VEGAS INC
Representatives of Clark County’s taxicab industry have reached the conclusion that there are no easy answers to developing a workable fuel surcharge on taxi rates to fit every circumstance.
At an informal workshop Tuesday morning, representatives of the Nevada Taxicab Authority and the 16 cab companies that operate in the county determined that each potential solution generated a new problem.
At the conclusion of the meeting, industry representatives were asked to meet with a Taxicab Authority analyst to develop a formula to be considered at the authority’s July meeting, when an annual rate increase also will be considered.
Taxi passengers now pay $2.60 a mile after an initial “drop” fee of $3.30. The meters in each cab are set to charge 20 cents for every one-thirteenth of a mile traveled to assess the $2.60-a-mile rate, which includes a new fuel surcharge of 20 cents per mile.
In April, the Taxicab Authority approved an order to add the temporary fuel surcharge, which would increase again if the price of unleaded gasoline climbs to $4.45 a gallon for 30 consecutive days.
The order established a base price and gave the Taxicab Authority administrator the power to remove the surcharge if the price of gasoline falls below $3.25 a gallon. The
Taxicab Authority uses the Department of Energy’s weekly survey of gasoline prices on the West Coast as a gauge.
The purpose of Tuesday’s workshop was to develop a new formula with smaller incremental increases. The cab companies are concerned that if the cost of gasoline comes close to the trigger point but doesn’t surpass it, high fuel prices would dramatically cut into profits.
Cab company owners discussed changing the $1.20 difference between the base price and the trigger point to 75 cents and decreasing the surcharge from 20 cents a mile to 10 cents.
But doing that would introduce a new problem.
A smaller gap between the base price and the trigger point would mean the potential of more frequent changes in cab rates and modifications to taxi meters. The Taxicab Authority said modifying the meters on all of the county’s approximately 3,000 cabs costs state taxpayers about $10,000 every time there is a change, mostly in personnel overtime costs.
That doesn’t count the costs to the cab companies to pay their own compliance personnel and the expense of taking a revenue-generating cab off the street.
The Taxicab Authority generally budgets for one meter change a year.
The recent fuel surcharge meter change was completed in late April and because there was no money in the budget to pay for it, cab companies were assessed for the cost.
The board and industry representatives also touched on who benefits from a fuel surcharge. While every company gets the same surcharge, who benefits depends on the labor agreement a company has with its drivers. The Yellow-Checker-Star companies, for example, pay for all fuel, so the company collects the surcharge.
At other companies, drivers pay for the fuel or a percentage of it but don’t get a percentage of the surcharge revenue.
Company owners reminded authority board members that they have no oversight on contracts between companies and drivers and that the split of surcharge revenue is part of the negotiated labor agreement.
Yellow-Checker-Star, incidentally, operates its fleet on propane, and about a third of the taxis in Clark County use the alternative fuel.
Taxicab Authority analyst Kelly Kuzik said companies that use propane also get the fuel surcharge. He said he has analyzed operational costs and has determined that the cost of the fuel compared with its efficiency makes the surcharge appropriate for propane as well as unleaded gasoline.
Industry representatives also agreed early in the meeting that it would be more equitable for fuel surcharges to be assessed by the mile rather than on a per-trip basis.
Changing fuel surcharges to a flat rate would be complicated because state statutes require fares be assessed by metered miles, an issue that also would have to be addressed if flat-rate trips between the airport and Strip resorts ever were considered.
Taxicab Authority Chairwoman Ileana Drobkin, who said she was happy with the dialogue between the board and the industry, said the cab companies would take surcharge proposals to Kuzik and the board would consider them when it considers its annual rate increase in July.