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Why won't Boston lower taxi fares?

Posted by Rob Anderson  March 25, 2011 05:03 PM

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cabs.JPGIf you've ever paid for a taxi in Boston and thought, "This has to be the most expensive cab I've ever taken," you were probably right: For most trips, Boston has the highest cab fares of any comparable city in North America. An editorial today presents three initiatives the city could take on to lower fares: get rid of its archaic regulation system; create a regional taxicab authority; and pressure credit card processing companies to lower their exorbitant rates.

So why hasn't the city already carried out any of these reforms?

That's the question I wanted to ask Mark Cohen, director of licensing for the Boston Police Department and the chief taxi regulator for the City of Boston. But Cohen won't answer my calls, for a reason that's beyond me. Fortunately, two other reporters have gotten the chance to ask Cohen similar questions in the past. His answers have boiled down to two basic arguments: that making reforms would financially harm the people who own Boston's limited number of taxicab licenses, also known as "medallions"; and that, in any event, laws block the city from getting rid of the current regulation system.

Let's take a look at Cohen's arguments in more detail.

Argument one:
Back in 2006, Boston magazine published an interesting look at the people who own Boston's taxicab medallions, the licenses which permit cabs to operate in the city. In that piece, Cohen was quoted saying this:

Asked about proposals from free-market advocacy groups that the medallion system be scrapped, Cohen replies, "If people in think tanks can come up with a way to look a guy in the face who's been driving a cab for 15 years in order to pay off a medallion and say, 'Tomorrow, we're going to yank that all away from you,' I'd like to hear it."

Today's editorial does offer a solution to Cohen's conundrum: "increase the number of medallions by at least 2.5 percent every six months over the next five years." That schedule "would allow the market to adjust gradually," or, in other words, give medallion owners enough time to rethink and restructure their investments. True, most medallion owners would end up losing some money — but someone has to lose something if the system is ever going to be reformed. It's regular Bostonians who are getting the short end of the stick today; maybe it's time for the medallion owners to take on that burden.

Argument two: In a later interview with a reporter from WBUR, Cohen argued that it would actually be against the law for the city to devalue its medallions:

Why can’t [Cohen] just just wave his hand and say “from this day forth, no medallion required”?

“It’s an issue of property,” Cohen explained. “When they decided to have taxi medallions be worth something, the state cannot step in and just take it away because it seems like a good idea."

Today's editorial explains why Cohen's legal reasoning isn't sound: According to Lee McGrath, an attorney who successfully defended Minneapolis’s 2007 effort to deregulate its taxicab industry, federal law would allow Boston to increase its number of medallions, which would drive down the value of the existing ones. In other words, contra Cohen, the city has the right to get rid of its regulatory system by flooding the market with new medallions.

So what's left? In that same interview, Cohen offered one more reason why he can't " wave a magic wand, do away with the medallion system and maybe even unite Boston, Cambridge and Brookline in a regional taxi authority":

“These are pipe dreams. When you have an industry that has rules that go back to 1931, to try to put the horse back in the barn on this thing is exceedingly difficult.”

If Cohen's best excuse really is that the rules would be difficult to change because they were written 80 years ago, the city's case for inaction looks exceedingly hard to defend.

Globe file photo: Cabs wait to pick up passengers on Belvidere St.

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ABOUT THE ANGLE Online commentary and news analysis from the Boston Globe. The Angle is produced by Rob Anderson and Alan Wirzbicki. You can follow Rob on Twitter at @rcand.

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