Taxi medallion owners under water and drowning

Few tears are being shed for taxi medallion owners but there’s no denying they’re being squeezed into oblivion by Uber and Lyft.

But the ripple effects are going beyond, with banks that hold mortgages on the one-time valuable medallions foreclosing on the loans or eating the principal and taking interest-only payments to try to recoup some value back on their assets, the Boston Globe reports.

It’s an issue that has been lurking since the first ride-hailing company arrived in Boston and began disrupting the monopoly that cab owners and drivers had in the city.

The 1,825 medallions in the city were gold, with prices reaching more than $700,000 just a few years ago, before anyone thought Uber was anything more than a German superlative. Now the value of medallions have plummeted to half that and there’s no bottom in sight.

Last fall, CommonWealth reported that banks were beginning to foreclose on medallions and putting them up for auction. But what they were finding was a dry market, even at fire sale prices. The large taxi fleet owners have about half of the medallions but the remaining belong to small operators and those are the ones being forced to go into bankruptcy or just give up their medallion to the foreclosure process.

Many say not only are their operations losing money, they can’t find drivers to lease the cabs, as many are now opting to use their own cars and drive for a transportation network app. Part of the problem in Boston is not only are fares regulated, but the city’s Hackney Division governs leasing rates as well, with a minimum amount cab owners must charge. Some try to lease out for less but not only is that forbidden, they still have trouble finding drivers at the cut rate price.

And that’s the nub of the issue. The costs of medallions skyrocketed when cabs were the only transportation game in town. But now that ride-hailing drivers are ubiquitous – there are an estimated 22,000 in the Boston area – and essentially unregulated, they can drive circles around taxis.

Regulators have done little to protect cab drivers and their investments, while doing even less to level the playing field by enforcing regulations on Uber, Lyft, and others. Some cities are looking at buying back medallions they once mandated as a way to bail out the regulated cab industry.

But not here. Opponents say buying a medallion is akin to purchasing a house, that it’s a risk you take that the economy will protect your investment, and if it tanks, tough luck. But that overlooks the fact that you don’t have to own a house to live in the city; you can’t drive a cab without a medallion.

State officials have been dragging their feet and a compromise bill has yet to emerge from the Legislature with just six weeks remaining before the end of the term. The lack of a bill is not hurting the transportation network companies but it’s killing cab owners.

–JACK SULLIVAN

 

BEACON HILL

Gov. Charlie Baker dismisses seven of the nine members of the Marine Fisheries Advisory Commission. Several commission members say their dismissal was political payback for failing to back the governor’s choice for running the Division of Marine Fisheries. (Gloucester Times)

A Republican editorial says Baker is missing the point on the rattlesnake debate.

A Herald editorial says a proposed revamping of the state’s public records law is good — as far as it goes, which is not far enough.

MUNICIPAL MATTERS

A Berkshire Eagle editorial praises Pittsfield Mayor Linda Tyer for pledging to spend $1 million beefing up the city’s police presence. The paper says the city is paying now for neglecting its crime problem for years.

A Patriot Ledger review of a week of police details found more than half the officers worked an average of 20 hours over their regular scheduled shifts despite a state effort to use private flagmen, raising concerns of an overworked police force.

An important footnote to Boston Public Library president pick: Jill Bourne has yet to formally accept the offer — and city leaders in San Jose, California, whose library system she now heads, are making a plea for her to stay there. (Boston Herald)

The attorney general’s office accuses Webster officials of violating the state’s Open Meeting Law intentionally. (Telegram & Gazette)

The Worcester City Council passes an emergency ordinance allowing police to seize illegal ATVs and dirt bikes and arrest their riders. (Telegram & Gazette)

IndyCar debacle, continued: The national IndyCar organization is suing the local group that supposed to put on an IndyCar race in Boston. The Herald reports that the local group agreed to pay the national organization $1.5 million if the race was cancelled (as it has been).

DRUGS

If the ballot question legalizing marijuana passes this fall, medical marijuana dispensaries and even applicants for those dispensaries will be first in line for retail pot licenses. (CommonWealth)

Gloucester strikes a deal with Happy Valley Ventures, which intends to build a medical marijuana sales and growing facility in Blackburn Industrial Park. (Gloucester Times)

WASHINGTON/NATIONAL/INTERNATIONAL

America magazine’s Robert David Sullivan runs down 15 ways President Obama has changed the direction of the country.

Kim Darroch, Britain’s ambassador to the US, pens a Globe oped making the case for the UK remaining in the EU.

ELECTIONS

In used-car-salesman fashion, Donald Trump leans heavily on the phrase “believe me” to undergird his often unbelievable pronouncements, reports the Globe’s Matt Viser. (Boston Globe) Scot Lehigh thinks Americans will eventually wake up to the “hodgepodge of impossibility” that Trump is peddling and he’ll be sent “the way of every other dime-store demagogue.” (Boston Globe)

The Herald tests Trump’s ideas on immigration with experts in the field and finds support for few of them, while others are dismissed as unworkable and even illegal.

Elizabeth Warren has yet to formally endorse Hillary Clinton, but they are increasingly attacking Trump on the same themes. (Boston Globe)  Warren calls Trump a “small, insecure moneygrubber,” while Trump dubs her “Pocahontas.” (Associated Press)

Gov. Charlie Baker makes it clear that he doesn’t intend to vote for president, even if his mentor William Weld is in the race. (State House News) Jeff Jacoby, on the other hand, says he’ll gladly vote for a Johnson-Weld Libertarian Party ticket — even though he admits Weld — for whom, he says, “politics was pretty much entertainment” — pretty much abandoned his professed libertarian ideals as soon as he took office as Massachusetts governor in 1991. (Boston Globe)

Rep. Ben Swan says he will not seek reelection, making way for his son to run for the Springfield seat. (Masslive)

BUSINESS/ECONOMY

Framingham Town Meeting members soundly rejected a proposal to allow taller buildings, as high as 10 stories. (MetroWest Daily News)

A NOAA research vessel surveying scallop beds lost a $450,000 underwater camera when it got snagged by a shipwreck while being towed, an accident that could have a significant impact on the catch quotas for New Bedford scalloping industry. (Standard-Times)

EDUCATION

A coalition of civil rights groups and other leaders is urging the city to revamp admission rules at Boston Latin School to ensure greater representation of black and Latino students. (Boston Globe)

Gloucester resident John McElhenny writes a column explaining how he was wrong about youth sports. (Gloucester Times)

Greater Lowell schools say they are in compliance with federal transgender rules. (The Sun)

The Senate tacked on an amendment in its budget that would require UMass to install gunfire detection systems on all five campuses. (State House News Service)

Zac Bears says the Pioneer Institute report on UMass misses the real problem. (CommonWealth)

HEALTH/HEALTH CARE

More men diagnosed with early prostate cancer are opting to forego treatment in an approach called “active surveillance.” (New York Times)

TRANSPORTATION

Oregon and California test alternatives to the gas tax. (Governing)

The Conservation Law Foundation says the state capital plan means many MBTA buses will be operating beyond their useful life. (WBUR)

ENERGY/ENVIRONMENT

Eversource Energy says the average monthly usage of its customers is 600 kilowatt hours, up from the 500 kilowatt number it has used for years. (CommonWealth)

Scientists and fishermen are trying to devise ways to reduce or prevent the increasing number of whale entanglements in fishing nets. (Cape Cod Times)

CRIMINAL JUSTICE/COURTS

Three months ago Clinton District Court Judge Andrew Mandell told Jorge Zambrano he had to behave if a police officer needed to talk to him, and then released him on $500 bail. Zambrano this week killed one police officer in Auburn and wounded another before being shot and killed. (Telegram & Gazette) The Globe details Zambrano’s long record — and ability to remain out of jail.

Patrick Donovan, labeled an “animal” by Springfield Mayor Domenic Sarno, is sentenced to 18 to 25 years for beating a 92-year-old man during a 2014 home invasion. (Masslive)

State Police along with police from Lawrence, Andover, and North Andover continue drug sweeps in Lawrence that have resulted in more than 40 arrests. (Eagle-Tribune) A Salem couple say police there have done far too little to crack down drug dealing that is rampant in the neighborhood where they bought a waterview condo. (Boston Globe)

A 10-year-old Brockton boy will appear in court after police say he brought a realistic-looking toy gun into school and pointed it at another student on the playground. (The Ente

A Brockton man freed from prison in the Annie Dookhan crime lab scandal is being tried for the murder of a 45-year-old man six months after he was released. (The Enterprise)

MEDIA

Haverhill Gazette writer Tom Vartabedian’s class on obituary writing draws the attention of the Wall Street Journal. (Eagle-Tribune)

Peter Thiel, the billionaire co-founder of PayPal, secretly funded the legal fees for Hulk Hogan’s successful $140 million invasion of privacy suit against the website Gawker. The site had outed Thiel as gay in 2007 before he openly revealed his sexual orientation. (New York Times)