In what appears to be a first for the US, Massachusetts is getting ready to apply a five-cent fee per trip on ridesharing services such as Lyft and Uber, and spend the money on regular taxi services.

Massachusetts Gov. Charlie Baker (R) recently signed bipartisan legislation creating a statewide regulatory framework for transportation network companies (TNCs).

“I am pleased to sign bipartisan legislation to ensure Massachusetts remains a leader for innovative new technologies, with safe and diverse transportation options and opportunities for hardworking individuals to earn a living,” said Governor Baker in a press release.

“This regulatory framework includes many of our own proposals to embrace disruptive technology and prioritize public safety to give consumers safe and reliable travel choices,” he added.

The legislation, An Act Regulating Transportation Network Companies H. 4570 lays out a number of provisions aimed at ensuring that ridesharing services such as Uber and Lyft can continue with their innovations and growth without crushing restrictions.

In addition, the legislation will establish a “ride-for-hire task force” to examine current regulations guiding taxis and other similar service providers.

A provision would enact a $0.20 per-ride charge on all TNC trips. 25 percent of all revenue from that will go towards providing financial reprieve for traditional taxis, and is an unprecedented move for regulation of the transport services industry.

The assessment is projected to generate an estimated $3-6 million per year.  

In essence, the $0.05 per-ride assessment will fund the very taxis ride-hailing services are competing against. Critics see this as a bad precedent which rewards businesses for stubbornly clinging to old models instead of flowing with innovation.

On the other hand, the law also allows ridesharing services pick up customers from traditional taxi ports, including airports and convention center.

H. 4570 also includes the strongest state background check requirements in the nation, including a full state Criminal Offender Record Information (CORI) background check, sex offender registry status, and a bi-annual national commercial background check.