Taxi Surcharges and Congestion Pricing — They Go Great Together

Taxi Surcharges and Congestion Pricing — They Go Great Together: "

The surcharge on NYC medallion taxi fares that took effect this month is a bit like a bases-loaded groundout that scores a run but kills a big inning: It does some good, but a ringing base hit could have done a lot more.

Congestion pricing paired with a significant taxi surcharge would speed cab trips and boost Manhattan's transit funding contribution. Photo: Bill in STL/Flickr.

The good, in this case, is a new pot of money for the financially strapped MTA: the 50 cent-a-ride surcharge is expected to raise $80 to $85 million a year according to transit officials, a figure confirmed by inputting the surcharge into the Balanced Transportation Analyzer (BTA) pricing model. While that will barely cover one percent of the MTA's budget, it will help patch the authority's deficit and sustain essential services like subway car cleaning and system maintenance.

A side benefit is that the discouragement of taxi use due to the surcharge should cause travel speeds in Manhattan to rise, saving time for car and truck drivers and bus passengers. With some taxi trips switching to subway or bus, transit farebox revenues will go up as well. But the surcharge is so slight -- around 5 percent of a typical fare -- that these gains will barely be perceptible: a mere 0.1-0.2 percent rise in Manhattan travel speeds and a $2-$3 million-per-year rise in transit revenues, according to the BTA. And any increase in taxi cruising to make up for the lost fares would cut into the minuscule improvement in traffic.

While the press bewails the surcharge's impact on taxi users, the people likely to suffer the most are the drivers, who on average can be expected to turn 1½ to 2 fewer fares a week. Losing $20-$25 in weekly revenue may not seem like much, but it's a bitter pill for drivers who can barely pay off their medallion leases as it is. Indeed, the taxi surcharge, enacted by the legislature as an afterthought to the "mobility (payroll) tax" last spring, may do to drivers what the new taxi credit card payment system reportedly has not: drive them to the wall, economically.

Does this mean that surcharging taxi fares to pay for transit is categorically a bad idea? Decidedly not. I'm prepared to argue that a taxi surcharge a good deal larger than 50 cents per ride is essential to the political and logistical success of congestion pricing. At the same time, congestion pricing is essential to making a taxi surcharge fair for taxi drivers and passengers. With, and only with, a cordon toll, will Manhattan traffic improve sufficiently that cabbies can book more fares per shift, not fewer. Moreover, the same speedup will enable users to save valuable time, partially compensating them for the surcharge and ensuring that the taxi sector stays robust.

To grasp these synergies, consider a variable toll to drive into the Manhattan Central Business District of $3 to $9 on weekdays and $2 to $4 on weekends, with the revenues used to cut transit fares roughly in half. Residents of Queens and Brooklyn would pony up 45 cents of every dollar in new toll revenue, because of tolls on the East River bridges. Manhattanites would contribute less than 7 cents of each dollar, less than residents of Nassau County, Staten Island and the Bronx, yet would reap most of the benefits of quieter and safer streets, cleaner air, and faster bus service.

Such a plan would be DOA in Albany. Indeed, I would argue that this very imbalance between beneficiaries and benefactors helped doom the Bloomberg cordon fee in 2008 and the Ravitch bridge tolls this year.

Now take the same toll plan and add a 33 percent taxi surcharge -- yes, a one-third increase in the mileage rate, the waiting time rate and the "drop." Instantly, Manhattan residents -- who comprise an estimated three-fourths of medallion taxi users -- would see their payment share nearly quadruple to 25 percent. Brooklyn and Queens residents' share would shrink from 45 percent without the taxi surcharge to 28 percent with it. The borough-inequity argument largely disappears.

Not only that, the taxi surcharge revenue, a cool $400-$500 million according to the BTA, could allow transit officials to eliminate bus fares. Free buses would be a particular boon in distant precincts where subway lines don't reach. As well, the rise in the taxi fare would offset the fall in the "time cost" of taxi service due to the decrease in auto traffic, and keep new taxi trips from inundating the CBD. Total use of medallion cabs would stay roughly constant under this integrated plan, with the reduction in gridlock enabling drivers to handle an extra 15-20 fares per week without booking more hours.

As for the effect on taxi users, the BTA indicates that the integrated plan outlined here would add $2.16 to the price of the average CBD cab trip while shortening the ride by 1.8 minutes. In other words, passengers pay $1.20 per minute saved -- a steep rate, for most of us, and it would be steeper for trips that venture outside the CBD, where the travel time savings would be smaller, percentage-wise. Even with a cordon toll, then, taxi surcharges can't be sold to riders as an unalloyed win-win, although riders could help themselves by cab-pooling and prioritizing their taxi use.

Of course, taxi surcharges are still justified as a means of internalizing the "social delay" costs of vehicle traffic on congested streets. They're most fair and effective, though, when coupled with cordon tolling.

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What's This: Taxi Drivers (Mostly) Like Credit Card Payments!

What's This: Taxi Drivers (Mostly) Like Credit Card Payments!: "

Photograph by flat luxe on Flickr

Aha! After a rocky start with accepting credit card payments (the striking... the threatening... the chasing... the punching), taxi drivers had conceded last year that plastic payments were helping them out. Now, two years after the program was launched, the NY Times further confirms that the credit (and debit) card payment system is mostly a success.

According to the Times, overall taxi ridership is increasing, and the number of passengers paying by card was about 20% last year and 28% last month (some people are prefer to pay by card to track their expenses). Taxi "revenues have risen about 13 percent from the end of last year, according to data collected by the city’s Taxi and Limousine Commission. And tips, which hovered around 10 percent when cab rides were cash only, averaged 22 percent on credit-card transactions this fall." Maybe it's helped by the fact that the computer screens offer suggested tip amounts when paying, though a taxi union scoffed that drivers weren't getting higher tips—and still have to deal with the 5% surcharge cutting into the tip/fare money.

One cab driver said, "If there was no credit card, people aren’t going to take taxicabs," but another referred to the delay with credit card payments, "Because of credit cards we get customers, that’s true. But if they give us cash, you can put the gas on that; you don’t have to wait three, four days."

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New 50-cent taxi tax jacks up JFK flat-rate to $45.50

New 50-cent taxi tax jacks up JFK flat-rate to $45.50: "

When New York state last week added a 50-cent tax to all cab fares in NYC, among the things it’s messed up is the $45 flat-rate price for the trip between JFK Airport and Manhattan.


The 50-cent “MTA Tax,” which went into effect Nov. 1, was approved by state lawmakers and the city’s Taxi and Limousine Commission.


The full taxi rules are online (in pdf format.)

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Cab Drivers, Riders Call Fare Increase Unfair

Cab Drivers, Riders Call Fare Increase Unfair: "

$6023.00 cab fare, by Amrit Singh

Yesterday a 50-cent surcharge was tacked on to taxi fares as part of the state's MTA bailout, starting a cab ride with a $3 base fee... and no one is happy about it.

Yesterday about a dozen drivers stood outside of Penn Station in protest, with signs that read 'Ax the tax,' and 'Even Homer Simpson would call it a Duhception.' Many of them believe the extra cost will come out of their tips, and 45-year-old cabbie Victor Salazar told the Daily News, 'We're hustling every single [moment] of our shifts. We're in the nickel-and-dime business. Everything counts.'



Meanwhile, the NY Post talks to cab riders, some of whom vow to cut down on their vehicular vice. One woman told the paper, 'I think the surcharge is ridiculous. I was very irritated when I got into the taxi today.' Will hailing a cab become more of a luxury now? Bhairavi Desai of the New York Taxi Workers Alliance told the NY Times: “On shorter fares, riders will opt to walk or take the subway."

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Drivers, passengers bemoan MTA taxi surcharge

Drivers, passengers bemoan MTA taxi surcharge: "

Did you know that taxi fares increase on Sunday? Did you know that the increase goes to the MTA?

As part of the piecemeal MTA bailout package, Albany approved a 50-cent surcharge on all metered taxi rides. That surcharge goes into effect on Sunday, and as amNew York’s Heather Haddon reports, neither cabs drivers nor taxi passengers are looking forward to it.

With the price just to enter a cab heading up to $2.50, New Yorkers are bemoaning the fees. “It was already out of control. Now it’s even worse,” Kim Dae, a so-called “frequent taxi rider” and West Village resident, said. Of course, therein lies the rub. Ms. Dae lives in the West Village, an area serviced by around 11 subway lines depending upon by which stop she lives. She might enjoy taking a cab, but the millions of us who ride the subway every day need the trains to run.

The taxi drivers, though, may have a legitimate gripe with the surcharge. Writes Haddon:

Taxi drivers are livid about the new fee, saying it will be difficult to collect and hurt their business. They are also fuming that new door stickers list the initial fare as $3, making it seem like drivers are getting a raise, said Bhairavi Desai, director of the New York Taxi Workers Alliance, which represents 12,000 drivers.

“We think it’s deceptive,” Desai said.

The tax will be itemized on ride receipts, and listed on the interior TV screens and rate cards, a Taxi and Limousine Commission spokesman said. “The TLC will continually monitor the proper implementation of the meter change,” the agency said in a statement.

The enforcement and collection issues remain unaddressed. Critics of the taxi surcharge plan have long wondered how much it will cost simply to collect fifty cents per taxi ride from the city’s licensed hacks. It will require more diligent record-keeper than that currently employed by drivers to the Taxi and Limousine Commission.

Drivers, meanwhile, as Desai points out, draw the short straw. If the surcharge is not clearly demarcated as supporting the MTA, riders will think the drivers are drawing in more revenue when, in fact, the opposite is true. Tips may go down, and the already-strained driver/passenger relationship may get worse.

To end Haddon’s piece, Straphangers Campaign head Gene Russianoff issued a platitude as a statement. “No one likes a tax,” he said, “but no one likes a sky-high transit fare or cuts to service either.” The answer, though, is simple, and it is one I have repeated numerous times. Instead of taxing the taxis, toll the bridges. The money would flow directly from the MTA and would represent a more equitable reallocation of resources than the taxi surcharge will.

On Wednesday, Lieutenant Governor Richard Ravitch told an audience at NYU that bridge tolls will one day happen. When it does, the city and its public transit will be better off for it, and we can attempt to leave this stopgap array of taxes and fees in the dust.

©2009 Second Ave. Sagas | A New York City Subway Blog. All Rights Reserved.

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Cabs Paid Their Way to the Front at JFK

Cabs Paid Their Way to the Front at JFK: "

Photo via pazzia's flickr

If you hate waiting for a cab at the airport, then imagine how the cab drivers feel, waiting hours at a time in a holding pen before being allowed to pick up passengers at a terminal.

Surely there is some way to match up the waiting passenger with the waiting taxi. No? Anyway, the Daily News reports that some drivers were paying their way to the front of the line. All whilst passengers just stood there like suckers, not bribing a soul in their own line.

All in all, 'six JFK Airport dispatchers were nabbed Monday for taking bribes from cabbies who wanted to avoid long waits to pick up fares. Queens prosecutors said the dispatchers accepted payouts of $5 and $10 to let taxi drivers avoid waits of as long as three hours.' The side business netted them hundreds of extra dollars on a busy day, but created an unfair 'playing field for all cab drivers,' according to the Port Authority's inspector general.

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$120 The Going Rate or An Unlicensed Taxi Hell Ride From JFK

$120 The Going Rate or An Unlicensed Taxi Hell Ride From JFK: "

Unlicensed cab drivers are charging tourists $120 a pop for a ride from the airports to Manhattan, and Inside Edition is mad as hell about it. In one of their priceless hidden camera exposés, airing tonight at 6 p.m., the show's muckrakers put their lives on the line to show you what you hopefully already knew: shady individuals are preying on people at the airport.

In June, a group of French tourists got taken on a crazy, high-speed chase when cops moved in on one of the illegal livery van drivers, but that doesn't seem to have deterred the grifter hacks. In the Inside Edition segment, an undercover producer posing as a French tourist is approached by one of the drivers at JFK and offered a ride to Manhattan for $65. (By law, it's supposed to cost $45.) But as they approach Manhattan, the driver announces that the price has gone up to $85, and when they reach the destination, he tells the producer to make it an even $120.

The highlight is when the producer angrily confronts the driver, and the driver promises, "I’m going to stop doing it…'cause it’s against the law." But then they catch him hustling tourists again at the airport the following week! That lifestyle's just too tempting. One producer thought he had a relatively good deal when a JFK hustler offered him a ride to Manhattan for $65, but 'the driver ignored every traffic law imaginable and reached speeds as high as 70 miles an hour on the expressway at the height of rush hour by driving recklessly in the breakdown lane.' Which just shows that you can't skimp on illegal cabs.

According to the report, security guards at the airports don't do anything to stop the drivers from swooping down on tourists 'like vultures.' A new law is awaiting the governor's signature that will make the crime a misdemeanor; as it stands now first-time offenders can only be fined.

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Ride with the Matchmaker Cabbie