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Now, instead of calling a cab, people swipe into their smartphones and click on the Uber or Lyft app from their couches, derailing a once prosperous industry and leaving it struggling to survive.

(Sept. 27, 2019) The traditional taxi industry in Ocean City is in trouble, as the days when people called or waved down a cab are fading into the shadows of higher-tech ride share services.

Now, people swipe into their smartphones and click on the Uber or Lyft app from their couches, derailing a once prosperous industry and leaving it struggling to survive. 

 “There won’t be taxis in Ocean City in five years at this rate,” said one taxi operator, who asked not to be identified for fear or reprisals. 

One reason, he said,  is the lack of regulations for Uber and Lyft drivers, while his industry must continue to conform to a higher standard.

“The taxi industry is under strict regulations and they enforce those regulations on a daily basis,” he said. “When [a taxi] gets pulled over for any reason…it gets fully inspected … nobody is doing that to Uber. Nobody. There is no one regulating Uber and Lyft, and it’s the wild, wild, west out there.”

In 2015, Uber spent $127,139 lobbying for a ride-share bill that would allow the company to operate in the state under far less stringent regulatory structures. 

It passed, and, for a time, Uber and Lyft have conducted name-based background checks through services such as Checkr, but little else.

In 2016, the state attempted to force Uber and Lyft drivers to begin fingerprint background checks — as taxi drivers are required to do —  but it failed, in part after Uber threatened to leave the state. 

Uber argued that fingerprint background checks were unnecessary, and would slow the process of getting drivers on the road. 

Instead, state regulators accepted Uber and Lyft’s waivers, which required the two companies to tighten up their regulations, with oversight from the Maryland Public Service Commission. 

With less stringent oversight, Uber and Lyft are out-pacing the taxi industry, and business has plummeted. 

“We’ve probably lost about 65 percent of our business,” the taxi operator said. “It has gotten progressively worse and worse every year.” 

Taxi medallion values have plummeted as well. 

Taxi medallions are transferable city-issued permits that authorize taxi drivers to operate, and help regulate the industry and prevent oversaturation. 

However, the value of a taxi medallion is reliant on the market and its perceived worth. 

“They’re [medallions] worthless,” he said. “… That’s no exaggeration, they’re completely worthless ...” 

At one point, the Washington Post called medallions the “best investment in America,” and New York medallions, the most valuable in the U.S., were worth $1 million. 

Ocean City saw peak medallion values in 2015, when average resale prices were around $7,788. The next year, medallions were worth $4,200.

This year, two medallions sold for $2,000 each. 

In comparison, Uber and Lyft commissions to the city jumped from $36,800.14 in 2017 (124,500 fares) to $77,348.14 in 2019 (309,392 fares).

In addition, there is a cost to medallions. Until April this year, taxi companies paid $500 each to renew medallions each year. That fee has since dropped to $250 in an attempt by the City Council to help the industry. 

The city does not have the jurisdiction to charge Uber and Lyft such fees. 

The taxi operator said until the state is able to hold Uber and Lyft to the same standards as it does the taxi industry, the industry’s future is bleak. 

“It’s not the strong will survive, that won’t happen,” he said. “The strong will die.”

Josh covers everything Ocean City government and crime. He graduated from the University of Richmond in 2019 with a B.A. in French and Journalism.

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