HomeMy WebLinkAbout03-20-2012 b3 taxi rate increasecounci l
aGenda REpoRt
Meeting Date
March 20, 201 2
Item Number
B 3
C I T Y O F S A N L U I S O B I S P O
FROM :
Jay D . Walter, Director of Public Works
Prepared By :John Webster, Transit Manager
SUBJECT : TAXI RATE INCREAS E
RECOMMENDATIO N
Adopt a resolution approving a taxi rate increase based on continued high retail gasoline prices .
DISCUSSIO N
Backgroun d
Currently, there are three taxi vendors approved for operations within the City of San Luis Obispo .
They are 234 Taxi LLC, Surf Cab Company and Tri Counties-Yellow Cab Company . Due to
volatile fuel prices, taxi operators approached the City in May 2011 to request a temporary rat e
increase to address the higher fuel costs . Council approved a temporary rate increase on June 7 ,
2011, which expired on January 1, 2012 . Upon expiration of the temporary taxi rates, the tax i
operator rates reverted to the previously authorized amounts .
Fuel prices have not returned to the pre-2011 prices as previously hoped . In addition, fuel price s
have soared in the past month to as much as $4 .39 per gallon at the pump . Since fuel prices hav e
not experienced a seasonable reduction as has been seen in past years, the taxi vendors hav e
requested that a rate increase be approved . Staff has reviewed these requests and recommends a rat e
increase be approved for 234 Taxi LLC, Surf Cab Company and Tri Counties-Yellow Ca b
Company .
Rapid Fuel Price Increase s
Since 2008, the cost of gasoline has been erratic with a high of $4 .58 (June-08) and a low cost a t
$1 .74 (December-08) in a relatively short period of time, but had experienced generally lowe r
prices during the winter months . Table 1 compares the seasonal cost of unleaded gasoline cost pe r
gallon as of March 6, 2012 as posted by the California Energy Commission . While the State-wid e
fuel average is $4 .36 per gallon, the average retail cost for regular unleaded gasoline in the San Luis
Obispo region is even higher, averaging $4 .407 per gallon as indicated in the AAA fuel gaug e
report at the same website .
Table-1 Seasonal Average Cost per gallon *
California Energy Commission Data-Average Retail Unleaded Regula r
2'1)09 2O 1
January 3 .25 $
2 .01 $
3 .02
$
3 .34 $
3 .70
February'$
3 .18 $
2 .22 $
2 .95
$
3 .53 $
4 .2 9
I1nrch $
3 .56 $
2 .19 $
3 .06
$
3 .96 $
4 .36
* Data provided by the California Energy Commission on March 6, 2012, current regional average $4.407/gallon
TaxiRate increase Page 2
When approving the temporary taxi rate increase on June 7, 2011, Council used the average cost pe r
gallon of $4 .121 per gallon . Currently, the average cost per gallon, both State-wide and locally ,
exceeds the previously approved temporary taxi rates by 6%. Fuel prices are expected to remai n
volatile, with predictions that fuel costs could exceed $5 .00 per gallon by May 2012 .
Municipal Code Provisions for Rate s
Municipal Code Section 5 .20 .160 (Rate Changes) states that :
"The Council,upon its own motion, or upon application of a certificate holder, may set ,
establish, change, modify or amend the schedule of rates to be charged by all vehicles operate d
by each holder of a certificate of public convenience and necessity under the provisions of thi s
chapter ".
Pursuant to the ordinance, no rates shall be set, established, changed, modified or amended without
a hearing before the Council . Notice of such hearing is given to each certificate holder, in writing ,
by the City Clerk, at least five days before the hearing . In the past, staff has recommended that rates
be consistent as possible among all operators licensed within the City of San Luis Obispo .
Table 2 contains the current and proposed rates for each of the taxi vendors . The proposed "per mile"
rate for, Surf Cab Co and Tri-Counties Yellow Cab is $3 .50 per mile, an increase of .50 cents . 234 Taxi
LLC and Tri Counties-Yellow Cab are also proposing to increase their "wait time" by $10 .00 and
$5 .00 respectively . This rate would not exceed the $35 .00 wait-time per hour already approved b y
Council for Surf Cab Company .
Table 2 - Current & Proposed Taxi Rate s
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Pick Up-flag drop $3 .00 $4 .00 $4 .00 $4 .00 $3 .00 $3 .0 0
Pick Up Cash Discount None None None None None Non e
Per Mile $3 .50 $3 .50 $3 .00 $3 .50 $3 .00 $3 .5 0
* Wait Time Per/Hr $25 .00 $35 .00 $35 .00 $35 .00 $25 .00 $30.00
Surcharg e
(2 :30 am-6 am)
None None None None None Non e
Credit Card Use None None None None None Non e
Minimum Charge None
1 None
_None None
_None None
* Wait time is the rate that is programmed into the taxi meter and is charged when the taxi is not in motion an d
automatically changes from the per mile rate to a time mode rate on the meter . Examples of this would be the tim e
a taxi is stopped in heavy traffic or at a traffic light. A $25 per hour wait fee is approximately $.42 per minute,a
$30 per hour wait fee $.50 per minute and a $35 per hour wait fee rate is $.58 per minute.
Justification for a Rate Increas e
Staff has reviewed the requests submitted by 234 Taxi LLC, Surf Cab Company, and Tri Counties -
Yellow Cab Company and is recommending that the proposed rates be approved as fuels costs hav e
been steadily increasing and are expected to remain volatile for the foreseeable future . Attachment
No . 1 provides sample trip analysis data and the fare cost impacts for passengers using the propose d
rates .
B3-2
Taxi Rate Increase
Page 3
CONCURRENCE S
The Mass Transportation Committee (MTC) will review the proposed taxi rate increase requests a t
its regular meeting on March 14, 2012 . The MTC recommendation and meeting minutes will b e
provided as a red file for Council .
FISCAL IMPACT
There are no fiscal impacts to the General Fund or Transit Enterprise Fund as part of the taxi rat e
approval .
ALTERNATIVE
Deny or Defer Rate increase.The City Council may choose to deny or defer the request for the
proposed taxi rate adjustment at this time . Staff does not recommend this option as the temporar y
rate increase expired on January 1, 2012 and rates reverted to the previously authorized amounts ,
which are significantly lower than the average fuel prices . With fuel prices steadily increasing and
continued volatility of prices anticipated, taxi operators are finding difficulty in operating withi n
these previously established rates . If this option is chosen, Council may wish to provide staff wit h
further direction regarding taxi operating policies within the City since maintaining the current rates
may affect viability of taxi operators in the City .
ATTACHMENT S
1.Sample Trip Data analysi s
2.Draft Resolutio n
age at patsQU1a[01<u.3-2u damrat..nawautwaIter-wet,.,;as,,;a .alateiiaAaase-u120-2Ll ..t .
Attachment #1
Proposed Taxi Rate Analysis by `Sample Tri p
Under section Municipal Code section 5 .20 .030 (F)(Proposed Rates to be charged)an d
section 5 .20 .160 the Council, "...upon its own motion, or upon application of a certificat e
holder, may set, establish, change, modify or amend the schedule of rates to b e
charged by all vehicles operated by each holder of a certificate of public convenienc e
and necessity under the provisions of this chapter". No rates shall be set, established ,
changed, modified or amended without a hearing before the Council .
In order to consider this rate request staff has performed a comparative cost of the thre e
taxi operator's proposed rates for a sample trip . Tables 1-3 analyze the costs associate d
with a sample trip from the San Luis Obispo Airport to Motel Row (Monterey and Garfield )
which is about five (5 .0) miles using a wait time calculation of five minutes . The analysi s
assumes the trip takes place on a weekday at 10 am .
Wait time is the rate that is programmed into the taxi meter and is charged when the taxi i s
not in motion and automatically changes from the per mile rate to a time mode rate on th e
meter . Examples of this would be the time a taxi is stopped in heavy traffic or at a traffi c
light . A $25 per hour wait fee $.42 per minute, a $30 per hour wait fee $.50 per minut e
and a $35 per hour wait fee rate is $.58 per minut e
234 Taxi LLC :
Table 1 shows the proposed fare for a passenger using a credit card or cash :
Table 1
234 TAXI PICK UP PU CASH PER MI *WAIT TIME *WT I MIN TRIP MI *WT MILES FARE % CHANG E
CURRENT $3 .00 $-$3 .50 $25 .00 $ 0 .42 5 .00 5 .00 $ 22 .5 8
Proposed $4 .00 $-$3 .50 $35 .00 $ 0 .58 5 .00 5 .00 $ 24 .40 8 .04 %
Summary :
Total fare cost of $20 .10 using the current rat e
Total fare cost of $24 .40 using the proposed rate (8 .04% increase )
Surf Cab :
Table 2 shows the proposed fare for a passenger using a credit card or cash :
Table 2
Surf Cab PICK UP PU CASH PER MI *WAIT TIME *WT I MIN TRIP MI *WT MILES FARE %CHANG E
CURRENT $4 .00 $-$3 .00 $35 .00 $0 .58 5 .00 5 .00 $ 21 .9 0
Proposed $4 .00 $-$3 .50 $35 .00 $0 .58 5 .00 5 .00 $ 24.40 11 .42%
Attachment #1
Summary :
Total fare cost of $21 .90 using the current rat e
Total fare cost of $24 .40 using the proposed rate (11 .42% increase )
Tri Counties-Yellow Cab :
Table 3 shows the proposed fare for a passenger using a credit card or cash :
Table 3
Yellow Cab PICK UP PU CASH PER MI *WAIT TIME *WT / MIN TRIP MI *WT MILES FARE %CHANG E
CURRENT $3 .00 $$3 .00 $25 .00 $0 .42 5 .00 5 .00 $20 .1 0
Proposed $3 .00 $3 .50 $30 .00 $0 .50 5 .00 _5 .00 $ 23 .00 14 .43%
Summary :
Total fare cost of $20 .10 using the current rat e
Total fare cost of $23 .00 using the proposed rate (14 .43% increase )
SUMMARY TOTAL FARE COST S
OPERATOR CURRENT PROPOSED %CHANGE Cost/MI Current Cost/MI Proposed
234 Taxi $ 22 .58 $24 .40 8 .06%$4 .52 $4 .8 8
Surf Cab $ 21 .90 $24 .40 11 .42%$4 .38 $4 .8 8
Yellow Cab $ 20 .10 $23 .00 14 .43%$4 .02 $4 .60
Summary :
As can be seen from the summary table, the proposed fare differential for the sample tri p
between the operators is within a $1 .40 cost range (6 .09%) with a cash or credit card trip .
The higher pickup rate will be charged for any passenger regardless of the length of thei r
trip and operators are requesting an increase in the per mile rate and the wait time rate ,
which is dependent on the length of the trip .
T :\Council Agenda Reports\2012\2012-03-20\Taxi Rate Increase (Walter-Webster)\Attachment #1-TAXI SAMPLE TRIP DATA -
FARE RATE IMPACTv2 03-20-2012 .do c
Attachment #2
RESOLUTION NO . (2012 Series )
RESOLUTION AUTHORIZING A PERMANENT RATE INCREASE FOR TAXI
OPERATORS WITHIN THE CITY OF SAN LUIS OBISP O
WHEREAS,the City Council of the City of San Luis Obispo desires to provide for tax i
service for its citizens ;
WHEREAS,234-Taxi L .L .C, Surf Cab Company and Tri Counties Transit (Yellow Cab )
are the current taxi operators in the City of San Luis Obispo ;
WHEREAS,the City has received requests from 234-Taxi L .L.C, Surf Cab Company,
and Tri Counties Transit (Yellow Cab) for a permanent rate increase due to significant cos t
increases associated with the price of unleaded gasoline ;
WHEREAS,in accordance with the provisions of San Luis Obispo Municipal Cod e
Chapter 5 .20, the City Held a hearing to evaluate the rate requests by taxi operators in the City ;
and
WHEREAS,the City has determined the need for a permanent rate increase .
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Lui s
Obispo as follows :
SECTION 1 .The City Council finds that the costs of unleaded gasoline have rise n
dramatically since taxi operator rates were last approved ;
SECTION 2 . The rates submitted by 234-Taxi L .L .C, Surf Cab Company, and Tr i
Counties Transit (Yellow Cab) and reviewed by the City Council on March 20, 2012 are hereb y
approved as set forth in Exhibit A to this Resolution .
Resolution No . (2012 Series)
Page 2
On motion of , seconded by , and on the
following vote :
AYES :
NOES :
ABSENT :
the foregoing resolution was passed and adopted this day of , 2012 .
Jan Howell Marx
Mayo r
ATTEST :
Elaina Cano
City Clerk
APPROVED AS TO FORM :
/s/ Christine Dietrick
Christine Dietric k
City Attorney
Resolution No . (2012 Series)
Page 3
Exhibit A
Permanent Taxi Rates : Approved March 20, 2012