Ocean City Today
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City Council increases taxi medallion fees

Hike believed to equalize market price with what OC paid during buyback offer
By Katie Tabeling | Aug 03, 2017

(Aug. 4, 2017) In what members of the Ocean City Council said is an effort to resurrect the struggling taxi industry, the council on Tuesday doubled the taxi medallion sales transfer fee and eliminated the option that allowed sellers to give the government 25 percent of the sales price instead.

After the city last spring bought back 18 taxi medallions at $4,000 apiece to increase market demand, City Manager Doug Miller looked into the resort’s profit when one taxi company sold a medallion to another. When the medallion system started in 2010, 175 medallions were sold at $1,500 each. Transfer fees were set at $500 or 25 percent of the selling price.

“Looking back for three years, we’ve found that the average transfer sale was $3,500, so the $500 minimum is no longer relevant,” Miller told the council during Tuesday’s session. “We recommend that we raise it to $900, which is what I consider the value to be today.”

Councilman Wayne Hartman disagreed, and said that the city officials already decided the going rate for medallions is $4,000. He suggested eliminating the 25 percent cost, as a way to do away with any under-the-table dealings.

“I’d like to see a flat fee of $1,000, because it takes away whatever gains there are as far as someone declaring their value to the city [and paying something else],” he said. “If we set a flat fee for transfers, we can see the true value of medallions … there’s no brown bag of cash.”

Hartman made a motion to set the transfer fee at $1,000 and received backing from Councilman Matt James.

Councilman Tony DeLuca, who opposes altering the medallion system, questioned how this would help an “ailing” taxi industry. He pointed out some cabbies who sold their medallions back in May still kept their cabs.

“Maybe if they paid less of a fee, they could get GPS, an iPhone, a credit card reader ... this is another example of politics rather than letting the market forces take effect in raising [the medallions],” DeLuca said.

“The market is what people are willing to pay,” Councilman John Gehrig said. “As for market forces, Uber has lost $1.7 billion in the last six months. You want to talk about fake industry, it’s propped up by Silicon Valley, investors and the guy sitting on the shark tank. Drivers make some money … but Ocean City taxis have a real business to run and our operators can’t afford to take a loss.

“All this is doing is setting a cap for the fee at the standard market rate,” he continued.

The motion to set the taxi medallion transfer fees at a flat $1,000 passed 4-1, with DeLuca dissenting. Council President Lloyd Martin and Councilman Dennis Dare were absent.

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