BOSTON HAS some of the highest taxi fares in North America. The three-mile trip that would cost a passenger around $7.50 in Washington, D.C., $8.30 in Montreal, and $8.50 in New York City would cost a Boston commuter $11. There are three steps the city can take to bring fares in line with those of other cities, and — fortunately for the cab-riding public — the solutions aren’t as complicated as the change-resistant taxi industry makes them out to be.
The city could start by reforming its anachronistic licensing system, which caps the number of cabs at 1,825. The cap made sense when it was put in place during the Great Depression, because it protected cab operators threatened by waves of out-of-work men flooding the streets with cheap rides. But back in the 1930s, most taxi drivers owned their own licenses — known as “medallions.’’ Today, a great many medallions are owned by investors who lease them to drivers at high rates. It’s these investors, many of whom do not even live in the area, who reap the benefits of the regulatory system.
Mark Cohen, Boston’s chief taxi regulator, has acknowledged that this regulation system needs to change. But he has long maintained that the city’s hands are tied. By some accounts, it would be illegal for the government to intentionally devalue licenses that are already on the market. But according to Lee McGrath, an attorney who successfully defended Minneapolis’s 2007 effort to deregulate its taxicab industry, federal law would allow Boston to increase the number of medallions, even if new licenses end up driving down the value of existing ones. The city should reinvestigate its legal options, and Cohen should consider a plan that would increase the number of medallions by at least 2.5 percent every six months over the next five years, a schedule that would allow the market to adjust gradually.
In the meantime, there are two other problems the city could target. The first is the rule preventing Boston cabdrivers from picking up fares outside the city. As a result, drivers heading from, say, Logan Airport to the suburbs have to charge more to cover the empty cab home. Boston should spearhead a regional taxi authority to promote cooperation between operators in Boston and surrounding cities and towns. Boston cab drivers might fight the idea, fearing a loss of business. A wise compromise would be to start by lifting the ban during certain peak hours, like on weekend nights after bars close.
In addition, the city should press for a new arrangement among cab companies, drivers, and credit-card companies; under the current one, a 6 percent fee comes off the top of every credit-card fare and into the coffers of card companies and card processors. The city was right to require that all taxis offer credit card payments, but it meant raising fares on all rides to cover the processing costs. The 6-percent premium is unreasonably high and effectively pits drivers against customers; the city should have enough leverage to drive down the fee.
Fixing any one of these problems will be difficult: the taxi industry is composed of well organized operators, unions, and investors, each with their own interests and money at stake. But this is a battle the city should relish — and the public should encourage. As long as the city delays the process, Bostonians will continue to foot an outrageously high bill for a necessary urban convenience.