Massachusetts Governor Charlie Baker just signed into law a new fee that will be levied on ride sharing companies like Uber and Lyft. Five cents of every 20 cent fee will go to a subsidy for traditional taxi services. The rest of the fee will be split among local municipalities and public transportation. This is the first fee of its kind in the United States.

This small fee could be a major boon for the ailing taxi industry, making millions every year. Lyft and Uber serve a combined 2.5 million rides per month in the state.

Some ride sharing executives are not pleased by the decision. "I don't think we should be in the business of subsidizing potential competitors," Kirill Evdakov, the the CEO of ride sharing service Fasten, told Reuters.

Taxi associations, on the other hand, wish the law had gone further, possibly by banning the ride sharing services altogether. "They've been breaking the laws that are on the books, that we've been following for many years," Larry Meister, manager of Boston's Independent Taxi Operator's Association, said.

The fee is temporary, designed to scale itself back over the next few years. The five cent fee for the taxi industry will be collected until 2021. At that point, the 20 cent fee will be split between towns and cities and the state. The fee will go away altogether in 2026.

Officials hope that the fee will go towards needed improvements to taxi service, like a revamped smartphone app and driver hospitality training. "We definitely need some infrastructure changes," Meister said.

Source: Reuters

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