Competition has Vegas cabbies taking prisoners for tips

Even as the local taxi industry posted its best financial numbers ever, it has suddenly run into a bizarre side effect: hostage taking.

Although the incidents reported to the Nevada Taxicab Authority have been characterized as minor, officials view them as a potentially troubling development that could give the city a black eye.

Rising ridership and revenues have led the authority in recent months to grant temporary and permanent permits that allow cab companies to put more cars in the streets. But that has spurred driver complaints, most recently at Tuesday's authority board meeting, that the extra cabs dilute their income, sometimes below minimum wage.

As a result, authority administrator Charles Harvey reported that about a half-dozen passengers filed complaints this month, a busy time for conventions, about drivers demanding tips or higher tips. A couple of instances devolved into drivers locking the door and holding passengers against their will to reinforce their point.

By contrast, he said he could recall only one other similar example since he took the post in May.

Harvey did not discuss specifics of the cases except that the trapped passengers were not held for long, and the disputes were settled without further incident.

"Some drivers have said they feel forced to do whatever they have to, to make money," Harvey said.

The authority is still investigating, he said.

"We do not condone this at all; it's illegal," said Sam Moffitt, a steward at the Industrial, Technical and Professional Employees Union, which represents drivers at two companies that own four brands.

"Sometimes, you get a good ride and get tipped real well and other times you get a bad ride and get stiffed,'' Moffitt said. "But overall, I think it evens out."

This comes as the sector has surpassed prerecession peaks for several benchmarks. Although other parts of the visitor industry have recovered unevenly, with visitor totals on track to hit an all-time high but hotel room rates and airline traffic still depressed, cab companies have benefited from regulated rates not subject to discounting.

Total revenues from carrying passengers rose 12.3 percent last year to
$382.5 million, as the number of trips driven, revenue per driver's shift and revenue for each trip all climbed.

"Our figures for the year are the best in the history of the taxi industry, so we are seeing trends that we like," said Bill Shrenko, chief operating officer for Yellow-Checker-Star Transportation.

"We are doing very, very well," added Jason Awad, the owner of Lucky Cab Co.

"Tourism and the economy are doing better, without a doubt."

The recently concluded International Consumer Electronics Show ran about 8 percent to 10 percent better for Lucky than last year's edition, Awad said, giving him confidence that the good times would continue.

Revenues had reached $335.4 million in 2008, but stumbled the next year to $323.9 million. Since then, aided by higher rates and more passengers, particularly as convention traffic rebounded, the good times returned for cab companies.

In August, the authority board approved new permanent medallions for the first time in four years to cope with the surging demand. A medallion, which must stay on the vehicle while it is in revenue operation, acts as a permit that allows the authority to control the number of cabs on the street at any given time.

Also, the authority occasionally allocates short-term medallions to handle a big event, such as CES or the Super Bowl.

The temporary medallions, by themselves, do not cause a problem, said Moffitt. But he and other drivers and union representatives contend that combined with the new permanent medallions, the authority has put too many cabs on the street and has severely cut individual driver income.

For example, he cited Yellow-Star-Checker numbers that showed 11 of 24 shifts on Thursday did not generate enough revenue to pay the drivers minimum wage.

Take-home pay is often based on a sharing of the revenues between the driver and the company.

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.