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Uber and Lyft fees might increase in Massachusetts — but to what end?

Massachusetts lawmakers and Governor Charlie Baker are considering increased fees on Uber and Lyft rides.Lane Turner/Globe Staff/file

The state fees attached to your Uber and Lyft trips may go up soon, with both Governor Charlie Baker and Massachusetts lawmakers eyeing the levy as a way to raise money for public transit and local roads.

But is that the only reason to raise those ride-hail fees, or should they be used more creatively to fight traffic jams? It’s a version of a certain vintage of debates about government taxes in general: is the goal just to raise and spend money, or to change people’s behavior?

With Boston gripped by gridlock, some transportation experts say that when it comes to Uber and Lyft, it should be the latter.


"It would be a missed opportunity to simply go with a higher flat fee,” said Jascha Franklin-Hodge, a former aide to Mayor Martin J. Walsh of Boston who now runs a nonprofit focused on transportation data. "We should be using pricing as a tool to achieve other policy goals.”

In 2016, Massachusetts became one of the first jurisdictions to slap a government fee on ride-hail trips, requiring the companies to pay 20 cents a ride as part of the law requiring drivers to undergo background checks.

Since then, Uber and Lyft have grown ubiquitous across the United States. Officials in other regions have become cognizant of their impact on urban congestion, and have gotten more aggressive — and creative — with how they assess the fees on those services.

New York and Chicago, for example, structure their fees to fight traffic or otherwise shape rider behavior:

• Fees are higher in central areas with a lot of public transit, and lower in those areas with fewer options. Chicago charges $3 for rides in its downtown, and $1.25 elsewhere, while New York imposes a hefty $2.75 fee south of 96th Street in Manhattan.


• Solo riders pay higher fees, while riders who carpool pay less because shared trips cut down on traffic in congested cities. In that part of Manhattan where the fee is $2.75, those who share a ride only pay 75 cents.

• Chicago’s heightened fee is in place from 6 a.m. to 10 p.m., so late-night bar patrons aren’t encouraged to drive their own cars home.

But it’s unclear whether Massachusetts will follow their lead. Baker’s proposal, filed in January as part of his annual budget recommendation, was simple and blunt: an across-the-board hike of the 20-cent fee to $1. His administration’s focus was not attempting to shift rider behavior, but to raise money to help fund the MBTA, with some of the fee revenue also going to cities and towns.

Uber and Lyft said different types of trips — such as those in areas without public transit or when transit service is closed — should be treated differently by regulators. But the companies also argue that in fighting congestion, lawmakers shouldn’t just target ride-hailing services; delivery trucks that block traffic and even solo commuters who drive into Boston each morning should face new rules or fees.

“Designing a ride share-only tax is like trying to paint a house with a toothbrush,” said Uber spokeswoman Alix Anfang. "The only way to fully fund mass transit and reduce congestion is by charging all users of the most congested roads.”

The argument over ride-hailing fees is a microcosm of the broader debate over whether transportation funding should be used to simply pay for services, or to spur changes in how travelers get around. Lawmakers in the House of Representatives have pledged to debate a transportation funding bill that could include increases in the gas tax and higher ride-hail fees, by spring. They may also give consideration to new tolling or even eventually replacing the gas tax as electric vehicles become common.


Polling has long shown that Massachusetts residents favor taxes on developers, corporations, and millionaires to fund the transportation system but are more resistant to fees that would impact their own wallets. And some progressive groups and lawmakers say transportation should be funded in large part by increased corporate taxes.

But economists and transportation advocates often say transportation fees should be used to induce behavior change, encouraging public transit and discouraging the kind of traffic congestion that slows Boston.

"We think it’s really important that what the House puts out include tools that create better incentives throughout our transportation system,” said Chris Dempsey, director of the nonprofit Transportation for Massachusetts. "If you look at what we’ve done with the gas tax versus MBTA fares since 1991, fares have gone through the roof [increasing by more than 200 percent], while the gas tax is up 14 percent.”

Leaders in the state Senate have indicated they see this as a crucial way of thinking about transportation finance, with the chamber’s president, Karen Spilka, recently saying some new funding should be used to lower transit fares.


In the House, Representative William Straus, cochairman of the Legislature’s Joint Transportation Committee, said he’s more focused on raising money to fix the region’s aging transit infrastructure. Using money — including variable ride-hailing fees — to influence travel behavior, he said, is a secondary consideration.

“If you did a variable rate — and that hasn’t been ruled out — you are stepping into that area of behavior,” Straus said. "And these are classic tax debates as to whether a tax system has one goal, to raise money, or is also designed to incentivize different behavior.”

However, Representative Aaron Michlewitz, who chairs the House Ways and Means Committee and who led negotiations on the 2016 ride-hail law, said a variable fee based on solo or shared trips is "on the table.”

"Not all trips are the same and they each have different impacts depending on a lot of factors,” he said. "And when we’re talking about raising the fees, we have to take that into consideration.”

Without other changes to state law, using ride-hail fees to influence how riders get around may prove difficult. Currently, Uber and Lyft are required to pay the 20-cent fee; they cannot pass that cost onto riders. The Greater Boston Chamber of Commerce, which wants the state to use variable rates, noted that using the fee to give riders different incentives would require riders to actually feel and see the effect of the fee. The fee must also be large enough to matter; some transit advocates have recommended that it should start at $1.70, the same rate as a bus fare on the MBTA.


Massachusetts Department of Transportation spokeswoman Jacquelyn Goddard said Baker’s proposal would still require the companies to pay the fee, not riders.

The state also may not know enough about how people use ride-hailing to implement more sophisticated fees, said Eric Bourassa, transportation director for the Metropolitan Area Planning Council, a regional agency. Uber and Lyft provide limited data about where and when trips occur in Massachusetts, whereas Chicago and New York require them to report more detailed information.

"If we had that data, we could create . . . policies to shape [ride-hailing] so it’s supporting our mobility goals,” Bourassa said.

He contends the state should consider differential fees because shared trips almost always cut down on congestion. Even so, he added, just raising fees across the board to pay for infrastructure fixes would still be a net positive.

"Our fees are low compared to other states and regions,” Bourassa said. "There’s a lot of these trips and there is an impact, and we should increase that fee to support transportation.”