If Lyft and Uber were banned in Boston who benefits? Part 1

Is the current undefined role of ride sharing in Boston a long term solution?

I can’t speak for Lyft or Uber management…or any other Lyft driver…or any medallion taxi driver.

However my personal answer is a robust NO. The current undefined role of ride sharing is unfair for passengers and riders. This is precisely why the status quo is not a long term solution.

I join the many Bostonians who advocate adoption by the City of Boston of regulations closely based on the Transportation Network Company (TNC) licensing by the California Public Utilities Commission (CPUC). The new TNC category was created in September 2013 and includes Lyft, SideCar and UberX.

Beginning on March 31, 2013 the Boston Globe published a three part series on their investigation of Boston’s taxi industry. They documented an industry where taxi medallion owners get rich, drivers are frequently fleeced, and city regulators in the Hackney Unit do little about it.

After these revelations, Mayor Menino commissioned a study of the Boston taxi industry published in October 2013. The study recommended that within one year the City should create a TNC license very similar to California’s.

A TNC is defined as a corporation or other organization that provides prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles.

For the benefit of drivers AND passengers, the taxi industry needs to be disrupted by the sharing economy with a force far greater than at present.

It is a gross misunderstanding to view the “taxi industry” in the City of Boston as the 6,300 licensed taxi drivers in Boston driving medallion taxis.

The enemies of Lyft and UberX drivers making $20 an hour are not Somali taxi drivers making $11 an hour.


If Lyft and Uber were banned in Boston who benefits?

Taxi medallion owners and no one else.

If you think Mitt Romney needs a 15% tax rate to give him an incentive to create jobs, you’ll love describing medallion owners as taxi industry job creators. Plus you’ll appreciate medallion owners keeping us safe from the Level 3 sex offenders lurking behind a pink mustache.

Boston medallion owners provide absolutely no value at all. They just grab a big chunk of the income flowing from passengers paying the third highest taxi rates in the country on its way to Boston taxi drivers barely making a living wage.

Owning a taxi medallion in Boston is the only way a conventional cabbie can drive. It is ONLY a license. When first required in 1937, medallions cost an inflation-adjusted $160.

Boston medallions are now selling for $625,000.

Medallion owner’s power has maintained the law that Cambridge drivers and no other taxi drivers outside Boston are allowed to pick up passengers in the City.

How does a taxi driver get behind the wheel in Boston? Shift drivers rent medallions from owners for $100 for each 12 hour shift. Let’s see…that’s $100 X 2 shifts per day X 365 days = $73,000 per year. Ok…what if they only rent for 80% of the maximum number of available shifts — $60,000. What exactly are the services provided by this government-created cartel besides a car with logos?  Absolutely none.

Every year in the City of Boston, medallion taxis give 14,000,000 rides.

There are 453 medallion owners who actually drive a taxi. However due to a restriction of the number of medallions over decades, the remaining medallions are now primarily investment vehicles for the wealthy. There are only 18 owners that own 10 or more medallions each. Together they own 730 medallions, 53% of medallions not used by owner operators — worth a total of $438,000,000.

Taxi medallion owners will do whatever they can to boot Lyft and Uber out of Boston.


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