Gas prices prompt taxi companies to ask Ann Arbor City Council for increase in maximum fare rates
In direct response to rising gas prices, Ann Arbor officials are entertaining a request from local taxicab companies to approve an 11 percent increase in cab fare rates.
The Ann Arbor City Council is expected to vote Monday night on a resolution setting a new maximum allowable rate in the city limits. The city's Taxicab Board recently voted unanimously to recommend to council an increase of 25 cents per mile — up from $2.25 to $2.50.
City Council Member Stephen Kunselman, D-3rd Ward, is sponsoring the resolution to have the council concur with the board-approved increase.
The Tobias family expanded its fleet of green cabs into Ann Arbor last year.
Melanie Maxwell | AnnArbor.com
The council will hold a public hearing on the increase before it votes. The meeting starts at 7 p.m. on the second floor of the Ann Arbor Municipal Center at 301 E. Huron St. downtown.
At the city's Taxicab Board meeting on April 28, representatives of six taxicab companies spoke in support of a rate increase to deal with the increased volatility of gas prices.
The existing rate structure was approved by the City Council in May 2008. Since then, gas prices have soared above $4 per gallon and are expected to continue to rise, said Sarah Singleton, the city's Taxicab Board secretary.
Given the volatility in gas prices and the length of time it takes for rate changes to be discussed and approved, Singleton said the board opted to recommend a "significant rate increase" with the understanding that it only establishes a maximum rate companies can charge. If and when fuel prices are lower, she said, companies can opt to charge lower rates.
Singleton said the board doesn't anticipate considering another rate increase until gas prices are above $5 for at least two consecutive months.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
Skyjockey43
Mon, May 16, 2011 : 11:35 p.m.
A Raise? You think we'd be getting a raise??? While everyone is hollering "do the math" why don't you do some math yourself. If expenses go up while prices remain constant, our income goes down. If prices go up as expenses go up, we don't get a raise. If we're lucky, our income remains the same. Here's the reality - prices for goods and services are necessarily rising because of increased business costs. Why do you think that Ann Arbor taxis should be the ONLY business exempt from the reality of economic forces? Or do you think that ALL business should have their prices set by the city of Ann Arbor?
Joslyn at the U
Tue, May 17, 2011 : 12:34 p.m.
as confusing as this may sound the truth is Ann Arbor shouldnt be able to regulate anything when it comes to private business. Who the hell do they think they are? What we live in moscow?
Joslyn at the U
Mon, May 16, 2011 : 9:43 p.m.
Do the math. Taxis here cost as much if not more than anywhere in the country. Taxis do NOT need another raise period.
ACLABT
Mon, May 16, 2011 : 1:47 a.m.
Do the math. If a taxi driver drives 100 miles per day (loaded) he will spend approximately $21.00 for gas at the current rate. One year ago it was approximately $14.00 ($4.10 per gal current $2.70 per gal a year ago) Then figure the unpaid miles - when the driver is empty. I would guess it would be 15-20% of the miles. When you figure the increased cost of gas, the unpaid (empty) miles, the lack of true and effective regulation, the increase of competition - does a quarter a mile really sound like a drastic increase? Then there are "jumpers", invalid credit cards or others who do not pay. The driver has to eat the loss. Would you begrudge your hair dressing raising the rates from $22 to $25 per cut? Why begrudge your taxi driver from earning an extra buck for a 4 mile ride.
Lizzeh
Sun, May 15, 2011 : 10:31 p.m.
I don't drive so I have to take a taxi when I go grocery shopping. A weeks worth of groceries with a 5 year old isn't very doable on a bus. I don't think I'd care either way if there was an increase. I was told by one of the Blue Cab drivers that the owner of Blue Cab reimburses his drivers anything over 3 dollars a gallon.
Mi resident
Sun, May 15, 2011 : 10:21 p.m.
How about this.... If you don't like it, Ride a bike. Cab companies provide a service. Just like a haircut, manicure or lawn service. If you can't afford to do it, then find an alternative or don't do it. I don't care WHAT city your in or how much they charge. IT MAKES NO DIFFERENCE. It's called capitalism and the cost of doing business.
Snarf Oscar Boondoggle
Tue, May 17, 2011 : 6:07 a.m.
w0w .. an undesrstanding of economices! how did you manage to survieve int he ppl;s republic of a2? amazing .. congratualtoins!
Joslyn at the U
Mon, May 16, 2011 : 12:07 a.m.
The market is changing and the competition is harsh.....this is NOT a public utility. It is Capitalism. May the strong survive ......and the weak fall like chaffe
Anna Mae Trievel
Sun, May 15, 2011 : 9:58 p.m.
This seems like a wholly inefficient system to have to ask for a rate increase and then have the city council debate it each time there is a change in gas prices (and to have every city council across the country debating the same item). Rates should not be set in numbers but by a formula that automatically increases and DECREASES as major cost components change. By including gas price, insurance costs, labor costs, licensing costs, etc. the rate would automatically adjust at a predefined interval. There would be a lag but barring seasonal fluctuations, everything will average out. With the inclusion of labor costs (indexed to minimum wage, poverty line, median income or whatever is deemed appropriate), this model should be able to go decades without needing to go before the council.
Skyjockey43
Sun, May 15, 2011 : 8:26 p.m.
First let me dispel the myth that Ann Arbor taxi rates being so much more expensive than New York taxis (which I hear ALL the time from the many U of M New Yorkers who seem to think admission to this university qualifies them omniscient enough to pontificate on subjects they really don't know squat about) The Ann Arbor Flag Drop rate is currently $3 (what the meter starts at) The Current New York City flag drop rate is $2.50. Sounds like less right? Except when you include the extra 50 cents for the night surcharge, or the DOLLAR peak hour surcharge. Ann Arbor's per mile charge is currently $2.25 New York's per mile charge is $2.00 However, in New York, the timer portion of the fare kicks in whenever the vehicle is traveling less than 12 mph. Which means you're being charged 40 cents per minute PLUS the per mile charge whenever the vehicle is in ANY kind of traffic at all, or is simply moving slowly. When you compare all the extra fees, the New York fares and the Ann Arbor fares are quite comparable. But if you consider the amount of total taxi business in New York, vs. the total taxi business in Ann Arbor (let's face it, a pretty low percentage of our population utilizes public transportation regularly), our rates are quite low compared to our total business volume. Now also consider that we're probably the only business in town that is unable to set our own price for the service we offer. How many of you would still be in business if your operating expenses increased 82% while your prices were forced by the government to remain the same? Please think about that while you complain about how an extra quarter per mile is just too high for Ann Arborites to afford.
diagbum
Sun, May 15, 2011 : 6:39 p.m.
The real reason the City is considering the rate increase is because Yellow Cab (the largest company in the County) has threatened to bond as limousines instead of as taxis this year. High prices of gas are only partially to blame, the big reason is insurance rates. $500,000 worth of coverage for a taxi is around $5000 per year per vehicle, VS. $1500 per year per vehicle for $1,000,000 worth of coverage as a limousine. Raising the rate will only hurt the local taxi industry, because limousine operators can actually afford to beat the Citys metered vehicle rate, due to lower costs of doing business, and higher rates will lead consumers to use the less expensive services more. The scoop should be: the reasons why the taxi board is doing such a poor job of managing the market they proclaim to regulate, and how the city will soon be facing a federal lawsuit because of it.
Joslyn at the U
Sun, May 15, 2011 : 11:48 p.m.
I just love our goverment at work...........again WOW
Joslyn at the U
Sun, May 15, 2011 : 11:46 p.m.
If that isnt classic Tom crawford Business sense effect economy............OH BOY!
ACLABT
Sun, May 15, 2011 : 6:28 p.m.
For those of you saying how expensive it is to take a taxi, there is always AATA. The proposed increase is only a quarter a mile, which is not a lot. Keep in mind that if drivers do not make enough money driving taxi, they will have to find alternate means of supporting themselves, which means there will be a shortage of drivers, making your wait time longer. OR more cabs will go "limo" so they can charge whatever rate they wish to, since there is not regulation on their rates. As far as "rich townies" go, most people aren't rich, including students and drivers. The cost of living has in fact went up in the past three years, and the quarter a mile increase for taxi drivers doesn't even begin to cover that increase.
Joslyn at the U
Mon, May 16, 2011 : 12:03 a.m.
Diag bum hit it right on the head...as usuall
Liz
Sun, May 15, 2011 : 11:16 p.m.
There is not always the AATA--most routes are done for the day by 6pm on weekends and 10pm on weekdays. Taxis are the only "late-night" option for non-drivers.
diagbum
Sun, May 15, 2011 : 10:48 p.m.
There is always AATA - yeah that's a great argument, everyone should go ride the bus and taxi drivers make $0.
Macabre Sunset
Sun, May 15, 2011 : 5:57 p.m.
Interesting that the current maximum is more than it is in Manhattan. Ann Arbor's cab companies must be incredibly poorly managed not to be making a lot of money.
Skyjockey43
Sun, May 15, 2011 : 11:56 p.m.
If cab fares are raised while all other factors remain constant (i.e. total cab business, number of cabs on the road, etc) then cab driver income increases regardless whether cab companies charge a daily lease or a percentage of draw. So yes, it's accurate that cab driver wages aren't SET by the city, cab driver wages are very much dependent on what the fares that the city sets.
diagbum
Sun, May 15, 2011 : 11:08 p.m.
Their "wage" is NOT set by the City, it is set by the taxi company (in the form of a % split, nightly or weekly lease agreements, or various mileage formulas) and is different at each of the local companies.
ACLABT
Sun, May 15, 2011 : 8:41 p.m.
Macabre Sunset - no sense of entitlement. Each driver earns their money so therefore it's not entitlement. Their "wage" is set by the city. Also, compared to Manhattan, NY, Chicago and many other large cities where public transportation is high demand, there are a lot of empty miles for drivers in Ann Arbor or comparable cities. You are comparing a similar service in a very different city structure.
Macabre Sunset
Sun, May 15, 2011 : 7:44 p.m.
I'm always puzzled by those who feel such a strong sense of entitlement. I drive a car, so there's no need for a taxi service. I don't really care about the price, just pointing out that in the most expensive city in the lower 48, taxis are less expensive than in Ann Arbor. Since less people use taxis in Ann Arbor, there are less taxis. If you raise prices, you reduce demand, which means more sitting. Or less taxi drivers. One or the other.
ACLABT
Sun, May 15, 2011 : 6:13 p.m.
How many people In Manhattan uses taxis vs Ann Arbor? I can pretty well guarantee that the drivers sit more often in Ann Arbor than they do in a city like Manhattan. Also, it's the drivers that make the money - not the companies. I assume you like to have a raise in salary every so often? Why do you begrudge a taxi driver from having an increase? Especially when gas prices become what they have. The proposed increase comes to a quarter a mile. If you can't afford it, don't take a taxi.
jns131
Sun, May 15, 2011 : 5:55 p.m.
They are expensive as it stands. I say no, leave the pricing alone. Some of us need that service and find it is pricey as it is now. Sucks if it is passed.
Joslyn at the U
Mon, May 16, 2011 : midnight
i do hope hope that is not to controversial a statement because it is a very true reality
Joslyn at the U
Sun, May 15, 2011 : 11:59 p.m.
well it seems to me we can take the bus or ride a bike and you can find another job if there is no one for you to service.....hmmmmmmmmmm
John B.
Sun, May 15, 2011 : 9:27 p.m.
Or ride a bike....
ACLABT
Sun, May 15, 2011 : 6:35 p.m.
You can take the bus.
genericreg
Sun, May 15, 2011 : 5:26 p.m.
Gas 4.05. Not 'soar above 4.'
Snarf Oscar Boondoggle
Tue, May 17, 2011 : 6:02 a.m.
you musta missed the $4.19/gal week ... oh, and your crystal ball is a tad behidn teh times.
Joslyn at the U
Sun, May 15, 2011 : 3:16 p.m.
Im not sure if an increase is a good thing. Ann Arbor already has one of the highest rates in the country. It may be ok for rich college kids but what about the Townies? We dont have rich parents on the east coast paying our bills. Im just saying.
ACLABT
Sun, May 15, 2011 : 11:54 a.m.
I support the meter increase, because not only has the cost of gas skyrocketed, but there also has not been an increase in the meter rate in three years. Just factoring in the increased cost of living alone justifies the increase. Taxi drivers have bills to pay, families to support and it is only right to pass a minimal increase.
diagbum
Sun, May 15, 2011 : 10:46 p.m.
Taxi drivers in Ann Arbor are not making less because of the price of fuel. They're making less because there is more competition in the marketplace, because the taxi board does not limit the bond plates like most other cities. More taxis and limos on the streets means lower wages for every driver.
A2comments
Sun, May 15, 2011 : 11:46 a.m.
Take the cities in your Fire Dept story and compare rates...
ACLABT
Sun, May 15, 2011 : 11:50 a.m.
I'm not sure what comparing rates to cities in the Fire Dept story has to do with anything. Taxis are a not a comparative service to that of Fire Departments or first responders. It is a completely separate issue. I support the meter increase, because not only has the cost of gas skyrocketed, but there also has not been an increase in the meter rate in three years. Just factoring in the increased cost of living alone justifies the increase. Taxi drivers have bills to pay, families to support and it is only right to pass a minimal increase.
ACLABT
Sun, May 15, 2011 : 11:20 a.m.
I object to the use of that picture. MI Green Cab is NOT a taxi cab company and isn't obligated to charge city mandated meter rates since they are licensed as a limo by the state. Basically, they can charge what they want and are not a real taxi company.
Joslyn at the U
Sun, May 15, 2011 : 3:13 p.m.
Im sure someone was misinformed when they used that picture. But you are 100% correct. MI Green Cab is NOT a taxi cab company and they can charge what they want. Thank you for clarifying that because some folks obviously dont know. KUDOS