August 23, 2016

Transportation Taxation Without Representation

Michael D. Farren

Research Fellow
Summary

At best Massachusetts' ride-hailing legislation represents a step sideways, not forward … it perpetuated the same sort of stale regulatory structure that has kept the taxi industry from innovating since the Great Depression. Even worse, Massachusetts stuck the rest of the nation with the bill for appeasing taxi interests. Taxation without representation, indeed.

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Earlier this month, Massachusetts became the 35th state to pass ride-hailing legislation to regulate so-called transportation network companies like Uber and Lyft. Much of the law is the same standard boilerplate used by other states, but Massachusetts' law has some new and frustrating twists.

Gov. Charlie Baker, who first proposed the legislation, said that it would ensure that Massachusetts remained a leader in innovative new technologies, but the governor and the Massachusetts legislature missed a major opportunity to be truly innovative. The Massachusetts law prohibits local jurisdictions from implementing their own licenses for ride-hailing firms or requiring them to pay fees – but it could have done the same for taxicabs and limos and applied the same regulations to all transportation service providers.

For example, Fort Worth, Texas and Melbourne, Florida recently enacted laws that more or less apply equally to all for-hire drivers. Instead of following their lead, Massachusetts' law simply offers another carve-out for a specific kind of service provider in the transportation industry, rather than creates a truly level playing field for all transportation services.

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