A new Massachusetts law levies a 20-cent fee from each car ride hailed by an app service. Five cents will go towards the needs of traditional taxi services, ten cents will go to cities and towns, and the last nickel is designated for a state transportation fund.
Uber and Lyft alone facilitate a combined 2.5 million rides per month in Massachusetts, which means millions per year for the Commonwealths crony, MassDevelopment, that will be figuring out how to spend the money that ride-sharing companies make.
The law states that the money will be used to help “new technologies and advanced service” for the traditional taxi industry. Which means reallocating resources to encourage driver hospitality and an app service for hailing taxi cabs, the two things that set companies like Uber and Lyft apart from traditional taxi services.
“I don’t think we should be in the business of subsidizing potential competitors,” said Kirill Evdakov, the chief executive of Fasten, a ride-sharing service that operates in Boston.
Lawmakers also thought they could prohibit ride-sharing companies from charging customers the 20 cent fee, but in reality, the companies will simply find some other excuse to adjust their prices in order to pass on the fee to the customer.
Massachusetts leads the country in progressive economic lunacy. Taxing successful companies and propping up inefficient ones is not capitalism. Government shouldn’t play favorites.