Boston Mayor Marty Walsh wants to increase fees on Uber and Lyft rides, with the aim of reducing congestion, cutting emissions, and raising money for local governments.
Walsh made his case at a State House hearing last Tuesday (July 23), as lawmakers consider how and whether to further regulate ride-hailing services.
Uber, Lyft and other ride-hailing companies currently have a 20-cent per ride fee under state law. The revenue from that fee — which totaled about $16 million last year – goes to local governments, the state’s transportation fund and the taxi industry. Boston alone took in more than half of the money allocated for cities and towns — $3.5 million of the $6.5 million raised.
But Walsh said that revenue “doesn’t go far enough” for transportation investments. So he’s pushing two bills that would change the fee on ride-hailing services to 6.25 percent, the same as the state’s sales tax. That would mean a 62-cent fee on a $10 ride.
Shared rides, or trips in zero-emission or electric vehicles, would have a 3 percent fee. There would also be a 20-cent fee for each mile a ride-hailing vehicle travels without a passenger inside during the morning and evening rush hours. Zero-emissions vehicles would be exempt from the fee.
Walsh said the legislation would encourage carpooling, reduce emissions, and help cities and towns improve transportation.
“This is about tackling traffic issues, it’s about tackling the environment, and it’s also about making additional revenues we can reinvest,” Walsh told lawmakers. “All the money that we’re getting from transportation, we’re reinvesting back into transportation.”
In a statement, Lyft said the idea that fees would solve the state’s transportation challenges is “misguided. Increasing the cost of rideshare could lead more people to drive their own cars, which would increase vehicles on the road,” spokeswoman Campbell Matthews said. “To truly have an impact on congestion, it’s critical that lawmakers apply any proposed solution equally to all vehicles, including personal and commercial.”
Uber spokesman Harry Hartfield said in a statement that the company supports Walsh’s efforts to reduce traffic but, he added, “rideshare vehicles represent a small fraction of cars in Boston and new taxes targeting rideshare customers punish Bostonians who don’t have a car while doing little to invest in much needed improvements to transit.”
When asked about supporting a similar fee on other vehicles traveling during rush hour — known as congestion pricing — Walsh demurred, calling it “a different situation.” He said he’s focused on ride-hailing companies.
Ride-hailing has exploded in popularity. More than 81 million ride-hailing trips were taken in Massachusetts last year — a 25 percent increase from the year before.
A report last year by the Metropolitan Area Planning Council, which has helped craft other transportation legislation, found that ride-hailing services have exacerbated traffic congestion in Greater Boston.
They’re also contributing more emissions, according to MAPC. A report released Monday found that services like Uber and Lyft consumed the equivalent of over 18 million gallons of gasoline in 2018.
“It’s important to know what their greenhouse gas implications are because the trips are only going up,” said MAPC’s director of government affairs Lizzi Weyant. “And that’s particularly true outside of the inner core of Boston. We’re actually seeing an increase in [ride-hailing] trips from the more commuter rail type communities.”
There are several other bills pending at the State House that aim to increase fees on ride-hailing as well as impose other regulations related to insurance, emissions and safety.
The legislation Walsh is supporting also calls for more data to be collected from ride-hailing companies, something Governor Charlie Baker is pushing for in his own legislation.