We have underfunded our transportation needs for decades. In every corner of the Commonwealth, this leads to congestion, frustration, increased carbon emissions, negative health impacts, and stunted economic opportunities for our cities and towns. Now is the time for comprehensive solutions to our transportation crisis. We need a broad range of investments to get to the 21st-century system we need – and increasing fees on Transportation Network Companies (TNCs) like Uber and Lyft should be considered.
Legislators are currently debating whether and how much to raise TNC fees. There are multiple proposals on the table and it’s hard to easily compare what these new scenarios mean for revenue.
To make it easier on ourselves – and everyone else – MAPC created a tool to help calculate the revenue generated by these proposals and more.
Why Raise Fares?
Rideshare trips are an increasingly significant part of our transportation network. In 2018, Massachusetts saw 81 million rideshare trips, up 25 percent from 2017. Many of these trips occur at peak commuting times and represent a shift to an auto trip for people who would have otherwise taken public transit, especially the bus. With this shift away from more sustainable modes of transportation, MAPC estimates that rideshare trips consumed over 18 million gallons of gas and produced 163,300 metric tons of CO2 equivalents in 2018 alone. Simply put, unchecked growth in rideshare will make it hard for us to reach the state’s climate goals.
Currently, Massachusetts levies a 20-cent fee per trip to account for these impacts, raising $16 million in 2018. This fee is less than that in comparable cities, including Seattle, New Orleans, Portland, and Chicago:
The current fee is distributed between the city or town where rides originated (50%), the state's transportation fund (25%), and MassDevelopment - to offset the impacts of TNCs on the taxi and livery industries (25%).
Cities and towns can use their portion of the funding ($8 million in 2019) to repair transportation infrastructure or to support Complete Streets programs and other programs that support alternative modes of transportation. Some innovative ways municipalities have been spending their money include:
- Arlington ($25,813): Permanent bus rapid transit lane
- Carver ($148): Free rides for seniors to museums and other cultural venues
- Lowell ($49,039): Bicycle master planning and Complete Streets improvements
We need to price ridesharing more fairly and encourage passengers to take shared rides or public transit. Money raised from TNC trips could help raise significant new money to improve transit service across the Commonwealth and can continue to give cities and towns sources of funds for innovative transportation investments.
In order to make informed decisions about how to structure a TNC policy that generates revenue and encourages use of more sustainable travel modes, it is important to have robust TNC data sharing requirements. Right now, a lot of the data we have on TNCs in our state is anecdotal or incomplete: we are operating without detailed information. Other cities like Chicago and New York have required data reporting to shape local mobility planning and goals. Any legislation changing the TNC fee structure should also include data-sharing requirements, so we can get the detailed information needed to see the impact TNCs are having on our transportation system, and plan accordingly.
The Tool
Check out the TNC Revenue Calculator tool embedded below or download an excel version here. There are two calculators--one crunches the numbers for flat fee scenarios and the other calculates percentage-based fees.
Here's how to use the TNC Revenue Calculator:
- Click "Yes" to activate a fee, then choose how much charge.
- Choose to charge a uniform fee per trip, charge more for solo trips than for shared trips, or charge for only a subset of trips.
- Choose the fee or percent to charge.
- Choose additional assessment criteria, based on existing legislative proposals, by advocates, or in other states:
- Do you want to charge a fee if the user is traveling during peak traffic hours?
- Do you want to charge a fee for using a premium vehicle (Uber Black or Lyft Lux)?
- Do you want to charge a fee if a trip originates in the MBTA service area during peak hours?
- Do you want to charge a fee if a trip originates in the MBTA service area while the T is running?
- Do you want to charge TNC companies for every mile traveled without a passenger?
- See the total revenue generated per year!
- Now, distribute that revenue. What percentage should go to the state? To municipalities? To the taxi/livery industry? (These are the recipients of the current $0.20 fee.)
- How much more or less does your fee structure raise than revenue in 2018? Check it out (and share it with us on Twitter, if you’re so inclined).
Try out MAPC’s fee proposal: charging a percentage-based fee for trips: 6.25% for solo trips (the same as the state sales tax) and 4.25% for shared trips.
Without any additional fees, this would raise almost $62 million to distribute between the state, municipalities, and taxi/livery industry: $45.5 million more than 2018 revenue.
What if we charged an additional $2.40 to trips originating in the MBTA core service area during peak hours? We would raise an extra $35 million for a total of $96.5 million.
Now, try with your own idea!