Uber, Lyft too big to ignore
In Massachusetts transportation circles, Uber and Lyft are becoming simply too big to ignore.
According to documents Lyft filed in preparation for its initial public stock offering, the company is growing at an astounding rate. In just the last two years, revenue jumped from $1.1 billion in 2017 to $2.2 billion in 2018. The number of trips provided by the company soared from 376 million to 619 million. Uber is experiencing similar growth on an even larger scale. (Both companies also continue to lose large amounts of money – Lyft lost $911 million in 2018.)
There’s no breakdown for what’s happening in Massachusetts, but it’s a good bet the ride-hailing apps are experiencing similar growth here. In 2017, the apps provided a total of 65 million trips in Massachusetts. The number of trips probably topped 100 million in 2018, assuming the pace of growth in Massachusetts tracks what’s happening nationally.
The Baker administration has taken the view that the rapid growth of the ride-hailing apps is nothing to worry about. Transportation Secretary Stephanie Pollack has said Uber and Lyft are giving people transportation choices. Instead of taking the Red Line to work every day, she says, many riders are taking an Uber when it rains, riding their bike when it’s sunny, and working from home occasionally. Ridership on the T is down, but she says that’s less concerning because customers are benefiting from having more choices.
Until recently, the city of Boston held the same view. But Boston Mayor Marty Walsh’s administration is now in favor of assessing higher fees on the ride-hailing apps. “While certainly [ride-hail companies] are creating value for our constituents, and people are using them significantly, they are also putting more cars on the street during rush hour, they are taking revenue away from the MBTA, and they’re resulting in greater emissions in the Commonwealth,” Chris Osgood, Boston’s chief of streets, told the Boston Globe in January.
Lawmakers are also jumping on the bandwagon. Rep. Adrian Madaro of East Boston and Sen. Joseph Boncore of Winthrop, the Senate chair of the Legislature’s Transportation Committee, have filed legislation to boost fees on ridesharing trips (currently 20 cents a ride) and specifically on vehicle trips to and from the airport without passengers. Madaro said he wants to “level the playing field” for all transportation options, but Uber has complained the proposal would give Massachusetts the highest “tax” on ride-sharing in the nation at an average of $3 per ride.
At Monday’s meeting of the T’s Fiscal and Management Control Board, director Brian Lang argued forcefully for higher fees on ride-hailing apps. During a discussion about a proposed fare increase at the T, Lang said the transit agency shouldn’t be raising rates in isolation. He called on political leaders to consider higher fees on ride-hailing apps as well as a hike in the gas tax and congestion tolling. He said his approach would provide financial support for the MBTA while discouraging riders from getting into cars.
In a discussion about the T’s efforts to attract more college students as riders, Lang made clear the playing field between the transit agency and ride-hailing apps (which he called TNCs, or transportation network companies) needs to be leveled. “As long as Uber and Lyft are allowed to go unfettered, particularly in our city, we’re never going to be able to compete with them,” he said. “To me, it’s a travesty that the TNCs operate unfettered and that there’s no public reward for the way they’re operating.”
While the calls for increasing assessments on Uber and Lyft are increasing, it’s still a delicate dance for politicians who want to rein in the rapid growth of ride-hailing apps while not offending the legions of customers who have come to rely on them. In the public filing for its initial stock offering, Lyft acknowledged the stakes are high as airports, municipalities, and states are placing more and more restrictions and fees on the company’s operations.
“These jurisdictions and governmental entities may reject our applications for permits or deny renewals, delay our ability to operate, increase their fees or charge new types of fees, any of which could adversely affect our business, financial condition, and results of operations,” Lyft said.
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