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Regulatory Hurdles Drive Up Cost Of Boston Cabs

Cabs wait at a taxi stand near Tremont Street in Boston. (rkelland/Flickr)

Cabs wait at a taxi stand near Tremont Street in Boston. (rkelland/Flickr)

If you’ve ever had the nagging suspicion that cab rides cost more in Boston than they do in other major cities, it turns out you’re right.

Monday, we discovered that, for an average length trip, Boston has the highest fares of any big city in North America. A $13 ride in Boston will cost you only $9 in Washington, D.C. The question is, why?

Radio Boston’s Adam Ragusea continues a two-part report on Boston cabs. We also speak with John Ford, co-owner of Top Cab/City Cab, and Sam Staley, the director of urban growth and land use policy for the Reason Foundation, about why Boston’s fares are so high and why bringing them down is no easy task.


  • John Ford, co-owner, Top Cab/City Cab
  • Sam Staley, director of urban growth and land use policy, Reason Foundation

The data in the chart below were provided by TaxiWiz.

Boston’s regulation of the cab industry, particularly in the last two years, has been quite progressive. Or, aggressive, depending on your point of view.

“Boston, along with New York, and I know of no other city in America, requires that all taxis be brand new,” said Mark Cohen, Boston’s top cab regulator. “Now, this may seem like a little thing, but it’s the difference between buying a car that might cost you $27,000 and one that costs you $2,000.”

Certainly, that makes the taxi business more expensive. What else?

“We have required that every taxi have credit card machines in the back, and that technology — which is GPS, Web-based technology,” Cohen said. “Those systems cost hundreds of thousands of dollars, if not millions, for our industry to put into place.”

Plus, there’s the 6 percent that the credit card companies take out of every fare for their processing fee. As much as cab drivers might complain about it, that cost was factored into the last rate hike that gave Boston the dubious distinction of having the highest per-mile fees of any big city in North America.

“Frankly, it’s the consumer who pays for these situations,” Cohen said.

But Boston is hardly the only city to place expensive requirements on its cab industry. New York City requires both credit cards and new cars, and yet, fares are cheaper. So again, what makes Boston so special?

The average price of one-, two- and three-mile taxi rides. Click to enlarge. (Data courtesy TaxiWiz.com/Jeremy Bernfeld for WBUR)

The average price of one-, two- and three-mile taxi rides. Click to enlarge. (Data courtesy TaxiWiz.com/Jeremy Bernfeld for WBUR)

Monday, I met a cab driver known as Tom “the Hack.” He’d picked up a young woman at the airport who was on her way home to Malden Center.

Once we’d dropped her off, I asked Tom what he’d do next.

“Well, get back the shortest route to Boston, even though I’m going to have to drive back empty,” Tom said.

Why empty? Well, Tom’s cab has a Boston medallion on the back of it. While he can drop people off outside the city limits, he can’t pick anybody up. At least, not a street hail. So, nine miles back to Boston we went, with an idle meter.

“Probably doesn’t make a lot of sense as far as our green footprint, but I guess the Malden drivers got to make a living, too,” Tom said.

This condition here is unique among major cities, as the high-traffic urban core is split between half a dozen municipalities, each with their own rules, their own regulators and their own cabbies.

“Does it kill you when you take someone to Harvard Square and then there’s fares just dying to be had and you have to drive back over the river?” I asked Tom.

“Yeah, of course,” Tom said. “But, you know, in general the Cambridge drivers run into that more in Boston. They drop someone off in Back Bay and they’re on Boylston Street and everyone’s waving. They know they’re going back to a desert in Cambridge.”

The need to travel through that desert is at the heart of Boston’s taxi problem.

“Well, there’s no question it’s inefficient,” said cab business expert Edward Rogoff of Baruch College in Manhattan. “There should be a regional transportation policy that covers this and allows driver to take fares where people wanna go.”

“I think in the long run, unless the regulators get way out in front of this…I think you’re going to see the medallion system eventually made obsolete by technology.”
– Prof. Edward Rogoff,
Baruch College

Of course, not everyone agrees.

“I would find it highly ironic if a Boston taxi driver complained about not being able to pick up in the suburbs,” Cohen, the Boston cab regulator, said. “The issue isn’t so much that they can’t pick up in the suburbs, it’s that they fiercely want us to protect their borders and they don’t want the suburban cabs picking up in the city.”

For his part, Cohen would be happy to wave a magic wand, do away with the medallion system and maybe even unite Boston, Cambridge and Brookline in a regional taxi authority.

“But,” Cohen said, “these are pipe dreams. When you have an industry that has rules that go back to 1931, to try to put the horse back in the barn on this thing is exceedingly difficult.”

Difficult, but not impossible, says Prof. Rogoff.

“What’s going to happen is that technology is going to make all of this obsolete,” Rogoff said. “You’re going to have an app on your smart phone, and you’re going to say ‘I want a cab,’ and then a cab is going to show up.”

If you arrange your ride in advance, the car that picks you up doesn’t need a medallion. It could be a cab from a different city where the rates are cheaper, or it could be one of those livery cars you see everywhere these days.

“I think in the long run, unless the regulators get way out in front of this, which I think is unlikely, I think you’re going to see the medallion system eventually made obsolete by technology,” Rogoff said.


Other stories from this show:

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  • Maureen Keleher

    I’m so glad you’re doing this show. I rarely take taxis (because they cost too much) and have had to take one for the past few nights because I was working later than public transit is available. I just commented to a co-worker that I am almost brought to tears as I watch that meter go up and up for my 4 mile ride. The fact that the fare starts just sitting in the car- $2 before you’ve even gone anywhere- is a crime! I’m obviously going somewhere so there’s no need to charge me before any miles have been travelled. I feel very strongly that I should be able to go anywhere in Boston to any neighboring city- Cambridge, Somerville, Brookline, Watertown for only $10- it should be a flat rate around the city. There are also TVs in the car now- how much of the fare is cover that junk! Prices definitely are too high and need to come down.

  • http://www.fibrowitch.net fibrowitch

    My biggest issue is not with the cost of cabs. It is that as a person with a service dog most cab drivers refuse to pick us up. Even when I call for a cab to pick me up drivers will refuse to allow my service dog in the cab. I complain and complain and nothing happens. I want drivers to follow the laws first then we can wait to drop the cost of a taxi ride.

  • justin milaski

    This regulation and turg wars nonsense. This is what is going to happen because this is what always happens: there is going to be a case where some poor girls is going to be hailing a boston cab in cambridge and he isn’t “allowed” to and something terrible is going to happen to her. This kind of thing happens all the time and unfortunately that is what it takes for anything to be done right.

  • Don

    I always wondered why you have to take the first cab in the line in the airport or even in a cab line in a busy city square.

    Why can’t we pick which cab we want to take? Wouldn’t that give cab companies and cabbies an incentive to give the best possible service? Why is it even legal to require us to take the first cab?

    I thought our economic system was based on competition and a free market.

  • moe cabdriver

    how about the cost of operating a cab for the driver? It cost the driver $ 105 to lease the cab plus the cost of the gas($20-$30) per shift, meaning the cab drive has to come up with $135 before making any money for himself, after that the driver is lucky to make $100 for his pocket for 12 hour shift, that means the cab driver makes about $9 per hour before taxes. Radio Boston should ask the Hackney Unit for their statistics on the cab driver income since they have access to how much the make.
    The reason for the high medallion prices is the Hackney Unit, they keep putting drivers on the road, there is 1800 medallions and the there is 20,000 cab drivers on the road. Most of the owners of the medallions are lawyers who get about %10 cash on their investment and do not pay taxes, there are very few drivers who own their medallions. THESE ARE FACTS I HOPE RADIO BOSTON INVESTIGATES.

  • Anonymous

    It’s really amazing to know that Boston cabs cost is really higher than Washington D. C. And I really want to say that traffic really effects to the meters. Well, This one is really the great thing for the Boston Cab industries and companies. This one is really booming.

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