Board approves fare increase

Las Vegas cab passengers will pay an additional 45 cents a mile starting July 6 after the Nevada Taxicab Authority voted unanimously Monday to increase rates in reaction to rising gasoline costs.

The fare boost includes a permanent 20 cents per mile charge and a temporary 25 cents per mile fuel surcharge that could be increased if gasoline prices climb above an average of $5 a gallon.

The five-member board spent almost two hours listening to drivers, union representatives and taxi company executives on how the rate increase should be implemented. Some drivers argued against any fare increase, believing the higher costs would cut into their tips.

However, most of the speakers said the average cost of a gallon of unleaded gasoline is causing taxicab companies to spend more for fuel and is cutting into drivers' take-home pay. According to Taxicab Authority staff, unleaded gasoline averaged $4.13 a gallon on June 16 and has risen $1.57 a gallon since last September.

Jay Nady, the chief executive officer of A-Cab Co., told the Taxicab Authority board it cost him $30,000 to fill up his fleet of taxis last week. In October, the price to gas up the fleet was $17,000.

"We're in a real crisis, and the (Taxicab Authority) staff put together a very good recommendation," Nady said.

Some speakers worried that prospective cab customers might be scared away by the increased rates and seek other modes of transportation to get around Las Vegas. The Taxicab Authority staff told the board that Las Vegas is not the only city tacking on fuel surcharges at this time.

"Given with what has gone on with the economy, this is appropriate," said Taxicab Authority Chairwoman Kathryn Werner-Collins. "As far as the sticker shock issue, we are not the only jurisdiction looking at rates and fuel costs. We're not the jurisdiction paving the way on this."

Washington, D.C., and St. Louis have both implemented fuel surcharges of 95 cents to $2 per trip, Taxicab Authority staff said. Administrator Gordon Walker said the rate stickers inside taxicabs will show an increase from $2.20 per mile to $2.65 per mile, reflecting both the permanent and temporary charges.

The initial $3.30 fee for hiring a cab will not change, but wait-time charges will rise $2 to $30 an hour.

Steven Lenett, a driver for Whittlesea, said good drivers will continue to make their tips despite any rate increases. He said many customers expect cab fares to go up, similar to what consumers are experiencing with the rising cost of other goods and services during the current tough economic times. "This should be good for the drivers," Lenett said. "Good drivers will make good tips."

Werner-Collins thought most taxicab customers would base a tip on their overall bill.

"I hope for drivers the increase will have a positive impact on the rate of the tips and their ability to earn them," she said.

At most Las Vegas-area taxicab companies, drivers share in the cost of fuel, anywhere from 25 percent to 75 percent. New drivers at some companies pay 100 percent of the fuel costs during their first year of employment.

Union representatives asked the Taxicab Authority to regulate how cab companies share the fuel surcharge with their drivers. Werner-Collins said that would be impossible to oversee because different companies have different collective bargaining agreements with drivers. Some smaller taxicab companies are nonunion.

"The language in those contracts are all different," she said.

The fuel surcharge can be eliminated by Walker without taking it to the board if the average cost of a gallon of gasoline drops below $4 a gallon for 20 consecutive days. However, the Taxicab Authority board can consider raising the surcharge if gasoline goes above $5 a gallon for five consecutive days. Whatever the cost of fuel, the Taxicab Authority board will revisit the surcharge in January.

Several speakers suggested the temporary fuel surcharge be made permanent. Five times since 2003, the Taxicab Authority has implemented temporary rate increases, only to eventually make them permanent.

Eldon Alvord, a shop steward with the Industrial, Technical and Professional Employees Union that represents some 2,000 Las Vegas taxicab drivers, said no one believes gasoline prices are going to drop anytime soon.

"(The rate hike) should be permanent, but it should also be a rate increase that everyone could share," Alvord said.

Through May, taxicab ridership in Las Vegas is down 1.8 percent compared with a year ago. However, the average cost a consumer pays for a trip is $12.89, 11.6 percent more than they did a year ago. Taxicab rates went up 20 cents a mile last October. The average trip in Las Vegas is four miles.

Taxicab Authority staff asked the board to allow the increase to take effect after the Fourth of July in order to keep down overtime costs to change out rate cards and taxicab meters.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.