Cab Operators Rail Against Medallion System

OCEAN CITY — As expected, sparks flew, tempers flared and a proverbial line was drawn in the sand for the fight over what it should cost to operate a cab in Ocean City.

At day’s end on Tuesday, the cost to acquire a so-called “medallion” will be $1,500 per car, with only 160 medallions to be offered.

When the Mayor and City Council met at City Hall to debate the proposed taxicab medallion ordinance, several dozen members of the taxi industry showed up to express their disdain for the change that in their minds is just adding to their cost and padding the town’s pockets. All the while, the town argued that putting a medallion system in effect would create a valuable commodity for the owners of the medallions.

After three hours of heated deliberation that seemed to have run the gamut of emotions – thunderous applause, muttered expletives, political posturing and even an industry walkout from those in attendance – the Ocean City Council voted 5-2, with Lloyd Martin and Jim Hall in opposition, to move forward with a new ordinance that would require a $1,500 medallion be purchased to operate a cab in the resort.

From the town’s perspective, the decision was a compromise, as Mayor Rick Meehan argued that the council’s decision to allow the initial cost of the medallion to be paid over five payments, in 20-percent increments, essentially making the first payment when the medallion is purchased ($300 per car), was more than reasonable.

“I thought that the council listened to what those in the taxi industry had to say and we made some changes based on their passionate testimony,” said Meehan. “In the end though, I think what was proposed is very reasonable and when we all look back on this decision, although it’s going to increase their costs this year, those medallions are going to grow in value.”

In summation of the entire proposal, which was essentially piece-mealed together based on spirited testimony from those in the audience and usual back-and-forth banter from those on the council, what will be read on Monday night’s meeting at City Hall for the first of a required two readings will include the $1,500 per car fee, with 20 percent due the day of medallion acquisition, and payments due each month on the 15th with the final payment due July 15. In addition, there will be a $500 per car annual renewal fee for the medallion, a 25-percent fee paid to the town of Ocean City if the medallion is transferred or sold, tacked onto the costs that already are set in stone for the taxi industry to acquire the decal from the Ocean City Police Department ($150) and annual inspection fees. Lastly, the medallions will be offered to the existing license holders first on March 1 at 10 a.m. at City Hall, with the one caveat being that owners will not be able to purchase more medallions than they have current licenses.

“We all want a good cab system, but no one is making a million dollars in this industry,” said Ocean City Taxi owner Carl Kufchak. “I could probably afford what you are asking because I own the largest cab fleet from here to Baltimore, but this is going to put the little guy out of business, and I don’t want that. Nobody wants that.”

The ordinance, penned by City Solicitor Guy Ayres, as originally written, called for a sealed bid process where applicants would essentially compete for the right to these medallions.

However, the industry members who were on hand seemed so unsettled by the uncertainty of that process, many feared that the smaller cab companies would be the biggest losers.

“I think there’s a lot of scared people with putting it to a sealed bid,” said City Cab owner Wayne White. “If you were to put it at a flat bid and just set a price then no one is going to get knocked out of business and feel the shock of losing everything during an auction.”

White’s comments were met with loud applause as was heard a handful of times, most notably when Councilwoman Margaret Pillas pitched an idea that would essentially add to the cost of the business license rather than have a medallion system altogether.

“It seems to me that we are offering up a value or commodity that the industry doesn’t want,” said Pillas. “I don’t want to chase out small business in this town because we make it too expensive for them to operate.”

Yet, the momentum that those in the cab industry may have thought was being gained based on their vehement arguments was essentially thwarted when Councilman Doug Cymek made the motion to set a price for the medallions at $1,500, rather than the $1,000 per medallion that was rumored to be the starting price for the sealed bid process.

“The first thing I said all along when I heard about this was that they were going to shove this decision down our throats,” said Classic Taxi owner Christy Freeman. “I probably could’ve lived with a $1,000 per medallion, but $1,500 per medallion is just too high, and what’s even more unacceptable is the $500 annual renewal fee per medallion. We think that it should be $500 per company each year.”

Cymek’s motion essentially cleared the room as all but a few members of the industry stormed out of the council chambers in unanimous anger.

Councilman Jim Hall, who was vocal throughout the conversation in trying to find a happy medium to pass the ordinance through, voted against the motion claiming that the $1,500 was simply “too high” for the business owners to manage and said, “we’ll never see 160 medallions sold, and we are going to see a lot of people walk away from the industry for this money.”

Councilman Lloyd Martin, who also voted against Cymek’s motion, agreed with Hall’s sentiments.

“We basically put a price on something that has driven the cabbies out of the room,” said Martin,

At Monday’s first reading, police officials are expected to report on the exact number of licenses that were purchased last year by fleet (anyone owning one or more cab) and independent owners. There is a clause written into the ordinance that would require at least 25 percent of the medallions sold in the resort to go to independent owners.

If all the medallions are sold, the town expects to accrue an additional $240,000 in revenue, just from the initial medallion fee alone.

Some in the taxi industry say that the town needs to expend some of this revenue to enforce the rules and punish those in the industry who are ripping people off and breaking laws on a consistent basis.

“If they don’t give the police some of this money to actually enforce the rules, the only thing that is going to change is that it’s going to cost more to be on the road,” said Century Taxi owner Ken Hovance. “The bad drivers are still going to be there because there is only so many drivers for us to choose from. If the town really wants to clean up the industry, they need to use some of the medallion money. The cops aren’t doing it now, because they aren’t getting paid for it.”

Meehan says that although the town has not laid out a specific plan for where the medallion money is going to go, he agrees that some of that money should be put toward enforcement.

“I think that some of that money should go towards making sure that people are following the rules,” said Meehan, “but some of that money is going to be going into the general fund as we spend millions to draw people to come to Ocean City and make sure the streets are clean and the resort is in top-notch shape. That money that we expend is vital to any business in town, including the taxi industry.”