Mass. Attacks Uber

Taxi subsidies


Uber and other ride-sharing apps are out-competing taxis by offering a better service. Taxi companies don't like that, and neither does the government of Massachusetts.

To assist the dying taxi industry in the state, Republican Gov. Charlie Baker approved a new 5-cent service charge on every single ride taken through a ride-sharing app. The funds will be used to subsidize taxi companies and to help them develop new technologies, such as an iPhone app that will let customers hail a cab.

Uber, Lyft, and similar apps already offer essentially the same service, which means the state is robbing Peter to pay Paul so Paul can become more like Peter. That doesn't sit right with the ride-sharing companies. "I don't think we should be in the business of subsidizing potential competitors," Kirill Evdakov, the chief executive of a Boston-area ride-sharing service called Fasten, told Reuters.

Still, ride-sharing companies in Massachusetts didn't bother fighting the tax, apparently fearing that further regulations would be imposed on them. The fact that the new law doesn't prohibit their drivers from picking up people at the airport, for example, was a win for the industry that they don't want to see reversed.