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Howard Stutz

Taxi rate jump fare game

13 June 2008

LAS VEGAS, Nevada -- The cost of catching a cab in Las Vegas this summer may increase because of rising gasoline prices.

The Nevada Taxicab Authority will ask its board of directors on June 23 to implement a temporary 25 cents per metered mile fuel surcharge to cover higher gasoline costs. The price of unleaded fuel is now roughly $4.13 per gallon.

Under the proposal, the fuel surcharge would be revisited by the board in January and could be extended, increased, decreased or eliminated.

However, if the average cost of a gallon of unleaded fuel rises to $5 a gallon for five consecutive days, the board can consider additional adjustments to the fuel surcharge.

The agency is also seeking a permanent 20 cents per mile increase to the metered mile, raising the cost to ride a cab from $2.20 per mile to $2.40 per mile. Also, wait time charges will rise $2 to $30 an hour.

In May, the average cab ride in Clark County cost $12.85. The average distance traveled is four miles, so the fuel surcharge would add $1 per four-mile trip. Taxicab Authority Administrator Gordon Walker said the proposed permanent rate adjustments would increase the average cost of a cab ride by 6.57 percent. However, the $3.30 fee for initially hiring a cab would not change. When the 4 percent rate of inflation is factored, the approximate rate increase is 2.57 percent, Walker said.

Fuel surcharge costs are not included in the permanent rate increase projections.

Walker said taxicab company operators and drivers are seeking the rate increases and fuel surcharges because rising gasoline costs have cut into revenues. In addition, ridership through May is down 1.83 percent from a year ago, which Walker blamed on the sagging tourist market. There are now 2,213 taxicab medallions in Clark County operated by 16 taxicab operators.

"This was something we were hoping that wouldn't happen," Walker said. "A fuel surcharge was asked for by the industry in May. We were already getting ready for our annual rate review, so it made sense to take it up at this time."

The Taxicab Authority implemented a 20 cents-per-mile fuel surcharge a year ago, but the fee was rolled into permanent per-mile rate increase after a few months.

"If anybody has a crystal ball on what's going to happen with gasoline costs, I would appreciate they send it my way," Walker said. "We just don't know what's going to happen in the future, but we know drivers and companies are being hit pretty hard right now."

Anticipating a large audience, the Taxicab Authority moved the 8:30 a.m. meeting from its offices on East Sahara Avenue to Cashman Center.

Mark James, chief executive officer of the Frias Holding Cos. which operates 650 permanent Clark County taxicab medallions, said the fuel surcharge is not a large figure compared with those in other cities. Some locations, such as Washington, D.C., will add between $1 to $3 per passenger per trip to pay for the higher cost of fuel.

Walker said the local taxicab companies have deals and methods in place for fueling their vehicles. Frias and Whiittlesea truck in their own fuel and have pumps on their lots, paying current consumer market prices. Yellow-Checker-Star vehicles operate on propane. Other companies have contracts with retailers that let drivers fill up at consumer prices. Cab rides on the Strip are often just a few blocks. James said not only has Frias suffered financially, so have the drivers. Take-home pay, he said, has diminished because of fuel costs.

"Gasoline prices have increased 33 percent in the last 12 months," James said. "Based on our contracts, our drivers pay for a percentage of the fuel, so they're impacted as well. We agree with what the Taxicab Authority staff is proposing."

Some cab drivers don't believe they will see the benefits of the proposed rate increase and fuel surcharge on their paychecks. Many thought higher costs would reflect in their tips.

"If rates go up, my tips go down," said Gene Jackson, a driver for Desert Cab, while waiting for a customer outside Binion's.

Jackson pays 50 percent of his cab's fuel costs. Some drivers have to pay up to 75 percent of the gasoline bill. They are reimbursed through salary and tips. However, as the economy has soured, tips have decreased.

"People don't tip like they used to," said Art Reynolds, a driver for A-NLV Cab, who has been a Las Vegas taxicab driver for 29 years. "The rate increase might help, but the customers will just pay even less in tips."

James said his company, which operates Ace, Union, Vegas-Western, North Las Vegas and Virgin Valley branded cabs, has been switching to more fuel-efficient four-cylinder vehicles because of the rising gasoline costs.

The company is also reaching out into the local market, James said. Ridership by locals has increased because residents don't want to drive. He said the company is looking into ways to grow local ridership.