DC Pushes New Taxi Medallion Bill; Will Enrich Cab Barons, Screw Everyone Else.

After failing twice to enact a system that would enrich a handful of private companies by screwing riders and destroying D.C.'s unique owner-operated cab industry, D.C. pols are at it again. And they've wisened up: There's no "medallion bill" to get riled up over. Instead, they buried it in a few sentences at the end of a piece of legislation that's supposed to "modernize" the industry.

The nation's capital currently enjoys an unusually free and open cab industry dominated by independent drivers who set their own hours and pocket most of their own revenues. That's not to say anyone can break in. The supply of cabs is limited by a licensing exam for drivers that's been closed since 2010. (D.C.'s taxi commission receives calls "all day, everyday" from people who want to sign up for the exam, according to one employee of the commission.)

But the supply of taxis isn't limited, and that's a key distinction. It means the cabs themselves are worth about as much as any other car with a meter. That's what's made it possible for D.C. cabbies to be free entrepreneurs since they don't have to make a major capital investment before they can start driving. All they have to do is buy or rent a car.

That would change if section 5, article K of a new bill co-sponsored by Councilmembers Mary Cheh and Tommy Wells becomes law. That provision would empower the Taxi Commission to "establish a public vehicle-for-hire licensing quota which provide that the number of new taxicab vehicle licenses may be limited."

This would create a medallion system, plain and simple. Limiting the number of taxi permits means they'll become expensive and scarce. It's the very same arrangement that's caused endemic cab shortages (see New York City), handed control of an entire industry to one company (see Milwaukee), and forced cabbies to arbitrarily give the lionshare of their revenues to big companies (see Boston).

This bill is also a giant gift to companies that own taxi fleets. Today, those firms make most of their income by renting vehicles to drivers. It's not an exceptionally lucrative business because essentially they're just providing drivers with a car and a meter. But all existing cabs would be grandfathered in under the new system, so all those cabs for rent would suddenly have medallions attached to them. This would boost the value of those fleet companies many times over, since now drivers would have to rent a car and a medallion. (In New York City, a single taxi medallion, i.e. the right to drive one cab, sells for about $750,000.)

In a phone interview, I asked D.C. Taxicab Commission Chairman Ron Linton, who helped write the new bill, if he has considered how a medallion system will enrichen big cab companies at the expense of owner-operators.

"It's an interesting point and a fair point and we're going to have to take a hard look at it because that's not the intent," he said.

New York City taxi medallions make for a lucrative trade on Wall Street, but some cities do restrict the sale and purchase of taxi medallions.

Linton said he isn't sure what the policy would be in D.C. "That's a good question," he said. "It hasn't been brought up."

Are taxi magnates like Jerry Schaeffer, who literally hired the lobbyist who wrote the last medallion bill, behind this latest cab grab? Taxi cab reporter Pete Tucker discovered that Linton met privately with the owners of D.C.'s biggest fleet owners earlier this month. Linton told me that the purpose of the meeting was largely technical and had to do with other aspects of the bill.

"I don't get a sense of a great opposition from fleet owners coming down the line, but I don't get a sense of great support either," he said.

Linton says the new system will empower the commission to bring the number of cabs on D.C.'s streets "in line with market demand." If D.C.'s medallions become too valuable and scarce, he says, he can always break the cartel by increasing the supply of medallions. What he doesn't acknowledge is that his medallion system will create an interest group determined to protect its assets. I recommend he read up on New York City's never-ending battle to increase its supply of medallions, which were first set in the 1930s.

For more on how a medallions system will hurt everyone except a handful of politically connected companies, check out our Reason.tv report from July, "D.C. Taxi Heist."

 

Bonus video: Why I Was Arrested Yesterday at a D.C. Taxi Commission Meeting.

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  • CalebT||

    OT: I don't know if anyone else checks in on PZ Myers' blog Pharyngula, but today he's posted a link to an anti-Ron Paul article. Also, he says that there is misogynistic comments on the article that reminds him why he hates libertarians.

    http://freethoughtblogs.com/ph.....s-fanbase/

    I don't know how much more the newsletter story will add to such irrational hatred of libertarians, but I'm guessing that I might have to revert back to calling myself a "liberal Republican."

  • CalebT||

    Oh, well, it looks like Sullum has something up about Paul now, so I'll re-post over there.

  • cynical||

    I wouldn't worry about it. Being hated by a smarmy little shit like PZ Myers should be worn as a badge of honor.

  • ||

    get back to your tractor pulls and stop hating on your enlightened betters.

  • ||

    You sure nailed the smug elitism of Myers and his followers.

  • ||

    I saw a picture of him once. That was enough.

  • ||

    I used to enjoy PZ's blog, but he let it degenerate into a left-wing circle jerk several years ago.

    -jcr

  • Mainer||

    Why implement a medallion system. Because fuck you, that's why.

  • BoscoH||

    Close. These poor drivers come from disadvantaged backgrounds and need someone to teach them how to apply soap in the shower. That's why.

  • Jerry Sandusky||

    Please, tell us more!

  • ||

    A medallion system makes sense considering that without medallions, you basically have people getting in random strangers' vehicles with no traceability.

    However, limiting the supply of medallions doesn't make sense from a safety POV.

  • ||

    Is that really you, Tulpa, advocating a rent seeking scheme?

  • ||

    It's not rent seeking if you don't limit the number of medallions.

  • nobody||

    A licensing system makes sense considering that without licenses, you basically have people getting interior design consulting from random strangers with no traceability.

  • ||

    Riiiiiight...because there is no way a determined criminal could create a fake taxi with a believable fake medallion. And every passenger knows what a real medallion looks like and checks the validity of the taxi medallion before getting in.

  • ||

    Crap. That was in response to Tulpy.

  • ||

    That's the perfect being the enemy of the good.

  • ||

    Evil interior design consultants are much less dangerous than evil guys inviting you into their vehicles.

  • R||

    There's a pretty simple solution to that: carry a gun. You'll most likely be getting into the back seat, which will give you the drop on the driver, and it's unlikely a bad guy who has a fake taxi to rob people is going to spring for a bullet proof division.

  • Brandon||

    Tony, stop using Tulpa's handle. It's been three days now.

  • ||

    "A medallion system state grocery commission makes sense considering that without medallions a grocery commission, you basically have people getting in random strangers' vehicles buying food with no traceability."

    Fixed.

  • well||

    No kidding. How many incidents of cab-related fraud/crime are there in DC compared to other cities? Where is the actual data showing that there is some problem that needs to be fixed?

  • ||

    Grocery stores, restaurants, etc are pretty traceable. They don't move. If you have a problem with food you bought there, you can go back to the same place.

    Random guys in cars do move, quite frequently.

  • Kolohe||

    Food trucks?

  • ||

    Or you could..you know.. check the fucking license plate.. or the vehicle registration..or the VIN..

  • Doctor Whom||

    DC taxicabs already have to display hackers' licenses and front and back license plates. How much more traceability is needed or would do any good?

  • ||

    Taxicabs are "hacks" from "hackney [cab]." Hackers are computer wonks.

  • Doctor Whom||

    According to sources that I trust over you, "hacker" has multiple meanings, including taxicab drivers.

  • ||

    A medallion system makes sense considering that without medallions, you basically have people getting in random strangers' vehicles with no traceability.

    I see what you're getting at, but that still leaves us with the problem of having to pay for permission to engage in commerce.

  • ||

    The system I was talking about imposes a fairly light burden and serves a compelling public safety interest. And of course, while most businesses depend on public roads in some indirect way, the entire taxi business takes place using public roads.

  • Joe||

    Because you know, normal people are incapable of determining what is and isn't legitimate. I mean who would eat at a restaurant that isn't known nationally? That mom and pop shop may be trying to poison you after all...

  • ||

    You can tell if a mom and pop restaurant has no cars in the parking lot and smells like dead rats inside.

    You can't tell if a random guy in a yellow car has spent his life going in and out of prison for armed robbery.

  • ||

    You can't tell if a random cook at a restaurant has spent his life going in and out of prison either. What's your point?

  • NoVAHockey||

    We have that in DC. It's called the slug line. People use it to get three people in car to use the HOV lanes.

    Of course the authorities don't really like it.

  • Kolohe||

    And ironically the biggest slug users are Pentagon employees.

  • ||

    I know, that would be horrible. Why it would almost be like damn near every small country I've been to in South America and Asia.

    And yet somehow I managed to avoid ever getting raped, robbed, killed, even assaulted as a clueless tourist.

    And all without the government protecting me.

    And the whole "not limiting" thing will be the first thing to go out the window after the bill passes.

  • ||

    I've never had my door broken down in the middle of the night by a SWAT team or had my dog shot, so I guess there's no problem with SWAT overreach in this country.

  • Highway||

    The Taxicab Commission Chairman sounds like such a disingenuous jerkoff.

    'Oh hey, noone's ever brought up the idea that it will be a great big payoff to our powerful friends ever before. We'll have to look into that.'

    'Hmm, what's that you say, some places let these be sold? We've never thought about that at all...'

  • Kolohe||

    He sounds like a quite genuine jerkoff to me.

  • seguin||

    'Linton says the new system will empower the commission to bring the number of cabs on D.C.'s streets "in line with market demand.'

    Because the market wouldn't know without me telling it.

  • Auric Demonocles||

    Don't you know the market is demanding more cabs, and that will only happen if people have to buy the right to drive a car from us?

  • ||

    I guess he's one of those guys who figures that if the market doesn't provide exactly what everyone wants, at a price everyone is willing to pay then it must indicate a failure of capatalism and so the government must step in.

    You know, because the government is well known for making things better.

  • ||

    we're going to have to take a hard look at it because that's not the intent," he said.

    *outright prolonged laughter*

  • ||

    without medallions, you basically have people getting in random strangers' vehicles with no traceability.

    Oh

    my

    GOOOOOOOOOOOOOOOOOOOOOOD.

  • Auric Demonocles||

    ...

  • Auric Demonocles||

    I seem to have just completely skipped over Tupla's comment the first time. My brain must have blanked out the stupid.

  • ||

    Wow, what an argument! You and the spoofer should hang out.

  • Doctor Whom||

    "... that's not the intent."

    Famous last words.

    "Linton says the new system will empower the commission to bring the number of cabs on D.C.'s streets 'in line with market demand.' "

    A is not A.

  • ||

    If D.C.'s medallions become too valuable and scarce, he says, he can always break the cartel by increasing the supply of medallions.

    HAHAHAHAHAHAHAHAHA...ehhhhhh...whew

    I'm sure they'll get right on that.

  • ||

    Someone will have to look into it.

  • Sam||

    Top men

  • ||

    The Topliest.

  • Matrix||

    but you know some knuckleheaded voters will fall right in line with it.

  • Appalachian Australian||

    I'm sure someone like Libertymike will complain that I'm race-obsessed or race-baiting, but as someone who used to ride around in D.C. cabs, I can't help but notice how the impact of this medallion law will primarily hurt African-Americans and immigrants of colour.

    I've never been in any other U.S. city where the cabbies were both overwhelmingly black, and also had so much pride in their cabs. And no, I've never had any trouble with getting in some random stranger's vehicle, although I have "negotiated" a fare from D.C. to distant airports a few time.

    Why does D.C.'s government hate its own working poor so much?

  • 16th amendment||

    In DC, which right now has no Medallion system:

    dc.taxiwiz.com/fare.php?lang=en has DC cab fares:

    Initial Charge $3.00
    Rate per mile $1.50
    Rate per minute stopped or in traffic $0.25
    Surcharges
    - There is a $1.00 surcharge for peak traffic hours (Mon - Fri, 7am to 9:30am, except holidays)
    - There is a $1.00 surcharge for peak traffic hours (Mon - Fri, 4pm to 6:30pm, except holidays)
    - There is a $1.50 surcharge for each passenger (age 6 and older).

    In San Francisco, which has a Medallion system:

    sf.taxiwiz.com/fare.php?lang=en

    Initial Charge $3.10
    Rate per mile $2.25
    Rate per minute stopped or in traffic $0.45
    Surcharges
    - There is a $2.00 surcharge for trips from San Francisco Intl Airport (SFO).
    - There is a $2.00 surcharge for trips to San Francisco Intl Airport (SFO).

    According to http://swz.salary.com/SalaryWi.....co-CA.aspx

    median taxcab driver salary in SF is $37,949. Some drivers own their own medallions, so they will make more.

    In DC, according to http://swz.salary.com/SalaryWi.....on-DC.aspx

    median salary is $34,470.

    Looks like rates are much less in DC but annual salary is about the same (maybe more considering cost of living adjustments, SF is most expensive). So obviously in SF the winners are the medallion owners who get money for sitting on their butts, thanks to the government!

    Say no to medallions. The winners are: (1) consumers who get to pay lower fares, (2) mankind itself because there will be more taxicab drivers per capita so more people able to make a living.

    As a side note, I suspect cab drivers don't report all of their income on their tax return (since they get lots of cash). It's breaking the law, but the avoid the 15.3% FICA tax, and likely 25% federal income tax, and state tax.

  • ||

    Say no to medallions. The winners are: (1) consumers who get to pay lower fares, (2) mankind itself because there will be more taxicab drivers per capita so more people able to make a living.

    This is just making insanely good sense to me.

    As a side note, I suspect cab drivers don't report all of their income on their tax return (since they get lots of cash). It's breaking the law, but the avoid the 15.3% FICA tax, and likely 25% federal income tax, and state tax.

    I'm more convinced of a sales-tax-only system with every day that passes. Income taxation costs too much to ensure compliance, and property taxes deny the basic ownership of property.

  • Juice||

    They also want to them to be paint them all the same color. They're thinking red. I shit you not.

  • ||

    This is what regulation is all about: screwing the consumer for the benefit of a cartel, ensuring a steady bribe stream for the politicians. I want to know how much cash the cab companies have stuffed in Mary Cheh and Tommy Wells' refrigerators.

    -jcr

  • ||

    AN INSIDER OUTLOOK

    I used to drive a cab till 2006 while I was a student. During that period, I also used to rent a vehicle from cab companies when my own cab stays in a garage for maintenance.

    This is what I have noticed... Most of the time, those rental vehicles owned by cab companies are dirty, not wel maintained and dangerous to drive. I wonder how they managed to pass safety inspection in the first place. I remembere several occasions in which I was compelled to return the vehicle with in few hours due to such safety concerns. Several of those vehicles are still on DC streets.

    Comparatively, most of the vehicles which are owned by a cab driver are clean and wel maintained. Because, it is his own vehicle. Morever, there is tough inspection enforced on owner drivers than company owned vehicles.

    In addition to this, most company rental vehicles are driven by cabbies who are unable to save money and buy their own vehicles due to their constant drinking and drug consumption habits.

    One final point: the cabbies who rent and drive do not get enough sleep and rest due to the extra financial burden levied on them by cab companies. This also will expose them for traffic accident compared to those drivers who have better extra time. This, of course, is dangerous for public safety.

    But this is the secret of the "Taxi Medallion" that the cab companies are advocating for. I wish I could be wrong.

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