A new set of fees for Uber and Lyft rides could generate an additional $95 million a year to fund transportation initiatives, including $25 million for the MBTA, according to an analysis by a planning agency.
The state Legislature in early January adopted a new fee structure for ride-hail trips in Massachusetts would boost the current 20-cent rate to $1.20 on typical rides and 40 cents on carpool-style shared trips, with an extra 20 cents for trips in Boston and 13 nearby communities. Luxury trips, such as UberBlack, would face an additional $1 fee
The previous flat 20-cent-per-ride fee raised more than $18 million on some 91 million trips in 2019, before the pandemic radically reduced the amount of rides people took. But if ridership returns to 2019 levels, the higher fees would generate a total of roughly $112.5 million a year, according to the Metropolitan Area Planning Council, a regional agency in the Greater Boston area..
There is, of course, little certainty that ridership will return to those levels in the short-term, with infection levels remaining alarmingly high. But even at just half of 2019′s ridership, MAPC projected the new fees would generate about $56 million in revenue.
Advertisement
“I think this is a significant new transportation revenue source,” said Eric Bourassa, MAPC’s transportation director. “It is not the be-all, end-all to our transportation finance challenges, but it is a really significant increase.”
Several entities would share the windfall. At full ridership levels, the MBTA would likely receive up to $25 million, MAPC said, while the state’s smaller regional transit systems would get $11.8 million. The cities and towns where trips begin, which are overwhelmingly located in Greater Boston, would split $26 million under that scenario, while the state’s transportation fund would see an influx of more than $43 million. The law also calls for a $6 million annual infusion for a fund to aid taxi and livery companies, which was first established under the old fee structure.
Advertisement
The numbers could fluctuate for reasons even beyond ridership. For example, lawmakers adopted the lower fee for shared trips to convince more people to carpool. If riders shifted to more shared trips, it would generate less money — but come with the benefit of fewer cars on the road.
The bill is still awaiting Governor Charlie Baker’s final signature. Baker has made his own support for boosting ride-hail fees clear. The idea gained political consensus as Uber and Lyft shouldered some of the blame for the maddening congestion that clogged Boston’s roads prior to March 2020, and it did not go away even as the traffic receded with the pandemic.
Lyft has declined to comment on the legislation. Uber has been mostly muted on the fees, but suggested that all drivers, and not just ride-hail services, should face increased fees to adequately fund the transportation system and limit congestion.
Between the ride-hail fees and an upcoming cap-and-trade system on transportation fuels that was championed by Baker, Massachusetts officials approved hundreds of millions of dollars in new transportation revenue in recent months, even after lawmakers dropped an earlier proposal to raise the gas tax by 5 cents.