SalemNews.com, Salem, MA

Local News

February 25, 2013

Cab firm questions bylaw on insurance

DANVERS — The owner of a Peabody cab company is questioning a bylaw that requires taxi companies to carry $1 million in insurance coverage for each cab to get a license — an amount he said is impossible to get.

North Shore Taxi owner Sean McKinnon said neither the state nor private insurers offer such a high amount of coverage for taxis, and, without the proof of insurance, his company cannot get a license in town.

“Basically, that’s the basis of the entire defense,” McKinnon said. “They passed a bylaw that makes it unilaterally impossible to receive a license to conduct a lawful business.”

North Shore Taxi is the same company whose ad in The Salem News triggered the selectmen’s discussion on Feb. 5 that led to last week’s police crackdown on taxi services operating without the proper licenses and permits.

Local cab companies have since complied with the bylaw and stopped picking up fares in town, consequently leaving people who depend on cabs without a ride. Taxis not licensed in town can pass through town and drop fares off, but they cannot pick up passengers.

Selectmen plan to discuss taxicab operations tomorrow.

Officials say the town’s taxicab bylaw, passed in 2009, was meant to streamline and update the town’s cab rules and regulations, to keep passengers safe, and to make sure that cabs are inspected and drivers have background checks.

The annual fee is not prohibitive. A license costs $100 for the business and one taxi and $50 for each additional vehicle. Since the sting, some cab companies have pulled applications to get a license.

But McKinnon says the required $1 million in coverage is the sticking point. A letter he received from Lighthouse Insurance Agency in South Boston states the “highest available limit” both from the state and private insurance carriers “is a split limit of $250,000 per person and $500,000 per accident.”

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