Boston has some of the highest per-mile taxi rates in the U.S., higher than far wealthier cities such as New York. At the same time, our streets aren’t all that congested at most times of day, unlike, say, New York. The result is that people do a lot of extra driving in private cars in order to avoid using taxis.
Consider a guy who lives in the suburbs who needs to go to Logan Airport for a five-day trip. He could drive his gas-guzzling SUV and pay $100 to park at the airport. He could pay $120 for a round-trip cab ride in a gas-guzzling seven-year-old full-size American sedan, the mainstay of our taxi fleet. What is he likely to do? Have his wife drive the gas-guzzling SUV to and from Logan twice.
How could we have lower fares and brand-new hybrid vehicles at the same time? Current taxi fares go primarily to pay rent on the medallions. The City of Boston artificially restricts the number of taxis to roughly the same number that existed in the 1930s, when the city was much smaller and poorer. The consequence is that it costs roughly $400,000 to buy a medallion, 20 times the cost of a brand-new 2008 Toyota Prius (a medallion for New York City is closer to $600,000). How come your driver barely speaks English, doesn’t know how to navigate anywhere, doesn’t have a $200 dashboard-mounted GPS, looks poor, and is driving a wreck? As an economist would predict, with the supply of medallions limited, all profits from a taxi operation go to the medallion owners. The drivers earn a subsistence income regardless of the rates set by the city. They cannot be paid less because they would quit and take another job requiring no skills. They cannot be paid more because any higher salary for drivers would attract unskilled workers willing to work for less. When someone hands $40 to a taxi driver here in Boston, most of the money ends up in the hands of a millionaire or billionaire who owns the medallion.
In the old days nobody seemed to mind a system left over from the 1930s that made life in Boston more expensive and clogged our parking spaces with private cars that people used so that they wouldn’t have to pay for artificially inflated taxi fares. When gas is over $4 per gallon, though, and we’re choking ourselves and our planet, perhaps we can summon the political will to expand our taxi fleet with hybrids.
One advantage of hybrid taxis is that a taxi is operated more miles than a private vehicle, so replacing an old Ford Crown Victoria with a new Prius has a lot more impact on gas consumption if done for a cab than for a family car. Another advantage is that taxis tend to be operated mostly in stop-and-go city traffic, where hybrids perform best. Finally we have the opportunity to reduce air pollution to make Boston more attractive to people and employers who have been fleeing south and west.
Right now the politicians and bureaucrats are debating whether to approve a requested 50 percent fare increase, on the stated theory that it will help drivers pay for gas. In reality any fare increase must end up in medallion owners’ pockets. Perhaps it is time to allow anyone who is willing to meet safety and technical standards to operate a taxi here in Boston at rates that are 30 percent lower than current rates. To qualify, a driver would need to be in a vehicle that burns no fuel when stopped in traffic and that consumes, overall, no more fuel than a 2008 Toyota Prius. That should ensure a plentiful supply of efficient taxis on the road and at rates low enough to get people out of their SUVs.
Background: http://www.bostonmagazine.com/articles/fare_game/ (a 2004 article with some useful information)
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