SOMEBODY IN the Boston taxicab business has to be making money, because the market price for a medallion - a transferable city license to operate a cab - is upward of $380,000. But most drivers of the city's 1,800-odd cabs don't own their own medallions, renting them instead for up to $77 a shift or $500 a week. The recent surge in gasoline prices only makes the numbers more forbidding.
The Boston Police Department, which has near-unilateral power over the taxi industry in the city, is now weighing proposals for a fare rate hike. Commissioner Edward Davis ought to grant one, because high gasoline prices seem unlikely to return to their former levels anytime soon.
But the rate hike shouldn't be unconditional. Cabs in Boston are already pricey, compared with other major cities. So any fare hike needs to be coupled with a broader review of the structure of the industry. A major obstacle to reining in fares is the high cost of renting medallions. The obvious question, then, is how the city might bring that cost down.
The Boston Taxi Drivers Association, a new union affiliated with the United Steelworkers, is asking Mayor Menino's administration to create a task force to consider reforms of the taxi industry. While the City Council has no direct power on the issue, council president Maureen Feeney is mustering support for such a task force as well.
There are no easy solutions to the spiraling cost of medallions. Increasing the supply would bring down the cost, but drivers are wary of more competition. Abolishing the medallion system would sting owner-operators who recently bought medallions at high prices. But the status quo is unsustainable, too. A task force would have to figure out how to make taxi fares reflect the cost of providing taxi service, not the idiosyncrasies of the medallion process.
Davis has other issues to consider. Should the city raise the maximum leasing rate for a medallion? (No.) Should taxicabs have to accept credit cards? (Yes, especially if fares are going up.) Should the city demand that taxis be hybrids? (Eventually, but there are logistical barriers to doing so right away.)
The main short-term question is how much taxis should be allowed to charge. At least two proposals are on the table: one by a consultant to the department, and a more costly fare structure proposed by the drivers' union. Davis could split the difference - but also make any increase contingent on the establishment of a reform commission.
While fares need to be high enough to cover drivers' considerable costs, Davis should avoid entrenching the existing system without fully exploring the alternatives.
