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Councilors would use federal Covid-19 recovery funds to buy back taxi medallions

Three city councilors say they city should use some of the money the city's getting from the feds to help out the owners of taxi medallions, whom they say have been decimated by unfair competition from Uber and Lyft.

Councilors Kendra Lara (Jamaica Plain, West Roxbury), Frank Baker (Dorchester) and Michael Flaherty (at large) say taxi medallion owners are just the sort of small businesses federal ARPA money is meant to help - already hard hit by ride-share companies, they suffered even more with the pandemic. Not only have cab drivers lost business directly, the value of their medallions has plummeted.

Lara said "big tech's overreach" has hit families who had counted on their taxi medallions to support their families. Although the city does have some large medallion owners, she said that half the city's current 1,800 or so medallions have owners with four or fewer medallions.

A buy-back program would help these families "get out of the red and into the black," she said.

The councilors did not set a price tag on their proposed buyback. The proposal now goes to a council committee for study and a hearing.

Baker said Uber and Lyft did the classic monopoly thing of driving out the competition and then, once they're doing, start raising all their prices.

Flaherty said he hopes the measure could leave to the rebirth of the local taxi business. Flaherty, whose grandfather and father drove cabs, said there's no reason that Boston with its own airport and numerous hotels, can't have a flourishing, locally owned cab industry.

Flaherty added that he hopes that, in addition to any payments to local medallion owners, the council would look at reforming the BPD hackney division, which currently regulates cab drivers - but not Uber and Lyft drivers, who are covered under state law - and which he said has "onerous requirements."

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Comments

I get that they can stretch the justification so it’s probably legal, but come on!

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Voting closed 46

How does buying back medallions "lead to the rebirth of the local taxi business"? Wouldn't that actually be reducing the number of taxis out there?

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Voting closed 48

The people who've been hit hard are the individual medallion owners. They deserve the medallion buybacks.

The people who don't deserve the buyback money are the fleet owners and others who own dozens of medallions. For years, these guys have gotten fat selling medallions. Their game is to sell the medallions, which until Uber/Lyft had a 6-figure price tag, on credit to folks who often had little or no money. The medallion-seller financed the loan, with the buyer using the proceeds from cab-driving to make the monthly payments. Inevitably, the buyer falls behind and the medallion gets repossessed. And soon resold to another poor sap.

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Voting closed 76

If anything, they were new entrants. They succeeded because they disrupted an industry that SUCKED.

Boston cabs sucked. Tell the driver you want to go to Roxbury? They'd drive away. Try to hail a cab while black? LOL. The credit card machine was always "broken." A few years back I took a cab with my disabled parents from the airport to the Government Center area. I TOLD the driver to take the Sumner and he took the Williams Tunnel anyway.

Not to mention the shady business practices of the large medallion holders that the Globe published about a decade ago. Get injured by someone driving a cab? Good luck getting compensation.

Medallion prices got so inflated because the medallion owners wanted it that way. They wanted limited competition and the rates were structured for rent-seeking. Sucks if you're stuck with an increasingly worthless medallion once the music stops, but that's life.

Got a bunch of free money from the Feds burning a hole in your pocket? Maybe use it on long-lasting improvements or keeping taxes down.

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Voting closed 124

The medallion system was monopolistic. Intentionally so. Uber/Lyft et al offered a better service and the public voted with their feet. (Well, okay, butts in this case...). The medallion system was also rife with corruption and abuse and it's woefully out of date now. Absolutely no buy-back should happen unless it includes retiring the system entirely. Putting a regulatory and/or licensing system (with no limits on the number of licenses) may be something reasonable to discuss, but simply throwing money at the old broken system is a ludicrous idea.

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Voting closed 56

People complained about rude cabbies and dirty cans. To me, the biggest reasons Boston Taxis sucked and Uber is better was the dispatch system. If a dispatcher bothered to answer the phone, they’d say “5 minutes” and hang up.

Sometimes the taxi arrived in 2 minutes and the driver was annoyed you weren’t ready. More often they came in 10+ minutes. If it was raining or during the holidays, they just didn’t bother to answer the phone.

Either way the dispatchers were horrible. The Uber/Lyft apps, with maps and a way to communicate, are 10,000x better. Even if those companies suck

Uber and Lyft didn't succeed as monopolies

By ScottB on Wed, 06/15/2022 - 1:46pm.
If anything, they were new entrants. They succeeded because they disrupted an industry that SUCKED

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Voting closed 53

Not just because the industry sucked, but because the industry's regulations were ultimately unenforceable. MA would never let this happen with, for example, unregulated bars popping up.

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Voting closed 25

This. All of this.

I remember the days of riding in dirty cabs that you'd swear were going to break down at any moment. Or the cabs that were part time apartments for the driver. And of course, it being 'cash only' and gosh for bid you don't have anything smaller than a 20!

And my fav.. If you hail a cab, you gotta tell them where you are going. Example:

Me: Yeah I'm going to Chelsea
Them: No, Sorry
**cab zips away*

(Happened far too many times)

The cab company had a monopoly and offered crappy service. Another service came along and offered better service. Guess which one wins

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Voting closed 26

Which sucked for a number of reasons including those posted here.

Not much love lost for Ubers. There is a bit more accountability for the people driving the cars with the rating system, and a bit less accountability for non-riders (harder to call the hack unit and report a reckless Uber).

The ability to call a ride with a phone certainly helped, but the real reason that Uber took over is money. (I've told many an incredulous younger millennial about how bars used to have a phone with a list of numbers next to it, and if you called one a cab would eventually show up.) For the first half decade of Uber, it was massively subsidized by venture capital money. It used to be that you could get across town in an Uber (or Lyft, they're the same basically) for little more than a T fare. It turns out that losing money on every ride was not profitable, so rates have climbed up to or often higher than cab rates.

The profit for cabs mostly went to the medallion owners, who were mostly unscrupulous lenders. The profit for Uber (if there is any) mostly goes to whatever their west coast HQ doing, whether it's failing to develop AVs or paying high salaries to developers to do … something something app. The drivers get screwed and the riders don't fare much better.

The root of the problem is that transporting people around a city in small vehicles is not that cheap. Uber created an artificially cheap market for a number of years, gobbled the cab industry and, yes, grew the market, but imagine if the ~$30 billion invested in Uber had instead been invested in a city which was easier to get around by walking, biking and transit.

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Voting closed 29

But even at the same or higher price, an Uber or Lyft is still a better product:

  • You have a decent idea of when your ride will arrive
  • You know the driver will take you to where you asked, rather than just driving away.
  • You know the car will be reasonably clean thanks to the rating system.
  • You know they'll take your credit card.
  • You know they won't drive away because of your skin tone.

And frankly, it's a better system for the little guys because it doesn't require them to buy into the artificially inflated market for medallions or rent a cab at some exorbitant rate from some shady medallion owner. They don't have to drive around looking for fares; the app tells them where to go to find their next customer.

I agree, on-demand private transportation around a city ain't cheap. But if Uber and Lyft were pricing themselves too high today, we'd see a resurgence in consumer demand for taxis, and that ain't happening. No one apart from cab drivers wants to return to the way things were.

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Voting closed 32

Is all of the other ways that cabs sucked. Which is a very very long list.

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Voting closed 14

Buy back all of the transferrable licenses and open the floodgates, let the market decide how many bars and restaurants and liquor stores there will be.

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Voting closed 44

Exactly! the cost of a liquor license is a huge barrier to starting new restaurants. The vested interest of existing license owners is one huge barrier to increasing supply. If a buyback allowed an increase in supply, it could enable more people to start new restaurants and create new jobs.

On the other hand, buying taxi medallions helps out those who have seen their business decline due to ridehailing, but doesn't do anything to support new entrepreneurs. I mean, who wants to get into the taxi business these days?

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Voting closed 23

I'd look at buying out and retiring the liquor license system way before the taxi medallions. If the legislature would only let go of the reins on the number of licenses, it would make a huge difference to Boston and lots of other cities.

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Voting closed 20

If these people bought medallions in the six-figure range, at what price will the city be buying them back at? This seems extremely expensive to help such a small population of business owners who, frankly, took a business risk and went belly-up like most other small business owners. That money can be going to the collective good, not bailing out medallion owners who refused to adapt to a changing market.

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Voting closed 37

Just refund everyone who’s lost money on their investments due to unforeseen changes? /s

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Voting closed 41

I bought last November at $68K. Will the Council buy that back too? I also have $10 K invested in Beanie Babies, if anyone wants to buy them. I will only take cash or Tide.

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Voting closed 17

when I tried to get a cab from downtown to Uphams' Corner.

They went out of business because they suck, not because of Uber or Lyft.

Don't give them a nickel.

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Voting closed 34

What the council should do is review all the ways in which the city was directly responsible for the mess that was the Taxi industry.

If they didn't restrict the number of licenses, types of cars that could be used, etc it wouldn't have gotten to the point where people would rather take their chances with a complete stranger in an unmarked personal car vs a licensed Taxi.

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Voting closed 26

Same for chelsea, as I said above... they would just drive off.

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Voting closed 11

I'd love to know how many single operator medallions there are. If some guy mortgaged his house to buy a single medallion so he could run a taxi and make that his career, I'd be open to some compensation for him/her. Buying out fleets should be totally off the table.

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Voting closed 23

If someone mortgaged their house to open a business which later failed despite their best efforts would you feel the same way?

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Voting closed 21

Let's also cover Bitcoin and 401k losses!

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Voting closed 15

But the people most responsible already cashed out, so go claw it back.

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Voting closed 9

Providing a vastly better product?

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Voting closed 14

superpumped !

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Voting closed 8

Please withdraw from this proposal and it it becomes a bill please vote against it.

Signed,

A 6th district regular voter.

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Voting closed 8