OCEAN CITY — Amid concerns of possible collusion on its taxi medallion sale prices, resort officials this week voted to create a flat transfer fee paid to the town when a medallion is sold from one operator to another.
Earlier this year, the Mayor and Council voted to adopt a buy-back program for its taxi medallions, essentially a limited number of licenses to operate cabs within the resort. Through the buy-back program, the city intends to reduce the number of medallions on the streets, thereby increasing the demand and, as a result, increasing their value.
In the first phase of the buy-back program, the Mayor and Council agreed to purchase 18 taxi medallions at $4,000 each, or a total of $72,000. The $4,000 figure was determined to be fair value based on the recent trends in sales between private operators. When one operator sells a medallion or block of medallions to another operator, the city receives a transfer fee equaling the greater of $500 or 25 percent of the sale price.
However, it has come to light some operators might be reporting the sale price of a taxi medallion to the city at a much lower rate than the actual sale, thereby lowering the amount of the transfer fee paid to the resort. For example, a sale could be reported to the city at $2,500, when an operator actually sold the medallion to another operator at say $4,500.