Committee on Taxi Medallions: public hearing

The Committee on Taxi Medallions met Monday, July 28, starting at 7 pm in the sixth-floor meeting room at Town Hall: a public hearing on topics of concern to the committee. Only two of five committee members came: Chad Ellis, who chaired the hearing, and Amid El-Khoury. Checking in by telephone was Michael Sandman. Absent were Joshua Safer, the committee chair, and Jeremy Kushner.

A vote by the 2014 annual town meeting had referred Article 26, seeking to repeal the state authorization for sale of permanent taxi medallions, to a moderator’s committee. The referral took precedence over an amendment proposed by David Lescohier, a Precinct 11 town meeting member, to delay the submission of home-rule repeal legislation.

Echoes from town meeting: At the Monday hearing, Mr. Lescohier spoke first. He said that since a 2008 town-meeting vote to seek state legislation, Brookline had been “chasing the fantasy of windfall dreams” but failing to implement a program. Recent technology, he said, is leaving the taxi business “in a state of disruption and uncertainty.”

The current plan, Mr. Lescohier said, is “too risky and potentially unfair to the elderly and disabled, other Brookline taxi riders, the taxi companies and drivers, and environmental mitigation goals.” That reflects, he said, “an obsession to maximize…[a] medallion windfall, at all costs.”

For about a quarter of the current fleet of vehicles, Mr. Lescohier recommended “negotiations in good faith” leading to sale of “driver-owned medallions,” with payment “due at…[subsequent] sale or transfer…not at initial acquisition.” In line with recommendations of the 2007 Brookline Taxi Study prepared by Schaller Consulting, Mr. Lescohier said other taxis should continue to operate with annual licenses.

John Harris, a Precinct 8 town meeting member, was the main sponsor of Article 26, to repeal taxi medallions. Referring to “tiers” of fees now proposed for selling taxi medallions, he said the early years of the program would be “a temporary cornucopia, outsiders excluded.” Mr. Harris claimed medallions in Boston now sell for over $600 thousand, in Cambridge for over $500 thousand and in Somerville for over $300 thousand.

However, Mr. Harris asked, will “drivers get an opportunity to buy in? Once medallions hit the open market, the sky is the limit.” He expressed concern that high-priced medallions “would not create an opportunity for drivers [but] would actively thwart that.” A Harvard Business study found, he said, that in cities with taxi medallion systems fares average 11 to 25 percent higher than in cities without medallion systems.

Taxi company managers: Joe Bethoney, who owns and manages Bay State Taxi, the largest Brookline taxi company, said current competition was “unregulated and flush with cash.” Mr. Bethoney was obviously referring to mobile technology deployed by Uber, Hailo, Lyft and Sidecar. Medallions offered under reasonable conditions, he claimed, “will keep and attract quality drivers to Brookline.” He mentioned efforts to help drivers finance purchases of medallions and vehicles.

Mr. Bethoney emphasized special services that town-licensed taxis have been providing, notably the Brookline Elder Taxi System. That program is coordinated from the Brookline Senior Center and has strict income limits. According to Mr. Bethoney, it provides a few thousand rides a year at 50-percent discounts, for which the town reimburses half to taxi operators and taxi operators subsidize half.

Mr. Bethoney supports a medallion program but said the town’s current approach was “bad from the outset.” He contends the taxi business cannot afford high, up-front fees, such as Brookline now proposes. What he regards as a reasonable approach is for initial medallion owners to pay fees when medallions are subsequently sold. Potential revenue for the town would vary with the prosperity of the taxi business. That looks similar to what Mr. Lescohier supports. However, Mr. Bethoney proposes to cover at least 85 percent of the current taxi fleet, not 25 percent, and to maintain no annual licenses.

Matthew Mazzola, manager of Red Cab, said the Brookline taxi business has “been put on hold” by the long, drawn out discussions over taxi medallions–now seven years since the Schaller report of 2007. He favors a medallion system, saying it will “provide a well trod path to develop new resources” and “create new points of entry to the business.”

Darius Taveshi of Town Taxi complained. “People are slipping into our process,” he said, “who have never been involved.” Now, the “taxi industry in Brookline is dysfunctional.” A medallion system, he said, represents an “opportunity to create a better business model for the town.”

Taxi drivers: George Webber said he is a retired software engineer who has been driving a Brookline taxi since 1991. It was, he said, “very lucrative ten years ago for anybody who would put in the time.” Recently, with the new mobile dispatch competition, he said, “drivers have left.” However, he claimed, some are not getting a great deal. He said there are different pay rates for drivers with different experience.

With Uber in particular, Mr. Webber said, payments to drivers will “fluctuate with the time of day; the rates are auctioned. I wouldn’t do it.” He said that with online companies “there’s no record check, there’s no background check.” In the midst of unregulated competition, he said, “this summer is the toughest ever; I’m breaking even after ten hours of work.”

Donfred Gillies said he had been driving a Brookline taxi about ten years. He was eager to own a medallion and disappointed so far. Many drivers he said, would “lose faith in this process…If we had our own medallions, we could make money.” Another driver, giving his name as Franz, said he had been with Bay State Taxi for ten years. “In a changing world,” he said, “big businesses are shutting down. People want their own businesses to support their families.”

Town meeting members: Merelice, a Precinct 6 town meeting member, described a group of Boston taxi drivers who have been “exploring a co-op, sharing ownership and getting employee benefits.” Leasing taxis by the day, as in Boston, or by the week, as in Brookline, she said “drivers feel like sharecroppers.” Some people in Brookline “live in a bubble,” she continued, ignoring the fact that “most drivers are people of color.” Because the earlier Schaller medallion plan provided “no windfall for the town,” she said, it had been “shelved.”

Jane Gilman, a Precinct 3 town meeting member, said she had been “dismayed by membership of the committee [on taxi medallions]–not representative of a broad spectrum of opinions.” With high medallion fees proposed, she said, “how would taxi drivers service a loan? We should not advance the town finances on the backs of…day laborers.” Ms. Gilman urged the committee to “consider the pitfalls of putting money first,” saying “a lot of decisions…are not only bad but immoral. We are in a changing community…and need new thinking.”

Coping with reality: Except for Mr. Bethoney, neither taxi drivers nor managers spoke in detail about how they would cope with the practical situation of high-priced taxi medallions. It sounded as though many wanted to own them but few had planned how to buy them.

However, Mr. Bethoney of Bay State Taxi has a plan. He runs a credit business to help Bay State drivers buy homes and cars. Now, with participation from a local bank, he says he will help them buy taxi medallions. “I’m 70,” Mr. Bethoney said, “I’m done with the cab business…The era of the one and two cab owner is coming…It’s very hard to get credit for a medallion…I have 45 credit applications on my desk for a medallion.”

– Beacon staff, Brookline, MA, July 29, 2014

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