New York Cab Fares to Jump 17%

The Taxi and Limousine Commission (TLC) of New York has approved a move to increase cab fares by an average 17%. This is the first change to taxi fares since 2006, with the commission voting six to two in favour of the plan. Drivers have considered this a victory, as they had argued that their take-home pay suffered from a higher cost of living and rising fuel prices. The measure had also been publicly supported by city officials – including Mayor Michael Bloomberg and TLC chairman David Yassky – as a way to help cab drivers recover after their financial position has slipped over recent years.

The taxi fare hike, which will be made effective in September, will vary depending on the distance and time between cab rides. The TLC hasn’t changed the existing “drop” rate – a flat fee of $2.50 assessed when a meter is started. The rate of an individual fare unit will be increased from $0.40 to $0.50. This is the amount that the fare rises when a taxi drives about one-fifth of a mile or is sitting idle for one minute.

Flat fares for airport transport will proportionally rise as well. The surcharge for a journey to Newark Liberty International Airport will jump from $15 to $17.50, and from $45 to $52 on a trip from John F. Kennedy International Airport to Manhattan. On top of this, the TLC has also developed a new $0.06 surcharge for each cab ride. This fee will fund a new account that will provide health care to the large number of uninsured cabbies. This will come out of the drivers’ take-home earnings.

Aside from this, drivers can also celebrate the elimination of a 5% charge that fleets were able to deduct from every drivers’ credit card sales at the end of every shift. The fee intended to fund back-office costs for processing credit cards after machines for the payment option were made mandatory in 2008. The charge has become a big source of tension among taxi drivers since credit card payments have soared. Instead of the fee, drivers will pay a flat $10 charge after each shift to cover costs related to credit card processing. Yassky says the change means they won’t feel like they have to press customers to pay in cash.

Cab drivers have been struggling to keep pace with rising business costs. According to the TLC, the average take-home pay in New York is only $130 for a 12-hour shift under the current rates. With the new changes, take-home pay will increase to an average $150 over a 12-hour shift. However, the commission says the measures won’t help the industry as a whole. The TLC has approved a hike in the lease cap, which is the amount fleets and medallion owners can charge individual drivers to hire a cab for a 12-hour shift. Metropolitan Taxicab Board of Trade spokesman Michael Woloz says this increase will more than offset the elimination of the 5% credit card fee.

TLC spokesman Allan Fromberg says about 600,000 people take 450,000 trips in yellow taxis every day in New York. The average fare in the city ranks fourth-lowest among 12 cities around the world that he describes as having highly regulated cab industries with large taxi-riding markets. This position is just ahead of San Diego, Chicago and Washington. With the new changes, however, the city will rank sixth highest behind Tokyo, which is ranked first. Los Angeles and San Francisco are also ranked in the top five.