Most of the proceeds will be split between cities, towns and the state transportation fund, with the 20-cent fee in and near Boston going straight to the MBTA. Companies could pass the costs on to drivers.
Massachusetts was one of the first states in the country to impose a fee on Uber and Lyft when a 2016 law mandated a 20 cents fee. However, with companies increasingly blamed for congestion, lawmakers and Governor Charlie Baker agreed through 2020 that fees should be increased.
“Because we were almost further in the nation [ride-hail] Fees, our fee structure was out of date, ”said Senator Joseph Boncore, who led the chamber in negotiating the deal. “Since we did it in 2016, I think we’ve given the market enough time to develop and it was just time.”
In 2019, the state registered around 91 million Uber trips – enough to raise around $ 18 million. With the new fees, that number could be closer to $ 100 million.
But as with much of the transportation industry, Uber and Lyft saw a sharp drop in driver numbers during the pandemic. Therefore, the increased fees are unlikely to generate significant revenue in the short term. Boncore argued that they will continue to help manage the traffic jams as the economy recovers in the post-COVID period.
The fees were included in a much larger $ 16.5 billion transportation bill that approved borrowing for projects including the redesign of the roads around the Cape Cod Bridges, the massive rebuilding of the Massachusetts Turnpike at Allston, and the Electrification of some local transport routes as smaller initiatives such as paving highways and improving local public transport.
Legislators had not agreed for months on how much the state could afford to borrow. House negotiators argued that the state could only afford $ 14 billion without a gas tax hike. The Senate hoped to approve $ 18 billion but declined to consider a gas tax package that the House passed in March. By including the hail charges in the bill, the house could easily upgrade to $ 16.5 billion, said state representative William Straus.
Uber has shown some openness to hail charges increases in the past, but also warned that in a weak economy they would come at the expense of drivers.
On Wednesday, Uber spokeswoman Alix early criticized the legislature’s “last-minute draft”, arguing that it had “unintended consequences.” The deal could impose luxury fees on some regular, lower-cost UberX travel due to a technical problem in legal language, she said.
Lyft did not immediately respond to a request for comment.
The legislation also requires companies to provide much more detailed data on their trips to the state, a measure they previously opposed. The legislation also did not include a priority for companies to allow more flexibility in using price hikes during the pandemic. A previous law banned the state of emergency price hike, which was originally aimed at periods during snowstorms and natural disasters, but not long-term crises like the coronavirus pandemic.
The credit bill included some other changes to the transportation policy, such as:
- Lowering fines and preventing arrests for fare evasion on transit systems, a major priority for the MBTA, before moving to a new tariff system that requires more frequent tariff controls;
- Ask the MBTA to outline a clear plan for introducing a discount for low-income drivers, a long-known promise that has barely moved within the agency, particularly as fare revenues collapsed with the pandemic.
- Set up a new commission to study road charges and toll ideas as a strategy to reduce congestion in urban areas and to create an alternative to gas tax to finance roads when more vehicles switch to electricity;
- New requirements are set for moving vehicles involved in motorway accidents quickly from lanes to breakdown lanes in the hope of preventing traffic safety.
Adam Vaccaro can be reached at firstname.lastname@example.org. Follow him on Twitter at @adamtvaccaro.