist.
But at the same time, we have to admit that those micro businesses avoid the regulation that normal small (and large) businesses have to do. This is an unfair advantage. As such, it makes a good compromise to allow them to exist, but have them pay a tax to equalize things out. They avoid the business regulations, but have to pay to do it.
Ideally, this will allow the innovation - such as getting clients via apps - but prevent the major abuses.
We should use this same model for the other 'facilitating micro businesses" such as AirBnB.
excitingthingstodo.blogspot.com
They do this with gas stations. Gas stations are prohibited from enumerating on their signage the taxes which the corrupt statist pigs are saddling you with.
At least in my state, all taxes are displayed on each pump. There may not be station-provided signage everywhere but it is pretty apparent how much taxes add to the cost of the fuel.
Enigma
Someone has to pay for the extra services that no driving service really wants to support. There are many situations where people are subsidized for things like taxis if they have a need and cannot afford.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Umm no thanks. Taxi regulation exists so you're not riding around in a death trap, it should be enforced on Uber & Lyft.
Why subsidize a model that doesn't serve people's needs anymore?
Taxi's potentially compete with Uber (and Town Cars), but Uber (and Town Cars) does not compete with ad hoc taxi service.
The person called Uber instead of a taxi. You don't call that competing?
Uber drivers are not sharing a ride, they're offering an alternative to taxis; that's competing.
No temporary tax or fee EVER goes away.
Corporatism != Free Market
Uber has shown they're wiling to play rough. I wonder if they've considered giving all (not just MA) drivers a sticker that says "If you think our costs have gone up, you should know that MA Governer Charlie Baker created a law to increase the cost of every ride by $0.20 which we cannot add to your bill. Learn more at www.CharliePaysOffCabbies.com"
If they haven't thought of it, somebody should suggest it to them.
Nuff said!
How do taxis not meet people's needs? People need a vehicle to be waiting at airports and hotels, people need safety, some of these people are physically disabled and need that as well. Many people are in the middle of nowhere but still need a ride. These are things that the taxi service provides that Uber does not.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Will the Uber app tell me the last time the driver had a complete service on his/her vehicle? Because if I can go in the app and it indicates 'This driver is certified for safe driving as of last week by garage X' then fine. Otherwise you at least need regulations to keep the cars safe.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
So much for free enterpise, open markets, and fair business competition.
Taxes are best tolerated when hidden. Listing out all the taxes is also inconvenient. Note, what you pump at the pump is what you pay for gasoline. All taxes are included. Single price. People love it. Movie tickets are generally don the same way. $10 for a $10 ticket. Taxis are also the same. The fare is the price. Nothing addded on at the end, but it's all in the fare. You don't get a $2 ride, with a $10 medallion fee, $10 tolls, $10 cleaning fee (sometimes the tolls are separated, depending on country, but most roll them into the fare for a single price), you just get a $32 fare.
Tellng people how to show a price to their customer is one of the basic functions of government. Anything else is a fraud.
Learn to love Alaska
Public transit provides a service that complements as well as competes -- especially in an old, dense city like Boston where there isn't a lot of room to add cars and public transit carries about half the commuters despite being in dire financial straits.
Think about what would happen to Uber and Lyft in a place like that if you doubled the number of people using surface roads.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
The taxi companies need to stop complaining so much and trying to get ride sharing services blocked and start trying to compete with them. A little improvement of the quality of the taxi vehicles themselves, improvement of taxi drivers etiquette and demeanor, and develop an app like Uber that allows people to get a price estimate for the trip, hail a cab, and pay for it, all via the app and Uber would have a MUCH harder time taking their business away. Competition from ride sharing services should foster improvement in the taxi industry or they deserve to die out.
I wish I had a lawn.
"the law, which specifically bans ride-sharing services from passing those costs on to their drivers or riders"
And how is that supposed to work?
Are most of the existing laws on the books preferred by Republicans or Democrats? Since the Republicans can't actually overturn the laws that are causing many of the problems (for example, the (Un)Affordable Care Act), perhaps we don't really have a good way to conclusively tell which side would really have a good chance at ruling this country better since many bad laws get on the books and never get overturned, not to mention all of the regulations put in place by Democrat friendly bureaucrats in the various departments of the various governments.