NEWLY PASSED FARE AND LEASE CAP RULES

Rules will increase the rate of fare, increase fleet lease caps to offset cost shifts, and increase DOV lease caps to better reflect costs of different industry segments.

On July 12, 2012 the New York City Taxi Limousine Commission approved a 17% increase in taxi fares, the first change since 2006. The Taxi and Limousine Commission voted six to two in favor of the fare hike plan with one abstention.

TLC Chairman David Yassky and Mayor Michael Bloomberg had publicly supported the proposal as a means to assist drivers recover from higher gasoline prices and cost of living expenses. The TLC estimates that the average take home pay for a New York cab driver is presently approximately $130 for a 12 hour shift. It will rise to over $150 as a result of the new fare increase.

Taxicab owners and drivers will be able to charge the new fares as of Tuesday, September 4, 2012, provided that they have recalibrated their taximeters and updated their door decals. Owners MUST make these changes no later than Sunday, September 30, 2012.

Rate of Fare

• The fare increase will be calibrated depending on the distance and time traveled.
  
  
  
• The existing meter activation rate, when a passenger ride begins, will remain the same $2.50 charge.
  

The average fare would increase 17%; the unit charge for each 1/5 mile traveled, or each 60 seconds in stopped or slow traffic would be increased by $0.10 from $0.40 to $0.50.

• The commission approved a $0.10 increase, from 40 cents to 50 cents, in the rate for an individual fare unit which is the amount by which the fare rises when a cab travels about one-fifth of a mile or sits in traffic for 60 seconds.
  
  
  
• Flat airport fares will increase. A trip from John F. Kennedy International Airport to Manhattan will cost $52 plus tolls, an increase from $45.
  
  
  
• The surcharge on a trip to Newark Liberty International Airport will increase to $17.50 plus tolls, an increase from $15.
  

Set-aside for driver healthcare: to provide healthcare services (plan navigation and enrollment) and disability coverage, $0.06 from each trip will be deposited into a fund.

• In addition to the fare increase the TLC created a new six-cent surcharge on every taxi ride. This surcharge will fund a new account which will provide health care to the taxi driver community, the first ever health and disability fund created for their benefit. The surcharge will be taken directly from the drivers’ take home pay.
  

Fleet Lease Caps

Fleet lease caps are increased to offset shift of credit card processing costs to medallion owners, and an optional lease cap gas surcharge has been implemented where fleets choose to provide gas to drivers.

The TLC also eliminated a 5% charge that fleets had been permitted to deduct from each driver’s credit card sales at the end of each shift. The charge was designed to cover the costs for credit card processing and was made mandatory in 2008. Drivers will now pay a flat $10 fee every shift to cover card related costs.

DOV Lease Caps

Current medallion only lease caps are increased and a new “all-in” medallion-and-vehicle rate to better reflect current practices, and to put DOV agents on comparable footing to fleet operators has been created.

Driver income has declined 15% since the last fare increase

• Gas prices: The average price for a gallon of gas was $3.90 in March 2012, compared to $2.69 in 2006 – a 45% increase. Monthly costs for gas have increased from $500 in 2006, to $800 today.
  
  
  
• Credit card costs: Drivers must pay up to 5% of all credit card fares for processing fees. As credit card usage has increased, this has become a large expense for drivers.
  

Inflation has (and will continue to) erode real driver earnings

Historically, taxi fares have very closely tracked the consumer price index. However, since the last fare increase in 2006, CPI has outpaced taxi fares.

Other transportation costs have risen

MTA fare is a key benchmark for taxi fares. Recent (and upcoming) MTA fare increases have outpaced taxi fares.

Taxi fares in comparison cities

(Calculated using typical NYC trip: 2.8 miles traveled and 4.77 minutes waiting time; weekday at 5:00pm)

Fleet profits

At the May 31 lease cap hearing, MTBOT presented estimates of fleet revenue and expenses per medallion.
Based on additional data available to it, TLC staff has also estimated fleet profits.

Fleet operation – competitive rate of return

Credit card processing

Proposed rules raise lease caps to change the way in which fleets/agents collect credit card processing fees.

Credit card processing

• Drivers currently pay 5% to fleets on each credit card fare. (currently approximately $7.50 per shift)
  
  
  
• Given the overwhelming use of credit cards, this has been an increased cost for drivers.
  
  
  
• Staff proposes adding $9 (estimated using current credit usage rate and increased fare) to the lease cap to cover processing fees instead of drivers paying 5% on each credit card fare.|
  
  
  
• This provides opportunities for additional fleet revenue by negotiating lower processing fees.
  
  
  
• Reduces (and hopefully eliminates) driver reluctance to accept credit cards.



Optional fleet gas surcharge

Optional gas surcharge

• Gas is a driver’s second highest cost (after the lease payment).
  
  
  
• Gas prices fluctuate frequently and make it difficult for drivers to predict and plan for costs.
  
  
  
• Staff proposes to shift burden of fuel and add a $21 lease cap surcharge (at the fleet’s option) that will be adjusted every six months for changing prices.


Revised lease caps

Weekly lease caps — the weekly lease cap rate will be the most that a fleet can charge an individual driver over
any consecutive seven-day period. This will assure that drivers get the reduced rate for weekly leases and provide
a better enforcement mechanism for the agency.

DOV lease caps

Industry Notice #12-24

TLC LAUNCHES NEW, MORE USER FRIENDLY WEBSITE

Taxi/For-Hire Riders and TLC Licensees to Benefit from New Portal Approach

The New York City Taxi and Limousine Commission (TLC) is pleased to announce that its new website is live and ready to serve licensees throughout its regulated industries as well as the riding public.

The new, streamlined, and user friendly website takes a portal approach offering site visitors more direct access to sought after information by first identifying who they are (Driver, Base Owner, etc.) and then what they are there to accomplish (Renew my license, Learn more about TLC rules, Schedule an inspection, Check my license status, etc.).

The updated site also offers visitors a window into the TLC’s latest initiatives from pilot projects to Requests for Proposals such as the smartphone payment app project, to name a few.

Licensees can use the site to pay online for license renewal transactions or to check their licensing status. Base operators can schedule vehicle inspection appointments and confirm that their affiliated vehicles are driven by drivers in good standing.

(Industry Information link www.nyc.gov/html/tlc/html/industry/licenses_main.shtml).

As always, site visitors may also look forward to frequent updates to keep the content fresh and responsive to their needs.

NOTE: Those who visit the web site regularly should clear their cache to be assured the new pages will load. This is especially important for those who rely on the Current Licensees listings or access the website to submit appointment requests!

© 2013 TLC Magazine Online, Inc.