July 11 (Bloomberg) -- New York City’s Taxi and Limousine Commission plans to vote tomorrow on a proposed 17 percent fare increase and cabdriver Aamir Choudhery says it can’t come soon enough.
Choudhery, 32, works a 12-hour daytime shift for which he said he’s lucky if he nets $150. That’s after he pays $700 a week for his share of the lease for the cab and its medallion, or operating license, plus gasoline and credit-card fees.
If approved, New York cab fares would still trail those in Tokyo, London and Las Vegas, according to the commission. The increase also would be less than gains since 2006 in prices of staples such as bread as well as hamburger and movie tickets, it said. For riders, the raise would be about $2 for an average trip, to $15, said Allan Fromberg, a commission spokesman.
“The driver is trying to survive and support his family,” Choudhery said as he steered through midtown Manhattan traffic. The Pakistani native said he supports his wife and two children in a $1,600-a-month Queens apartment by driving seven days a week. He’s been doing it for two years, he said.
Fleet owners object to the increase while pushing a plan to raise what they can charge their drivers.
If approved, cab meters in September would start clicking 50-cent increments for each fifth of a mile (0.3 kilometer) traveled, or for each minute in stopped or slow traffic, up from 40 cents. A ride between John F. Kennedy International Airport and Manhattan would go to $52 from $45, plus tolls, and the Newark Liberty International Airport surcharge would be $17.50, up from $15.
About 600,000 people take 450,000 trips in New York’s yellow cabs each day, Fromberg said.
Among 12 cities worldwide that Fromberg describes as having “highly regulated taxi industries with large taxi-riding markets,” New York’s average fare ranks fourth-lowest, ahead of Washington, Chicago and San Diego. Under the proposed new fares, New York’s would be sixth highest, behind first-place Tokyo as well as San Francisco and Los Angeles, Fromberg said.
Raising the fares, says commission Chairman David Yassky, is all about drivers such as Choudhery. They haven’t had an across-the-board boost since 2004, when rates rose 26 percent. In 2006, the meter-charge for cabs in slow or standing traffic climbed to 40 cents per minute from 40 cents every two minutes.
“Is it reasonable to ask passengers to pay a little more so that drivers can pay their rent and put food on their families’ table? We think it is, and that’s how we approach this issue,” Yassky said yesterday in an interview.
$12 an Hour
A driver would take home an average of $146 for a 12-hour shift, up from the current $125, bringing the day’s net up to what it was in 2006, before gasoline prices jumped 44 percent and before a 5 percent fee was imposed on them for fares paid by credit card, according to the commission.
Yassky said he expects the fare increase to pass. The Metropolitan Taxi Cab Board of Trade, representing fleet owners, opposes the change. The group has pressed the commission to raise the “lease cap,” the amount of money members can charge drivers for financing the cars and their medallions -- licenses required to operate yellow cabs.
Fleet owners, in a statement distributed by Michael Woloz, a lobbyist, characterized the proposed fare increase as “a lopsided plan that has unsurprisingly been heralded by one interest group -- the New York Taxi Workers Alliance, which purports to represent drivers.”
Yassky and Mayor Michael Bloomberg are “retaliating against the taxi leasing companies” for lawsuits they’ve brought against a city plan to permit livery street-hail service in boroughs outside Manhattan, Woloz said. The litigation has delayed the city from reaping revenue from new taxi medallion sales, threatening to open a more than $600 million hole in its fiscal 2013 budget.
Fleet owners have done well over the years, Yassky has said. Since 2006, those who hold New York taxi medallions have been rewarded with a tripling of their investment, to about $1 million from $314,000 per medallion, commission figures show.
Using revenue and expense estimates presented by the fleet-owners’ group at a May 31 public hearing, the commission has calculated an average cab’s net income comes to $37,750 a year, not including advertising fees from rooftop placards and back-seat video displays on credit-card reading devices.
“For the smallest fleets, this is profit of $925,000 per year,” Fromberg said by e-mail. For larger fleets of 200 cars, the annual profit could reach $7.4 million, he said.
“It’s just greed,” said Bhairavi Desai, executive director of the Taxi Workers group. “They’ve had it good for so long they want to maintain that sense of power over the drivers.”
Drivers now pay the 5 percent credit-card banking and processing costs -- an average $7.50 in each 12-hour shift -- a gripe among hacks since 2007, when the city began requiring the payment option. The fees have become increasingly burdensome as more passengers choose the payment method each year.
The proposed changes would make fleet owners responsible for the credit-card fees, while requiring drivers to pay the fleet owners an additional $9 a month to offset that cost.
“Drivers don’t object to paying the additional $9 because while we may take a bigger hit now, in the long run it will be better as use of credit cards increases,” Desai said.
Drivers also favor a provision that would require them to pay 6 cents for each trip into a fund for health and disability benefits, she said.
Passengers won’t care if the fares go higher, either, said Choudhery, who shares the leasing costs with a partner who drives at night. They operate a Ford Escape Hybrid, which cut his fuel bill to about $10 a day from $40, Choudhery said.
“It’s not the fares going high that they complain about so much as they just want good service,” he said of passengers.
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