Wednesday, August 24, 2016

Don't Believe Uber -- Massachusetts' New Ridesharing Tax Is Terrible

By Jared Meyer

Massachusetts recently passed a law that places a 20-cent tax on each ridesharing trip in the state for the next ten years. Believe it or not, five cents from this tax goes directly to the taxi industry. Yes, you read that correctly— Uber riders in Massachusetts have to pay more to prop up the failing taxi industry .

In the past, ridesharing’s opponents used overinflated claims of protecting public safety to justify their pushes for greater regulation. Now, apparently the argument for direct subsidies to the taxi industry is enough, as Massachusetts’s ridesharing law does not even attempt to connect the additional charge to made-up public safety concerns.

This tax is a way to pay off the losers—in this case the taxi industry, which is losing riders to clear, cheaper Ubers and Lyfts. Yet paying off the losers discourages innovation and adversely affects consumers.

Surprisingly, both Uber and Lyft praised the new law for supporting “innovation.” The companies are behaving in a politically-correct manner to avoid more draconian regulations, such as those that were passed in Austin, Texas. Yet the per-ride tax sets a terrible precedent, both for ridesharing and innovation.

As proof, consider what Uber’s critics are saying about the law. Scott Solombrino, a spokesman and executive for taxi companies, said, “Massachusetts now has one of the toughest laws on the books, and I think it’s going to become a template for other states.” Translation: Uber riders, higher fares are coming to a city near you.

Read the rest here.

No comments:

Post a Comment