State Legislature Weighs New Taxes for Ride-Sharing Services

Boston Mayor Martin Walsh, BC ’09, appeared before the Massachusetts Legislature’s Joint Committee on Financial Services on July 23 to support increasing taxes and fees on ride-sharing services. By inflating taxation on ride-sharing services, lawmakers intend to advance improvements to public transportation with the increase in funding, as well as decrease traffic congestion and carbon emissions.

So far this year, Walsh has focused many of his efforts on the regulation of ride-sharing services and betterment of Boston’s public transportation. At the hearing, he promoted two acts—H.1067 and S.102—that would increase taxes and fees placed on ride-sharing services; fees which they would not be legally allowed to redirect to passengers and which Mass. governments would put toward local transportation departments. 

The bills propose changing the fee on ride-sharing services from the current flat fee—20 cents per ride—to 6.25 percent, the same as Massachusetts’ sales tax. For shared rides and trips in zero-emission vehicles, the fee would decrease to 3 percent. The bills levy an additional 20-cent-per-mile charge for service vehicles traveling without passengers. This would not apply to zero-emission vehicles. 

In 2016, Massachusetts governor Charlie Baker signed a bill that charges ride-sharing services a 20-cent fee for every ride. Companies cannot push the fee onto customers.

In 2018, Massachusetts raised over $16 million from the existing tax—around 25 percent more than the previous year. The funds were distributed in two ways: first, to MassDevelopment and the Commonwealth’s Transportation Fund; second, to local governments proportionate to the number of rides initiated in their jurisdiction—Boston received over half of the latter allocation.

“This is about tackling traffic issues, it’s about tackling the environment and it’s also about making additional revenues we can reinvest,” Walsh said in the hearing.

All three topics have been high-profile issues as of late. A 2018 report by global analytics company INRIX ranked Boston the worst city in the United States for traffic and No. 8 worldwide. And the Massachusetts Bay Transit Authority (MBTA) struggles heavily with maintenance issues, with trains having lost power, derailed, and caught fire due to engine problems within the last month. Walsh hopes to make Boston completely carbon-neutral by 2050

The acts encourage further regulation of ride-sharing services, as additional data would be collected from companies, which Baker is working toward as well.
Ride-sharing services have voiced opposition toward the bills. Lyft spokesperson Campbell Matthews said that these fees could encourage riders to drive their own cars instead, increasing vehicle congestion. Uber spokesperson Harry Hartfield commended Walsh’s attempts to regulate traffic in a statement to WBUR, but added that he doesn’t think these bills would resolve the issue. He also raised concerns that the taxes would primarily affect Bostonians who don’t own cars.

Featured Image by Maggie DiPatri / Heights Editor

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Mary Wilkie is the opinions editor for The Heights. She's not necessarily opinionated, but thinks Jack Goldman's opinions are always wrong, so she's opinionated about that, apparently.