February 28, 2020

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Higher ride-hailing fees bad idea

By
Christina Fisher, Executive Director for Massachusetts and the Northeast
CommonWealth Magazine

Those of us who live in Massachusetts can all agree that transportation across the state has been a major problem in need of serious solutions for a long time. Unfortunately, our state’s policymakers want to pass a significant tax increase on rideshare rides that would only hurt consumers and do little to meaningfully address our congestion and public transit issues.

This week, policymakers proposed a 500 percent increase to the ridesharing tax, which would increase the tax from 20 cents to $1.20 – this comes after Gov. Charlie Baker also proposed an increase in the tax in his recent budget proposal.  They should reconsider.

First, increasing this rideshare tax would hurt consumers of all backgrounds who rely on rideshare services like Uber and Lyft to get around. For many in our state, ridesharing improves the decades-long problem of access to safe and reliable transportation, which used to be largely reserved for more affluent Boston-area residents who could afford their own car, or for communities with better access to the T or taxis. Now, reliable and affordable transportation is just a click away – no matter your income or where you live.

This new consumer convenience has empowered individuals with mobility challenges — including seniors, persons with disabilities, individuals without access to a personal car, and people who work the night shift and commute when public transportation is closed — as well as other previously underserved communities. In fact, nearly half of Lyft rides originate or end in low income areas of Massachusetts, while ridesharing is growing fastest in rural and suburban communities where there is limited public transportation. If Massachusetts policymakers significantly increase these rideshare taxes, they will hurt these consumers and others by limiting access to these services.

Second, lawmakers claim the tax increase aims to change consumer behavior, but the legislation will fall short of achieving this goal because it prohibits rideshare companies from telling riders about the tax amounts and passing the assessments on to them.  If the State House is serious about using a tax increase to encourage riders to take shared rides, they should allow rideshare companies to be transparent so riders can make those choices with all the information.

Finally, this punitive tax increase largely focuses on a convenient scapegoat for our state’s traffic and transit problems, while ignoring all the real drivers of problems that existed well before ridesharing companies. The Commonwealth’s own data show that ridesharing accounts for just 4 percent of traffic in the Boston area. Other cities that have instituted high fees on ridesharing have not yet seen any significant impact on congestion.

The causes of congestion are complex, but according to a Boston Globe series, they include incentives that actually encourage people to drive to work. Instead of targeting these factors, some policymakers want to avoid big structural changes and place an unreasonable burden on the ridesharing community. It makes no sense to tax ridesharing that many hard-working residents rely on. A tax increase on rideshare rides won’t end congestion or solve the MBTA’s problems, but it will hurt a lot of people who rely on rideshare services.

Together with policymakers, mass transit agencies, and other stakeholders, we should all be focused on the real problems we are trying to solve, identifying the contributing factors, and debating the best way to solve them. Ridesharing companies are focused on the Massachusetts consumer — enhancing their quality of life, using innovation and data to deliver better transportation options for them, and helping them be more productive by more efficiently moving them from point A to point B, especially when other options aren’t available. Increasing rideshare taxes in a significant way would jeopardize all these worthy aims.

Now is the time to think big and holistically: create new incentives like tax breaks that discourage people to drive to work, study how to implement comprehensive congestion pricing, or build with more density instead of just promoting sprawl. There are serious solutions to our transportation crisis. A 500 percent statewide tax increase on ridesharing rides is not one of them. I urge state leaders to work together with ridesharing companies to find a reasonable and equitable solution that will continue to improve transportation in Massachusetts.

Christina Fisher is TechNet’s executive director for Massachusetts and the Northeast. Uber and Lyft are members of TechNet.

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