City Buys Another Taxi Medallion In 5-2 Council Vote

OCEAN CITY — A divided council this week agreed to exercise its option to buy back a taxi medallion slated for transfer from one operator to another, continuing its efforts at stabilizing the cab industry in the resort.

Earlier this year, the Mayor and Council voted to adopt a buy-back program for its taxi medallions, essentially a limited number of licenses to operate cabs within the resort. Through the buy-back program, the city intends to reduce the number of medallions on the streets, thereby increasing the demand and, as a result, increasing their value. In the first phase of the initiative, the city exercised its option to essentially buy back 18 of the original 175 taxi medallions issued when the program began in 2010 at $4,000 each in the hopes the reduced number of medallions on the street would increase their value.

On Monday, the Mayor and Council had before them a requested transfer of a taxi medallion from one private operator to another for $2,000. After considerable debate, the council voted 5-2 to exercise the town’s option to buy back the medallion in question for the $2,000 asking price, thereby further reducing the number of medallions on the street.

In 2010, Ocean City adopted a taxi medallion system in an attempt to better regulate the resort’s cab industry and as a means to generate revenue. In that first year, the town sold 175 taxi medallions to various cab companies and independent operators for about $1,500 each through a lottery system. The intent was to limit the number of cabs that operate exclusively on the island, eliminate rogue cabs from out of the area to operate in the resort at peak times and to add stronger regulations in the interest of public safety.

As expected, the limited number quickly drove up the price for one of the coveted medallions, the taxi industry on the island was better regulated and the town had its steady revenue stream. However, the proliferation of Uber, for example, has steadily chipped away at and even surpassed the regulated cab industry in Ocean City, ostensibly lowering the value of the limited number of medallions.

As a result, the Mayor and Council recently decided to buy back taxi medallions when a transfer is proposed or a sale is offered in an attempt to reduce the number of available medallions and essentially increase the demand and, therefore, the price. On Monday, Councilman Wayne Hartman said the proposed transfer of a medallion from one private operator to another at $2,000 represented a bargain for the city if the council opted to exercise its first right of purchase.

“We just bought back medallions for $4,000 and now here’s one for half price,” he said. “If the council decides to exercise its first right to purchase this instead of allowing the transfer, where would money for something like that come from?”

Councilman John Gehrig agreed the town should exercise its option to buy back the taxi medallion in question for $2,000.

“We recently initiated a buy-back program based on the general consensus,” he said. “This is 50 percent discounted and the money is already budgeted.”

Councilman Matt James seconded Gehrig’s motion to buy back the medallion for $2,000, agreeing it represented a bargain.

“This is obviously a great deal,” he said. “This will keep us in the direction of our main goal.”

However, Councilman Tony DeLuca, who has made his displeasure with the buy-back program known from the beginning, disagreed with the purchase of the medallion despite its $2,000 price tag.

“You know I’m obviously against this,” he said. “I think it borders on ridiculous. I just think this is government interfering with business again. We’re spending taxpayer money to interfere with business, so I’m really against this.”

Hartman disagreed, saying buying back the current medallion would reduce the total number to 126, which is more realistic than the original 175 issued seven years ago.

“We can agree to disagree, but this isn’t government interfering,” he said. “This is government fixing a prior mistake when 175 medallions were put out there. The 125 or 126 is the appropriate number and it sounds a lot better than 175.”

Gehrig said continuing to reduce the number of medallions, thereby stabilizing the taxi industry in the resort, was critical to the health of the cab business and not a detriment.

“We, as a group, decided to buy back medallions, and if we don’t believe that now, that’s a different discussion,” he said. “We are in the transportation business. A healthy taxi service is critical to the future of Ocean City. This isn’t government meddling. We have an ordinance that regulates this industry.”

Gehrig also took the opportunity to point out the not-so-subtle differences between the regulated cab industry and the loosely regulated alternatives such as Uber.

“We’re invested in a safe, reliable transportation system in Ocean City and I believe the success of the taxi industry is critical to the visitors and residents of this town,” he said. “I guess a lot of people are comfortable having strangers pick them up that haven’t been vetted. That’s up to them.”

After considerable debate, the council voted 5-2 to buy back the medallion for $2,000 with DeLuca and Councilman Dennis Dare opposed.

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.