Ocean City Today

City officials weighing taxi medallions buy-back offers

While negotiating prices for permits, Council continues transfers between cabbies
By Katie Tabeling | May 11, 2017
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(May 12, 2017) The Ocean City government is looking at bids from two taxi companies interested in selling their medallions back to the city, but their asking price may be too high for resort officials.

Last week, OCPD Records Section Manager Michelle Monico opened bids from Niteclub Taxi owner Michael Pawlewski and Ocean City Taxi owner Carl Kurchak offering to sell 14 medallions back to the city. Pawlewski sought to sell six medallions, all falling between $4,400 and $4,800. Kurchak set his asking price for eight medallions at $6,666.66.

The City Council turned the bids over to the city manager’s office and expect to see a presentation in the near future.

“I’ve been asked to further negotiate the offers with the two companies [by the City Council],” City Manager Doug Miller said.

In mid-April, the City Council voted behind closed doors to start a voluntary buy-back program ostensibly to prop up the falling prices of taxi medallions. Letters were quietly sent to cab companies offering to buy back the medallions at a price point that was not mentioned but is believed to be around $4,000. Bids were closed on May 4.

“There’s hasn’t been another decision by the council yet to have another voluntary buy-back,” Council President Lloyd Martin said.

Ocean City started regulating the taxi industry by selling 175 medallions at $1,500 each six years ago. Cab companies were permitted to sell the permits amongst themselves, as long as the city received 25 percent of the sale. Permits need to be renewed every year at a $500 fee.

In recent years, the average resale prices for medallions plummeted, and resort officials point to ride-hailing companies Lyft and Uber saturating the market. Resale rates dropped from roughly an average of $3,000 in the last two years.

The council has approved 11 medallion transfers this year, five of which occurred during Tuesday’s work session. One of those transfers was between Pawlewski and Fasil Gebereegzabhar of Lucky Taxi for $4,100.

Councilman Matt James has repeatedly criticized continuing business as usual instead of buying medallions outright, even though the council has publicly said it wants to support the taxi industry.

“This [medallion transfers] falls within the price point we discussed, and we’re trying to increase the value of medallions and reduce the number of them out on the streets,” James said on Tuesday. “I don’t know why we would allow some transfers to go through at such low prices.”

Martin said during the work session the point is voluntarily boosting the sale price for those interested in selling to the city, not punishing those who still see taxis as a viable business.

“The prior council created the problem by putting too many medallions on the street, but I didn’t agree with it,” said Martin, who sat on the council when the medallion system was implemented. “I’m not OK with taking something that someone’s going to make a living with.”

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