Massachusetts Will Tax Uber to Subsidize Taxi Industry. That’s Absurd.

[EasyAce]

By Robby Soave
http://reason.com/blog/2016/08/22/massachusetts-will-tax-uber-to-subsidize

Uber and other ride-sharing apps are out-competing taxis by offering a better service. And the government doesn't like that
one bit.

Take the state of Massachusetts, which has decided to levy a 5 cent fee on every single trip arranged by a ride-sharing service. That
would be annoying on its own, but it gets much worse: the government will take the money generated from the fee and create a sort
of bailout or subsidy for the failing taxi industry. Massachusetts is robbing Peter to pay Paul, who also happens to be Peter's direct
competitor.

The irony is not lost on ride-sharing companies.

"I don't think we should be in the business of subsidizing potential competitors," said Kirill Evdakov, the chief executive of Fasten,
a Boston-area ride-sharing service, according to Reuters.

The fee was signed into law by Gov. Charlie Baker, another Republican politician with a shaky understanding of what constitutes a
truly free market.

The state's "MassDevelopment" agency—a crony-corporatist sinkhole of misappropriated funds, if ever there was one—will be
responsible for figuring out how to spend the money to best help the taxi industry. One idea is to help taxis "adopt new technologies,"
which probably means using an app to hail a cab. So Massachusetts is robbing Peter to pay Paul so that Paul can learn how to
do the thing Peter already does.

Ride-sharing services have little choice but to accept the fee: indeed, they practically have to thank the government for going
easy on them. The new law is apparently some sort of compromise—taxi lobbyists wanted Uber banned outright.

Fees like this one are always and immediately passed on to the customer. Lawmakers, in their infinite wisdom, thought they could
prevent this by prohibiting ride-sharing companies from charging customers the 5 cent fee. Instead, the companies will pay the
government directly. Of course, this will never work in practice. Uber et al will simply find some other excuse to adjust their prices
in order to absorb the fee.

Taxing Uber to save taxis is economic idiocy, plain and simple. There's just no good reason for the government to prop up firms
that can't succeed in the marketplace on their own: particularly if the government is going to sabotage more successful firms in
order to protect the outdated ones. That's something the 19th century French economist Frederic Bastiat understood when he
wrote the "Petition of the Candlemakers," a satire of the exact kind of rent-seeking behavior now being employed by taxi
companies. The petition concerns a fictitious group of candlemakers who are asking the French government to block out the sun
on grounds that it provides unfair competition. The economy would be improved, the candlemakers argued, if the sun could no
longer provide light to everyone free of charge—this would create more customers for candlemakers, and thus generate more
economic activity.

The argument is nonsense, as Bastiat well understood, because even though the sun's light injures the economic prospects of
one rival industry, it increases the economic opportunities for everyone else by liberating them from the financial burden of
buying so many candles.

If Bastiat were alive today, he might very well have written "The Taxi Driver's Petition Against the Ride-Sharing App." Nearly 200
years later, governments are still committing the same basic errors of economic reasoning.

Never fails. Build a better mousetrap today and the cats will gang up on you.

[geronl]

Baker became Governor because he was more leftist than the Democrats

He is so left on gay rights he might as well call for mandating sodomy in schools

But he has an R next to his name, so it's all good - right Trumpers? Isn't that all that matters?

[Ghost Bear]

I really need to re-read "Atlas Shrugged", I swear something like this happened in that book...

[The_Reader_David]

This is a perfect (and rather extreme) example of the distinction between pro-business and pro-market.  It is very rare for moneyed interests to not want the state to create an environment that props up their business and suppresses competition -- be they taxi companies, the recording industry, academic publishers, or "green" energy firms.   The government of Massachusetts is taking a pro-business stance here by supporting incumbents in the market.

This distinction is, incidentally, one reason the left so vehemently hates the Koch brothers -- almost alone among moneyed interests, they champion pro-market positions and actually oppose a lot of pro-business legislation.  Taking a pro-business position allows you to be coopted by anyone willing to use state power on your behalf, and thus by the left (or the nationalist-populist right, or any other political faction willing to replace the market with the judgements of legislators and bureaucrats).

[XenaLee]

This is a perfect (and rather extreme) example of the distinction between pro-business and pro-market.  It is very rare for moneyed interests to not want the state to create an environment that props up their business and suppresses competition -- be they taxi companies, the recording industry, academic publishers, or "green" energy firms.   The government of Massachusetts is taking a pro-business stance here by supporting incumbents in the market.

This distinction is, incidentally, one reason the left so vehemently hates the Koch brothers -- almost alone among moneyed interests, they champion pro-market positions and actually oppose a lot of pro-business legislation.  Taking a pro-business position allows you to be coopted by anyone willing to use state power on your behalf, and thus by the left (or the nationalist-populist right, or any other political faction willing to replace the market with the judgements of legislators and bureaucrats).

Which is.....exactly why this nation needs a true conservative or true conservatives in leadership positions, instead of the idiot leftists and/or liberals and/or faux righties (nationalist-populist right) that we have now.  Only then will we have leaders that want less and even less government in control.  And only then will the nation's economy have a chance to recover from the disease of leftism that has sickened it for the past decades.

[geronl]

Charlie Baker was the "lesser evil" apparently, but he was more liberal than the Democrats

[Crazieman]

I really need to re-read "Atlas Shrugged", I swear something this happened in that book...

I belive it was the railroad fairness act or something to that effect. Been a few years. I'm afraid to reread it at this point.

[Frank Cannon]

The state's "MassDevelopment" agency—a crony-corporatist sinkhole of misappropriated funds, if ever there was one—will be
responsible for figuring out how to spend the money to best help the taxi industry.

Awesome. This dumb bastard starts taxing even before they know what to do with the money. No concern whether it is too much or too little, as long as the winner is punished.

BTW, what's the bet that all this money goes to new govt' union jobs to oversee it and nothing goes to the failing cabs.

[geronl]

If Trump loses, I expect his followers will look at Charlie Baker as the next possible Trump Party candidate