Uber, Lyft riders subsidize taxi, livery firms

For every Uber and Lyft ride in Massachusetts, the state collects an extra 20 cents. Half of the 20-cent fee is split among municipalities based on where the rides originate, 5 cents goes to a state transportation fund, and 5 cents goes to MassDevelopment for a program to support taxi and livery services across the state.

The MassDevelopment program is an unusual idea – using funds collected from Uber and Lyft riders to help businesses devastated by Uber and Lyft. It’s unclear whether the money provided by Uber and Lyft riders is actually building a stronger taxi and livery industry in Massachusetts or merely propping up an industry dependent on handouts from the rideshare industry.

More than $15 million has been collected from Uber and Lyft riders since 2017, with $6.8 million going directly for equipment and training to support taxi and livery businesses and $8.3 million going to subsidize taxi and livery rides for various organizations.

The most recent round of awards announced this week totaled $7 million, with $2.4 million going directly to support 88 taxi and livery businesses and $4.6 million going to 42 regional transit authorities, towns, and human service agencies that contract with taxi and livery companies to provide free transport services.

Green Cab Co. of Somerville benefitted from both programs, receiving $34,320 directly and pocketing $70,000 to provide free rides arranged by Somerville-Cambridge Elder Services.

In previous award rounds, Green Cab received $50,000 directly and collected more than $180,000 providing free rides for Somerville-Cambridge Elder Services, the city of Somerville, and the Somerville Council on Aging.

JFK Transportation of Natick and Tommy’s Taxi of Framingham received no money directly under the program, but the two companies were contracted to provide the transportation for free-ride programs in Natick, Sudbury, Sherborn, Wayland, and Weston.

The Julie Fund in Wellesley received $250,000 in this week’s round to hire a company called Above All Transportation to provide women with free rides to cancer treatments. And Open Sky Community Services in Worcester received $250,000 to hire J.C. Rides to provide free transport between the Oasis resident program in Douglas to substance use disorder treatment centers in Webster and Worcester.

Other big winners in the latest round included the Greater Attleboro Taunton Regional Transit Authority, the Boston Health Care for the Homeless Program, the Cambridge Public Health Commission, the city of Marlborough, and the Montachusett Regional Transit Authority.  Each of them received $250,000 to oversee free transportation programs.

The amount of money available under the program declined sharply during the coronavirus pandemic as the number of rideshare trips declined. There were nearly 65 million rideshare trips in 2017, rising to a peak of 91 million trips in 2019. But the number of trips plunged to 35 million in 2020 before rebounding slightly to nearly 40 million in 2021.

Dan Rivera, the president and CEO of MassDevelopment, issued a statement indicating he thinks the money being provided by Uber and Lyft riders is making a difference. “This funding will help taxi, livery, and hackney companies purchase equipment they need to thrive and will support local organizations like senior centers and human services providers that partner with these small businesses,” he said.




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