Congestion toll in Boston?

[DominusNovus]

A small number of taxi drivers mortgaged hundreds of thousands of dollars in order to buy into a cartel (medallion) that was guaranteed by the city/state. Uber/Lyft then came in with a legally questionable business model, but consumers liked it enough that the state made it legal. However this screwed the people who paid hundreds of thousands for medallions.

I don't have much sympathy for the large medallion owners, they used their political power to constrain the number of taxi licences and profit as a result. But for small time medallion owners I think it would make sense for some sort of bail out.

I have no sympathy for any medallion owners. They bought into a cartel, whether it was large or small. The state shouldn’t have encouraged such cartels in the first place, but tough shit to everyone involved. The only reason medallions were so expensive was because they were exploiting the consumers. It was immoral in the first place, so they’re reaping the economic consequences of that immorality.

Anyway, take that money, and make it possible for the T to use it, after the T proves themselves competent.

 

[JeffDowntown]

The rising price of rideshares will do the work of pushing more people into the transit system anyway, so I'm all for helping them along with this surcharge.

It's fairly well-reported by now that none of the big players in this sector make any money; Uber and Lyft use VC money to subsidize rides to pick up market share and choke out competition. Then they IPO (this is where we are now), so the original investors get paid back by passing the buck to the bigger fools who think any company with an app is a winner.

Eventually those left holding stock will demand that the companies finally turn a profit, and the companies are hoping that their customers are loyal enough to weather a permanent surge rate. They also juice their bottom line by squeezing drivers, but that's for another day.

Forget taxis, taxis are done. Throw them 10 cents, whatever, but they'll struggle to get out from under their medallions and as mentioned above, businesses live and die every day. It will be interesting to see what the break-even point for these companies settles at, and whether all the work of developing the app, growing into all these markets, etc. will have been worth it, or whether that number becomes close to or even higher per ride than what cab companies charge. And that's before any regulatory pressure to do things that transfer driver overhead to their ledgers. If they face any real demands to consider drivers as employees, the associated costs would be punishing.

We should remember that it is in these companies' interest establish a foothold and deprive us of many alternatives so that when the third phase comes and they're forced to hike prices or die, we're stuck paying because we have no choice.

I'm not even totally anti-ridesharing; it's obvious they're filling in the gaps between transit nodes and performing trips that are difficult in our hub-and-spoke system. But I'm totally okay with siphoning off their revenues to expand the public network.

Somewhere deep in the Uber and Lyft business plans is the premise that their business model is sustainable with autonomous vehicles -- no drivers required, dramatically reducing costs.

They are hoping that their Ponzi scheme for investors holds long enough to be the dominant players when autonomous vehicles become a reality.

 

[cadetcarl]

I'm bearish on autonomous vehicles in cities--I'd never say never, but if it's a race between self-driving cars and Uber and Lyft being in the ground, the latter feels more likely.

 

[JumboBuc]

Somewhere deep in the Uber and Lyft business plans is the premise that their business model is sustainable with autonomous vehicles -- no drivers required, dramatically reducing costs.

They are hoping that their Ponzi scheme for investors holds long enough to be the dominant players when autonomous vehicles become a reality.

Neither Uber nor Lyft falsely claim to be profitable, and neither fraudulently pays out equity to investors claiming that it's profit. So say what you want about Uber and Lyft but objectively they are not "Ponzi schemes."

 

[DominusNovus]

Neither Uber nor Lyft falsely claim to be profitable, and neither fraudulently pays out equity to investors claiming that it's profit. So say what you want about Uber and Lyft but objectively they are not "Ponzi schemes."

Lets not forget how long it took Amazon to be profitable.

 

[JeffDowntown]

Neither Uber nor Lyft falsely claim to be profitable, and neither fraudulently pays out equity to investors claiming that it's profit. So say what you want about Uber and Lyft but objectively they are not "Ponzi schemes."

They are honest about their current state of profitability. Future path to profitability, I would argue is murkier, more nuanced.

But they are using new investor's funds (IPO) to pay off old investors, with no clear path to profitability; which is kind of the fundamental nature of a Ponzi Scheme, albeit they are being open about it.

 

[tysmith95]

A Ponzi Scheme revolves around fraud. Uber and Lyft aren't committing fraud (that we know of). You could easily theorize that investors are foolish for valuing them so high, but it's not under false pretenses.

 

[DominusNovus]

They are honest about their current state of profitability. Future path to profitability, I would argue is murkier, more nuanced.

But they are using new investor's funds (IPO) to pay off old investors, with no clear path to profitability; which is kind of the fundamental nature of a Ponzi Scheme, albeit they are being open about it.

It really isn’t. A ponzi scheme uses such payments to perpetuate their fraud.

 

[JeffDowntown]

It really isn’t. A ponzi scheme uses such payments to perpetuate their fraud.

OK, I'll concede the point. What Uber and Lyft are doing is not out and out fraud. It is an open secret that their business model does not lead to profitability, because their costs per transaction scale directly with their transaction volume. So if you lose money on every transaction, you never make it up in volume.

So current and new investors are counting on them waving a magic wand someplace in the future and fundamentally changing their cost structure. Not fraud, but pretty sketchy. The odds are better in Vegas, and there the House always wins.

 

[bakgwailo]

Lets not forget how long it took Amazon to be profitable.

Amazon losing money is generally a rounding error (and Bezos giving the middle finger to investors). Uber is bleeding money.

 

[DZH22]

As a driver it would be a lot easier to stomach a 2-3 cent hike in the per gallon gas tax than most of these other alternatives. In fact, the best way to get it through would probably be something like "it's either this or the congestion pricing garbage" which could get very expensive and be full of unintended consequences. Considering how much gas fluctuates already, an extra 2-3 cents would not be noticed at the pump.

Create a 10% additional income tax for transportation and Manchester, NH (or Portland, or Providence, or anywhere not in MA) would probably become the biggest city in New England within 2-3 years.

 

[fattony]

As a driver it would be a lot easier to stomach a 2-3 cent hike in the per gallon gas tax than most of these other alternatives. In fact, the best way to get it through would probably be something like "it's either this or the congestion pricing garbage" which could get very expensive and be full of unintended consequences. Considering how much gas fluctuates already, an extra 2-3 cents would not be noticed at the pump.

A gas tax gives you revenue, but it isn't targeted at reducing downtown congestion. A gas tax could be a broad-based deterrent to driving, but it is so pitifully small that is isn't actually a deterrent at all.

2-3 cents per gallon increase is nothing. It's easy to stomach because it is minuscule. That is less than 50 cents per tank or just a couple dollars over an entire year. That would go completely unnoticed by the vast majority of people. A meaningful gas tax hike would be more like 20-30 cents per gallon or about $5 per tank. For downtown commuters, that is still way less than any congestion charge (you obviously get more than one trip per tank) and like I said above, it hits all the wrong people.

 

[bigeman312]

Create a 10% additional income tax for transportation and Manchester, NH (or Portland, or Providence, or anywhere not in MA) would probably become the biggest city in New England within 2-3 years.

A 10% additional income tax with no other changes in taxing or spending to offset the negative repercussions of that additional tax is ridiculous.

Claiming it would cause a non-MA city to become the largest city in New England in 2-3 years(!) is the most outrageous bullshit I've ever read on this forum. Do you really believe what you typed?

 

[fattony]

Look, the 10% tax thing is so ridiculous we really should not even be talking about. Let's just ignore that guy.

 

[bigeman312]

Look, the 10% tax thing is so ridiculous we really should not even be talking about. Let's just ignore that guy.

Good idea.

The beauty of a congestion charge (which isn't the be-all-end-all policy by any means), is that it actually taxes and discourages something drivers also hate: traffic.

As purely a revenue generating mechanism, it may not be the best one. But as a congestion discouraging mechanism, that right-to-the-source aspect is ideal.

Heck, it could theoretically be revenue neutral by lowering the taxes on the Pike to $0 at off-hours and still be a step in the right direction. I think we have too much congestion for a revenue-neutral policy to make any meaningful dent in congestion, but I think the truly congestion-busting aspect of a congestion toll is being lost in the weeds of discussing other forms of taxation.

 

[DZH22]

A 10% additional income tax with no other changes in taxing or spending to offset the negative repercussions of that additional tax is ridiculous.

Claiming it would cause a non-MA city to become the largest city in New England in 2-3 years(!) is the most outrageous bullshit I've ever read on this forum. Do you really believe what you typed?

If the 10% additional income tax ever passed, the state would empty out. Luckily, the tax itself would never ever happen. Frankly, the hypothetical tax is more ridiculous than the hypothetical consequences of such a tax.

 

[Arlington]

Note that Virginia scrapped its vehicle fuels excise tax and instead raised its income tax to pay for transportation. Low income rural drivers liked this in red districts, and high-income suburbanites like it as a way to fund improvements that would shorten their commute.

Politically it functioned a lot like a congestion tax, falling more heavily on Rich Urban people who also happened to be drivers or Transit users.

And that deal had widespread support and Virginia has not emptied out.

 

[DZH22]

And that deal had widespread support and Virginia has not emptied out.

By leaving out the actual percentage of the additional tax everything you said is pretty much meaningless in this discussion.

 

[Arlington]

By leaving out the actual percentage of the additional tax everything you said is pretty much meaningless in this discussion.

It isn't like anyone here was carefully doing an elasticity analysis on anything, so this discussion was already pretty meaningless, numerically. 10%...Biggest...2-3 years! LOL.

There are however some concepts around what is politically possible, including that rich people stuck in traffic will support paying more if it means traffic moves better. And in Virginia it was even a tax-first, build-later deal.

One correction: it was a targeted, regional sales, RE transfer, and vehicle sales/transfer taxes that more-than-replaced the fuel excise tax.

Poltical point remains: rich, congested regions (DC burbs and Norfolk area) were willing to pay more--partly targeted at home values and fancy cars...and even willing to lower taxes on lower income people...to get better transit and road funding

Here are the details:

* Multimodal

* $3.5 billion over five years

* Sales taxes: Directs .175% of existing sales tax revenues to transportation; raises sales tax by .3% with 1.25% of the increase dedicated to transit and passenger rail. (Statewide sales tax increases from 5% to 5.3%)

* Local taxes: Imposes mandatory taxes in two regions: in Northern Virginia, increases sales tax by .7% and adds 15 cent per $100 assessed value to real estate transfer tax along with a 2% increase in hotel tax); in Hampton Roads it increases sales tax by .7% and adds a 2.1% wholesale tax on gasoline

* Gas tax: Eliminates the cents per gallon tax on gasoline and diesel; adds a 3.5% wholesale tax on gasoline and 6% on diesel (wholesale tax increases by 1.6% in 2015 if the Internet sales tax ban is not lifted)

* Vehicle fees: Adds a $64 fee on hybrid vehicles and raises the motor vehicle sales and use tax by 1.15%

* Other fees: Direct a portion of internet sales tax receipts to transportation if Congressional ban is lifted, which would raise $1.13 billion over five years

Bolding Mine. In a very Purple state, they cut a deal targeted at stuff rich people in rich areas do, own, & buy/sell.

Also note that Virginia 'burbanites have effectively imposed a congestion charge on their interstates, as HOT (high-occupancy & toll) lanes have been overlaid on the entire URBAN Interstate system (I-66 & I-95/395/495) and the I-x64 loop around Norfolk.

The loophole? The HOT lanes are not considered part of the Interstate system, but they let the HOTs take all remaining space between the fences.

HOTs use dynamic pricing: it just keeps going up at congested times to scare users away, but drops to free or essentially free at off times. They use congestion pricing, which famously spiked to $40 to go 5 miles, to ensure that the roads always move freely.

The equivalent for Boston would be HOT lanes:
- Entire circumference of 128
- Median of 95 to Attleboro & NH state line
- Median of 93, entirely
- Median of MA-3 to new toll bridge to Cape Cod

And probably dynamic tolls on the Tobin & Sumner/Callahan and Pike inside 128.

 

[tysmith95]

Could HOT's take up already existing lanes? Or would it require highway expansion.

I wouldn't be surprised if HOT's on I-93 S from Medford to the Tunnel cost $40 to go 5 miles every morning, as traffic there is mental.