The taxi industry is trying to hang on to some sort of relevance. Without the use of force (government) and lobbying (politicians), the cab industry would already be extinct. Uber and Lyft are the more popular choices among consumers, but the state and taxicabs won’t permit that to happen.
As part of another way to extract money from the ride-hailing industry, the state of Massachusetts will institute a 20-cent tax per Uber and Lyft trip. What makes this very interesting is the fact that five cents of each trip will go towards subsidizing the cab industry.
Moreover, 10 cents will be transferred to cities and townships, while the remaining nickel will go towards a state transportation fund.
Massachusetts Republican Governor Charlie Baker believes the purpose behind the tax is to enable taxi companies to install new technologies in order to improve service, operations and safety. He signed the legislation earlier this month as part of an array of regulations for the ride-sharing industry.
This is a direct comparison to robbing Peter to pay Paul, though Paul is Peter’s primary competitor. Oh, the irony!
“I don’t think we should be in the business of subsidizing potential competitors,” Kirill Evdakov, the chief executive of Fasten, a ride service that launched in Boston last year and also operates in Austin, Texas, told Reuters.
Of course, the taxi industry was quick to defend the measures. Larry Meister, manager of the Boston area’s Independent Taxi Operator’s Association, told the newswire that Uber drivers have been breaking the current laws, and that registered cab drivers have been following these laws for many years.
What he tends to forget is that many of these taxi company owners helped write the laws by influencing politicians. These laws are meant to keep out competition and prevent newcomers from coming in. Legendary free market economist Walt Williams and host John Stossel tackled this issue a few years ago:
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