Governor Charlie Baker is showing faith that at least one part of our old travel habits will return to near normal: calling an Uber and Lyft for a quick ride. In fact, he’s banking on it.
The governor is reviving an effort he floated in January, raising the state surcharge on each ride to $1, from the current 20 cents, plowing most of the proceeds that he estimates could total $83 million next year into public transit, with the remainder going to cities and towns. The proposal was included in the most recent version of a state budget plan Baker submitted to the Legislature.
When he originally proposed increasing the fee, Boston was suffering from chronic traffic congestion, with Uber and Lyft widely seen as major contributors. In 2019, there were an astounding 91 million ride hail trips taken in Massachusetts.
Of course, that has changed considerably since then, with the COVID-19 pandemic shuttering hundreds of thousands of commuters in their homes or out of a job and sidelining business travel. While updated figures for Massachusetts are not available, Uber and Lyft have reported in recent earnings statements that across the US, ridership has declined 75 percent and 60 percent, respectively.
Ali Mogharabi, who analyzes ride-hail companies for the investment firm Morningstar, said he expects ridership in 2021 to only reach about 69 percent of pre-pandemic levels.
But Baker is taking a more optimistic approach — at least in terms of budgeting. The funding is predicated on a forecast of 83 million ride-hail trips in 2021, or 90 percent of 2019 levels. The proceeds would be applied to the state budget for the period beginning next July 1.
As they did previously, the two ride-hail companies oppose raising the fee, this time arguing the higher costs will hit consumers and drivers at a time when the economy is in the dumps.
“Raising rideshare taxes by over 400% during the pandemic is counterproductive and could hurt the very people we’re trying to help get through this terrible time," Lyft said in a statement.