After 45 years, Carriage News, a taxicab industry newspaper in Boston, is shuttering its presses. It released its last print issue in February and its website was put up for sale.
“A year ago, Carriage News had 10 active advertisers,” said Robert Keeley, the paper’s publisher. “And the day that I closed down, I had zero. Every single one of them had cancelled. They weren’t lending money and they weren’t spending money.”
“When the dust settles, you’ll still have medallion cash flows and medallion prices that are at a fraction of what they used to be.”
He was unabashed in pointing a finger at transportation networking companies (TNCs) like Uber and Lyft for the paper’s demise.
“The TNCs are on the very face of it. They’re totally illegal and the area politicians turned their back on that issue and they have put the livelihood of thousands of decent hardworking folks at risk of losing their life savings and no one seems to care,” he said.
James Hickman, chief investment officer for HVM Capital, a Boston-based research firm for the taxi medallion industry, said that the paper was a victim of market forces.
“When the dust settles, you’ll still have medallion cash flows and medallion prices that are at a fraction of what they used to be. And that means defaulting and lots of problems for lenders against those taxi medallions. And for Carriage News [folding], that’s driven by the revenue that’s coming out of that industry,” said Hickman.
For Carriage News’ advertisers, they simply had no reason to advertise to drivers moving off the taxi platform to Uber, evidenced indirectly through the prices of Boston taxi medallions, which have been dropping sharply for the past few months – with the most recent one selling for $350,000, according to the Boston Globe. Though medallion prices experienced a brief high last summer, number of sales and prices dropped considerably coming out of summer:
Boston Medallion Sales – Jan 2014 – Jan 2015, via HVM Capital
For the large number of drivers who already own a car, why would they lease out someone else’s for a still-expensive medallion? That’s one among many issues that the Boston Taxi Advisory Committee, a panel of 25 members commissioned to revise current cab laws, are looking to address. But former Carriage News columnist R.F. Kelly said that the Committee is failing to do much beyond acknowledging that, yes, there is a problem with the system.
“What’s most frustrating is that if you follow this at all, you’ll wonder what’s on the minds of these people from Marty Walsh to the City Council,” Kelly said. “They all complained that the taxi industry is an out of date model. But when we as an industry suggest something to change, they say ‘that’s a great idea,’ and then they do nothing.”
Increasingly, taxis in Boston are suffering from an identity problem.
There are multiple cab companies in Boston — Metro Cab, Boston Cab, Top Cab, City Cab, etc. — vying for the same market, but unlike New York, there’s no identifying color. And that service-to-color association is largely what allowed New York cabs to stay on par with Uber for as long as they did. (Until just recently when Uber topped 14,088 drivers over 13,587 yellow cabs.)
How many Uber or Lyft drivers are on Boston’s roads isn’t certain, since the Department of Public Utilities doesn’t require them to report back. Request for comment from Uber has yet to be received for this article.
In addition to the brand-service cohesion, there could be other factors that could give New York cabs an edge, like whether or not the rider prefers street hailing versus app hailing; safety regulations; competition during surge periods; and the question of wheelchair accessibility, which is something that Uber has had difficulty addressing in places like D.C. and San Francisco.
“We’ve been pushing for all taxis to be one color with one logo so we know what a legal taxi looks like for years,” Kelly said. “And what I do want is for all 1,825 taxis to be under one app. So that you only have one cab company to call.”
While rebranding and building a better app could be a first step in helping cab companies become more competitive, that won’t necessarily help them keep their drivers.
“If the taxi industry can adapt, if it can improve their driver retention and their driver compensation, if they can start matching what Uber and Lyft are bringing into the market — a superior product at a competitive price point — then they’ll continue,” said Hickman. “But there’s a lot of pain between now and then.”
Editor’s note: A previous version of this story stated that HVM Capital was a NY-based company. It is based in Boston, and its chief investment, not information officer, is James Hickman.