Locales Levy Taxi Fuel Fees

Several of the largest business travel destinations have introduced or are considering introducing taxicab fuel surcharges in response to increasing gas prices.

Chicago, Philadelphia, Washington, D.C., and Miami-Dade County all implemented such surcharges in the past few months, and Las Vegas and surrounding Clark County are implementing one in early July. Some other cities, such as Boston, Dallas, Los Angeles and Seattle, previously imposed some kind of taxi fuel surcharge, while New York has shown no interest in levying such fees.

Fuel surcharges have become standard operating procedure for chauffeured transportation companies, and their use in the taxicab industry is growing as well, said Dave Kilduff, managing director of ground transportation for Carlson Wagonlit Travel's CWT Solutions Group.

"I don't think anybody's going to change any action from it. People are going to become aware of it," he said.

Kilduff anticipated that fuel surcharges would remain unbundled to increase overall rates. "Before, fuel was always there, but it was included," he said. "The total is growing. All we are doing is unbundling."

Miami-Dade County in June implemented a fuel surcharge on all trips in the county based on the average national gas prices reported by the Energy Information Administration. If the price of gasoline remains between $3.50 and $3.99, the fuel surcharge is $1 per trip. If gas prices reach $4 a gallon, the surcharge will be $1.50. Gas prices have to be in place for three weeks before an increase or decrease can go into effect.

"Our taxicab drivers here are also experiencing the effects of the rising gas prices and it's hurting them economically," said Sonya Perez, spokesperson for the Miami-Dade Consumer Services Department. "It's a way to offset the increasing costs that they have to pay for gas. This is a way to help them out."

Philadelphia on June 2 implemented a new 50-cent fuel surcharge as well as a rate increase that included rolling its previous 40-cent fuel surcharge into the meter-drop rate, now $2.70. "The fuel prices were just increasing so rapidly over the past couple of months," said Jim Ney, director of the taxicab and limousine division of the Philadelphia Parking Authority.

Chicago put a new fuel surcharge into effect in April. It is currently a $1 surcharge per trip, which will remain in effect as long as gas prices for the Chicago region stay above $3.20 for seven consecutive days. If gas prices fall below $3.20 but stay above $2.70, the surcharge will drop to 50 cents.

"If there is a fare increase, then that surcharge would be rolled into the fare increase," according to Norma Reyes, commissioner of Chicago's Department of Consumer Services.

While the surcharges for Miami-Dade, Philadelphia and Chicago will remain in effect indefinitely, Washington, D.C.'s surcharge has a deadline of September 29, although that could be extended.

"We'll really have to see what the price of gasoline is at that particular time," said Leon Swain, chairperson of the D.C. Taxicab Commission. The current surcharge is $1 per trip and has been in effect for more than four months, Swain said.

Clark County, Nev., will have both a meter change and a temporary fuel surcharge taking effect as of midnight July 6, "in response to the general economic situation," said Elisabeth Shurtleff, public information officer for the Nevada Department of Business and Industry, which oversees the Nevada Taxicab Authority. The rate per mile will increase 20 cents to $2.40, along with a $2 increase to the hourly waiting time rate. A fuel surcharge of 25 cents on the metered mile will be in effect until January 2009.

"Having it be temporary just adds that extra degree of flexibility," Shurtleff said.

Seattle recently increased its taxicab fuel surcharge after gas prices in the region stayed above $3.90 for 14 days. The surcharge increased to $2 from $1.50. While the current meter rate is based on a fuel cost of $1.90 per gallon, there is a proposal before the city council to set the meter rate based on fuel costs of $4 a gallon, "to try to have the meter rate reflect what the current cost of fuel is so that we don't have to have this extra surcharge," said Denise Movius, the city's director of revenue and consumer affairs.

Although some cities have only recently implemented fuel surcharges, others have had them in place for years. The city of Dallas has had a fuel surcharge in place since 2005 and revises it quarterly based on fuel prices, said Gary Titlow, program manager for transportation regulation for the city of Dallas. The surcharge affects the entire city and Dallas Fort Worth International Airport.

Los Angeles previously had a fuel surcharge in place in 2006, but in 2007 opted to have a fare increase and do away with the fuel surcharge to make it less confusing for riders, said Bruce Gillman, spokesperson for the Los Angeles Department of Transportation.

"It just worked out better just to do a rate increase," he said. The department currently is recommending a fare increase of 8 percent to 10 percent to the city's taxicab commission due to rising fuel prices. "It's just gone up so fast, so high," according to Gillman.

Currently, the rate is $2.65 for the first one-seventh of a mile and $2.45 for each additional mile. The flat rate between Los Angeles International Airport and downtown Los Angeles is $42, with an additional $2.50 surcharge for trips originating from the airport.

Other cities, while not currently implementing fuel surcharges, are looking into their feasibility. San Francisco currently is examining whether the city should introduce a fuel surcharge.

"We're very much aware that other cities have been contemplating this," said Jordanna Thigpen, acting executive director of the San Francisco Taxicab Commission. "It is something to take into account. Prices are rising everywhere. For that reason, drivers would like to see an increase in their incomes as well."

Boston in 2005 added a 50-cent fuel surcharge, and in late June held hearings about fuel prices, said Mark Cohen, director of the Boston Police Department licensing division.

New York City does not have a fuel surcharge and does not plan to introduce one in the future, said a spokesperson for the city's Taxi and Limousine Commission.