Massachusetts has come up with a new way of supporting the traditional taxi industry in the state as it comes under increasing pressure from ride-sharing services like Uber and Lyft. The state has decided to tax ride-sharing services and spending whatever it brings in from that tax on the traditional taxi industry. This appears to be the first such subsidy of its kind for the taxi industry in the United States.

Massachusetts is going to levy a 5-cent fee per trip on rides booked using services like Uber and Lyft. Governor Charlie Bake has already signed the fee into law.

Many taxi owners believe that the law should be strict for these services and suggest that ride-sharing services should be banned unless they meet the same requirements that taxis have to, requirements including regular vehicle inspection by the police.

The ride-sharing industry is obviously not thrilled by this move, even though the law states that this tax will enable traditional taxi businesses to adopt “new technologies and advanced service, safety and operational capabilities” while also supporting workforce development.

It’s interesting to mention here that the mandates this 5-cent per ride fee be paid by the companies themselves and not be passed on either to the drivers or the riders. As it currently stands, the law mandates that this 5-cent per ride fee be collected through to the end of 2021. It will eventually go away by the end of 2026.

Filed in Transportation. Read more about and . Source: reuters