Massachusetts will take money from Uber and Lyft customers and give it to taxi medallion owners

“Massachusetts to tax ride-hailing apps, give the money to taxis” (Reuters) is an interesting example of why the highest return on investment for American business is lobbying the government:

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.

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.

Of course, the fee is small right now but federal income tax was originally (1913) at a 1% rate, with the first $3,000 exempt ($73,000 in today’s mini-dollars; see Wikipedia). Once the mechanisms are all set up and running it should be easy to adjust the fees and extend the law beyond its proposed 2026 sunset.

One question is how to realize the American dream of a river of cash without working. A taxi medallion in New York was $1.3 million in 2013 (nytimes) and “more than $700,000” in 2014 in Boston (Globe). But most of the suburbs of Boston are small towns in which it may not cost much to register a taxi (Waltham seems to charge $25). As this is a statewide law the handouts should be distributed statewide as well, not just in the city of Boston where taxi medallions are expensive. Why not set up a taxi company in Waltham, for example, linked to an Ooma phone number that always goes to voicemail saying “We are busy right now”? Now we are in the Check of the Month Club?

4 thoughts on “Massachusetts will take money from Uber and Lyft customers and give it to taxi medallion owners

  1. Also, the busy virtual taxi company sounds like an idea worth exploring. What if someone started a thousand such companies? Each should of course get their fair share of the Uber pie.

  2. Taxachussetts lives up to its name yet again!

    I love Boston and hanging around with the smart and interesting people that it attracts. But the cost of living, together with the taxes just makes it hard to live there on a scientist’s salary.

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