Brookline taxis: long-term “medallion” licenses

Members of Brookline’s Transportation Board have claimed at public meetings that the board began considering perpetual or long-term “medallion” licensing of taxis as early as 20 years ago. However, its first concrete action was in the fall of 2006, asking the Board of Selectmen for about $25,000 to fund a professional study. The Board of Selectmen approved a contract with Schaller Consulting of New York City.

At the time, Bruce Schaller had 25 years of experience analyzing taxi operations, including New York City, San Francisco, San Diego, Alexandria, VA, Anaheim, CA, Laredo, TX, and Montgomery County, MD. Mr. Schaller conducted surveys and organized conferences in Brookline with taxi owners, drivers and passengers, met with the Transportation Board four times and delivered a final report called Brookline Taxi Study in June, 2007. His report has vanished from Brookline’s municipal Web site, and it is being cached at the Beacon as a service to readers.

In early 2007, Mr. Schaller found two large and two small Brookline taxi companies with a total of 162 vehicles and licenses:

Bay State, 77 vehicles and licenses
Red Cab, 40 vehicles and licenses
Eagle Cab, 25 vehicles and licenses
Town Taxi, 20 vehicles and licenses

In addition, he found a total of 25 vehicles and licenses with a total of 11 individual operators and very small companies. According to Mr. Schaller, the taxi fleet of 187 vehicles and licenses was a reasonable match to the demands for services, averaging 3,300 trips per day. Incidents of slow service were lower than in most comparable places, while typical driver incomes were equal or higher. [pp. 8-10]

Historically, Red Cab is the established service, starting in the 1920s. Bay State is the insurgent, starting in the 1970s. The others are upstarts, starting in about the past 20 years. The Transportation Board added around 50 new taxi licenses over the past 20 years and has also been assigning the upstart companies and individuals some licenses formerly held by Bay State and Red Cab.

Mr. Schaller reported a minimum sustainable company size of about 40 vehicles and licenses, in order to absorb costs of dispatching, maintaining and garaging vehicles. At the time of his report, individuals and very small companies had mostly affiliated with Bay State or Red Cab for services they needed. Town Taxi was also dispatching taxis operating in Boston. Eagle Cab, operating independently, looked to be at risk. That service is now provided by Hello Taxi, operating from Western Ave. in Brighton.

Mr. Schaller found that Brookline’s taxi service more nearly resembled smaller suburban than larger urban services. In New York City and Boston, he wrote, around 80 percent of the trips come from street hails and taxi stands, and around 20 percent come from telephone orders. In Brookline, the numbers are reversed. Bay State and Red Cab dominate telephone-order business through what Mr. Schaller called “name recognition of established companies.” [pp. 12, 16]

Mr. Schaller said Brookline could maintain stable services at reasonable fares, while capturing some income, by licensing three large companies plus a share of licenses assigned to individual drivers. He recommended that Brookline plan gradual transition from “hackney” licenses renewed each year to perpetual or long-term “medallion” licenses for companies and drivers. By spreading a transition over time, he wrote, the industry would be able to absorb the financial burden and would gain stability from ownership of major assets.

The Schaller report emphasized balance: a few large companies sustainably dispatching, maintaining and garaging vehicles, but also some small companies and individual operators that provide competition. In order to maintain such a balance, it advised against auctioning “medallion” licenses to the highest bidders. Instead, it advocated a time-payment approach, in which “medallion” fees would be paid over periods of several years. [pp. 19-22]

Based on comparisons with other communities and business conditions in Brookline, in effect Mr. Schaller predicted a market value around $40,000 for “medallion” licenses, recommending a fee of $600 per month paid over seven years [p. 3] He outlined several options for fees and transition times, recommending a plan to sell about 19 medallions per year to companies and individuals–in other words, given the size of the taxi fleet, about 10 years of license conversions and a total 16-year transition period. [pp. 2, 30]

If Brookline had implemented Mr. Schaller’s plan at the time he filed a final report, by now Brookline would be near halfway through transition, and it would have received nearly $4 million in “medallion” fees:

July, 2008: $600 x 12 x 19 = $136,800
July, 2009: $600 x 12 x 38 = $273,600
July, 2010: $600 x 12 x 57 = $410,400
July, 2011: $600 x 12 x 76 = $547,200
July, 2012: $600 x 12 x 95 = $684,000
July, 2013: $600 x 12 x 114 = $820,800
July, 2014: $600 x 12 x 133 = $957,600
Total revenue over 7 years $3,830,400

So far, Brookline stumbled. It never created a single taxi “medallion” and received no revenue at all.

– Beacon Staff, July 19, 2014


Note: Thanks to David Lescohier, a Precinct 11 town meeting member, for a copy of the Schaller report of 2007 that he had downloaded from Brookline’s municipal Web site before it vanished from the site.


Brookline, MA, Board of Selectmen, Minutes, November 2, 2006, see “TAXI CONSULTANT STUDY”

Bruce Schaller, Brookline Taxi Study, Schaller Consulting, June, 2007

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