Operators Suggest Data Supports OC Taxi Fare Hike; Flat Maximum Proposed
OCEAN CITY – After conducting research, taxi cab representatives returned to Ocean City officials with a higher per-mile rate increase than what was originally proposed, and the request will be sent to a public hearing before Mayor and Council deliberation.
Last month representatives of the Ocean City taxi cab industry, Nite Club Taxi Manager John Donohue and Charles Stooksbury of American Veterans Taxi, publicly outlined reasons for wanting to increase the per-mile rate charged to customers before the Ocean City Police Commission.
Currently, in Ocean City there is a $3.20 initial fare for customers plus $2.20 per mile after, representing Ocean City’s policy to charge 22 cents per tenth of a mile. The fare was last updated in 2010.
Donohue explained currently taxi cab drivers share the per-mile rate 50/50 with cab owners, which is $1.10. However, drivers are also responsible for fuel, and the owners are responsible for maintenance, advertising, insurance, etc. Donohue recommended increasing the per-mile rate to $3, which is a 36-percent increase.
Unable to provide research on the increase in fuel, maintenance and the cost-of-living at that time, the commission voted to have Donohue return for further discussion based on that kind of information.
This week Donohue returned providing the commission with research conducted by Norman Mullinix of At the Beach Taxi, LLC.
Using information provided by the Bureau of Labor Statistics, Mullinix compared the price of fuel and cost-of-living between 2009 and 2013.
In 2009, the average gas price for the year was $2.34 compared to the average gas price for the year in 2013 of $3.52, a $1.18 increase, or 50.5-percent.
Using the current per-mile rate of $2.20 multiplied by the increase of fuel of 50.5-percent, the proposed per-mile rate rose to $3.31.
Using the increase of grocery prices and electricity, the average cost of living increase today is 18.68-percent or 41 cents.
Again, using the current per-mile rate of $2.20 multiplied by 18.68-percent raised the proposed per-mile rate further to $3.71.
“With the cost-of-living increase at 41 cents per mile plus the cost of gas increase at $1.11 per mile, it is justified to ask for $3.71 per mile for a taxi fare,” Mullinix said.
Mullinix also compared taxi rates from surrounding beach communities. Beach Taxi in Virginia Beach charges 40 cents per eighth of a mile, which totals $3.20 a mile, Myrtle Beach Cab charges $2.80 a mile, and Atlantic City Taxi Cab charges $3.80 for the first tenth of a mile and $0.40 for each tenth of a mile thereafter, which totals $4 a mile with a $13 max, as per city ordinance.
According to Google Maps, Ocean City is 9.2 miles long from South Division St. downtown to 146th Street at the Maryland/Delaware line and includes 154 blocks. A new rate of $3.80 per mile would equal 25 cents per block counting the $3.20 initial fee, so the maximum meter will read $38.16. With the current rate, a maxed meter would read $23.44.
“It has been said in the past by City Council that with a higher taxi rate people uptown cannot afford a taxi downtown. Therefore, I propose a max of $20 inside Ocean City, which would be the same as the maximum taxi customers have been charged under the current rate,” Mullinix said. “At the same time, taxis could make a little more on the ‘short hops’ they frequently do. For example, a ride from 112th Street to 75th Street in Ocean City under the current rate is around $7.50. The new proposed rate would only be about $10.50.”
Once presenting Mullinix’s data, Donohue again expressed the need to raise the per-mile rate to hire good quality drivers and to keep the taxis well maintained.
“We are public transportation … and a rate increase is not about greed it is about going ahead and putting the money into the cars to have a safe car,” Mullinix said. “The numbers support our request of a taxi rate increase based on today’s economy to be $3.70 a mile.”
Mayor Rick Meehan pointed out by city ordinance $3.70 would be the maximum per-mile rate allowed to be charged. The ordinance does not require every cab company to charge that rate.
“What you really need to consider is the price war you’re going to create because I think you already have one at certain times, and it is all brought about by competition,” the mayor said. “If you raise it too high, you are going to have a couple people utilize that and everybody else is going to undercut it, and the next thing we are going to get is complaints from the taxi industry that people aren’t charging the right amount, which I think will happen if you make such a dramatic jump. I think you are doing the taxi industry a disservice by making a jump to that degree.”
Meehan furthered an increase could result in a loss of business at first.
“Once this request moves before the full Mayor and City Council during a public hearing, you’re going to want to make sure the rest of the cab companies support this and support it for the right reason,” the mayor said. “Not so they can now charge $2.75 and undercut you. I think it is a pretty big change, and probably too big of a jump to do at one time.”
Donohue responded he is prepared to take responsibility for the increase and plans to educate the public on the reasons for the increase.
“The $3.70 may repress business but at the same time I am willing to be the caretaker of that … Yes, we are going to lose some but I think in the long run we will get it back,” he said. “We have to have some type of adjustment at fair market value, and we need to get it done.”
Councilman Dennis Dare reminded Donohue one of the concerns expressed during last month’s meeting was the issue with cab drivers suffering from short distant fares and asked if an increase in the initial fare was considered instead.
Donohue responded there are several options on the table between an increase in the initial fare and the favored increase in the per-mile rate as well as placing a $20 cap on fares within Ocean City limits.
“My opinion on this is some type of increase is justified,” Meehan said. “It has been a period of years since it has been looked at. I don’t agree with the degree to which it has been presented but that is for discussion.”
Commission Chair and Councilman Doug Cymek also agreed with an increase but preferred for a per-mile increase to be phased in over a multi-year time period to avoid sticker shock.
Dare made a motion to move forward with a favorable recommendation to the full Mayor and Council to hold a public hearing over the matter, and the commission voted unanimously to approve.