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Home My WebLink About06/07/2011, PH 4 - TEMPORARY TAXI RATE INCREASE council M.6%D.* June 7,2011 j acEnaa wpoM 1e Number - N4 CITY O F SAN LUIS 0 B I S P O FROM: Jay D. Walter, Director of Public Works Prepared By: John Webster, Transit Manager SUBJECT: TEMPORARY TAXI RATE INCREASE RECOMMENDATION Adopt a resolution approving a temporary taxi rate increase based on current gas prices. DISCUSSION There are currently three taxi vendors approved for operations in the City of San Luis Obispo. Recent increases to fuel prices have caused significant increases in operating costs for each of these taxi operators. As a result, the operators approached the City to request a rate increase to address the higher fuel costs. Staff has reviewed these requests and recommends temporary rate increases for all three operators until later this year when staff returns to Council with a comprehensive update of the taxi ordinance that will address revised fare requests based on changing fuel prices Background Of the three current taxi operators in the City of San Luis Obispo, 234 Taxi LLC received approval to operate in the City of San Luis Obispo on April 1, 2008, and its rates have not changed since that date. Surf Cab Company was approved on January 19, 2010, and Tri Counties Transit Inc. (known as Yellow Cab Company of San Luis Obispo County) was approved on September 21, 2010. Both companies operate with the rates approved by Council at that time. Since 2008, cost of gasoline has been erratic with a low cost at $1.74 and a high of$4.55 in a relatively short period of time. Table 1 compares the cost of unleaded gasoline on the date approval for taxi operation was given with the cost per gallon on May 23, 2011, as obtained from the California Energy Commission. The average retail cost for regular unleaded gasoline in California on May 23, 2011, was $4.121 per gallon. Table-1 Average Cost per gallon* Operator Date Cost per gallon % change 234 Taxi LLC Aril 1, 2008 $3.608 14% Surf Cab Company January 19,2010 $3.026 36% Tri Counties-Yellow Cab September 21, 2010 $3.005 37% *Data provided by the California Energy Commission. PH4-1 Cbuncil Agenda Report–Temporary Taxi Rate Increase Page 2 As can be seen from the table, each of the operators and their corresponding fare rates, were established at times when the fuel costs were well below current cost. In two cases the fuel cost differential is over 30%, which is considered significant by staff. Of the three operators,234 Taxi is the least impacted as its current rates were approved by Council in April 2008 during a period of already high gas prices which peaked at $4.55 on July 7, 2008. By December 15, 2008, the average retail cost had dropped to a low of$1.74 and largely remained under or around $3.00 per gallon until.March 2010. Municipal Code Provisions for Rates 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 operated by each holder of a certificate of public convenience and necessity under the provisions of this 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 each of the vendors is for $3.50 per mile. 234 Taxi LLC has requested that its Pick up-Flag Drop rate be higher than the other two operators with a cash discount for passengers not using a credit card. 234 Taxi and Tri Counties-Yellow Cab are also proposing to increase their wait time rate but would still be lower than the $35.00 already approved by Council for Surf Cab. Table 2-Current& Proposed TaxiRates < C��(1 W� ^ter �r ya r. yr v l� v +_ mk ��rk � nf,Counties Yellow � `+'i i 'ix� ��= s'� i 6r ] + f:J4&haX1 uC 'b,.° 'rirre\C8b7z`"'s'�•(-.,? E, Sat QAA-C-D eM,VTF4 ose_ X011-0—;� jr '0 ed jfcgNen�_Tt; ro'os d Pick Up-flag drop $3.00 $7.00 $4.00 $4.00 $3.00 $3.00 Pick Up Cash Discount None $4.00 None None None None Per Mile $3.50 $3.50 $3.00 $3.50 $3.00 $3.50 * Wait Time Per/Hr $25.00 $30.00 $35.00 $35.00 $25.00 $30.00 Surcharge None None None None None None 2:30 am-6 am Credit Card Use None 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 and automatically changes from the per mile rate to a time mode rate on the meter. Examples of this would be the time a taxi is stopped in heavy traffic or at a traffic light. A $15 per hour wait fee is approximately$.25 per minute,a$25 per hour wait fee$.42 per minute and a$35 per hour wait fee rate is$.58 per minute. PH4-2 Council Agenda Report—Temporary Taxi Rate Increase Page 3 Justification for a Rate Increase Staff has reviewed the requests and is recommending that the proposed temporary rates should expire on January 1, 2012, or when a new rate setting procedure is approved by Council. The City and taxi operators are collaborating on a comprehensive update to the taxi ordinance (Chapter 5.20) that will be presented to the MTC on July 13, 2011. The revised taxi provisions will include new recommendations on how to provide uniform taxi fares for operators in the City and how to address revised fare requests based on changing fuel prices. CONCURRENCES The MTC reviewed the temporary taxi rate increase request at its regular meeting on May 11, 2011, and recommended it be sent to Council for approval. ALTERNATIVE Deny Rate increase. The City Council may choose to deny the request for a temporary taxi rate increase at this time. If this option is chosen, the Council may wish to provide staff with further direction regarding taxi operating policies within the City since maintaining the current rates may affect viability of taxi operators in the City. ATTACHMENTS 1. 234 Taxi Rate Increase Letter 2. Tri Counties Taxi Rate Increase Letter 3. Surf Cab Taxi Rate Request 4. Draft Minutes MTC Regular Meeting May 11, 2011 T:\Council Agenda Rcpons\Public Works CAR\2011\TRANSMCAR-TAXI RATE-FUEL SURCHARGE JUNE 7-201 I\TAXI RATE INCREASE-FUEL 06-07-201 I.doc PH4-3 U ATTACHMENT#1 234-TAXI, LLC Amy Simpson May 10, 2011 John Webster, Transit Manager Public Works Department City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Delivered via Email Subject: City Taxi Ordinance; Proposed Municipal Code Revisions Dear Mr. Webster, Thank you for the agenda and staff report drafted for the May 11 MTC Meeting. As indicated to you in recent email, I had neglected to update the wait time rate in my last communication. I have revised my written request to increase the category from $25 per hour to $30 per hour. This letter confirms my intent in that regard. As stated before, our fuel costs have skyrocketed since our last rate approval. Our costs in 2010 averaged $3.70 per gallon, yielding a gross expense of$82,784 for the 22,374 gallons purchased for our six vehicles operating in San Luis Obispo. During the first 5 months of 2011, we estimate we shall have purchased 30,660 gallons at an average (but rising) price of$4.00 per gallon for an estimated gross expense of$122,640 year to date. If our trends continue, we shall expend $294,336 by the end of the year for our six cabs. To cover our fuel and other increasing costs, including the cost of fees paid to the County Department of Weights and Measures, charges from banks for various financial services, and the rates we pay to maintain certified, safe rolling stock, we propose the rates for 234-Taxi be established at: $7.00 pick-up $3.50 per mile $30 per hour wait time This rate will be the standard charged to customers paying their fare with credit card. There would be a $3.00 discount for a cash-paying customer, yielding an effective rate of: $4.00 pick-up $3.50 per mile $30 per hour wait time We look forward to attending the MTC Meeting with you on May 11, 2011. Sincerely, Amy Simpson President, 234-Taxi Phone: 805-709-94511 fax: 805-489-9935 1 PO Box 749, Grover Beach, CA, 93483 1 info@234taxi.com PH4-4 ATTACHMENT#2 TRI COUNTIES TRANSIT CORPORATION DBA YELLOW CAB COMPANY OF SAN LUIS OBISPO COUNTY 202 TANK FARM RD. UNIT# B San Luis Obispo CA 93401 May 4, 2011 Mr.John Webster Transit Manger 919 Palm Street San Luis Obispo CA 93401 Mr. John Webster, I am writing to formally request the city of San Luis Obispo for a taxicab rate increase. The current meter rate is $3.00 start plus $3.00 per mile that and a $25 traffic/waiting fee. The new proposed rates would be as follows: $3.00 start up rate/Flag drop $3.50 per mile $30 traffic/waiting fee Due to the increasing gas prices we feel it is a fair and logical price increase in dealing with the rising cost of fuel and our cost of doing business. Statistics provided on AAA website show the current National average gas price is $4.01 per gallon vs. 1 year ago the National average was $2.90 per gallon. Our cab drivers are independent contractors and pay for their own fuel. We have attached the formal rate increase table per your request. If you have any questions regarding this request please feel free to contact me. Thank you for your careful attention to this matter. Masood Babaeian CEO Tri Counties Transit Corporation 805-603-9296 direct line PH4-5 CA- ATTACHMENT#3 y \J i 2 E TYPE EXISTING PROPOSED Pick Up $ 4.00 $ 4.00 Pick Up-Cash Discount $ - $ - er Mile $ 3.00 $ 3.50 i; Wait lime Per/1-Ir $ 35.00 $ 35.00 7 ;i Surcharge(2:30 am-6 am) $ - $ - 14 ALL FUEL COSTS ARE PAID FOR BY THE DRIVER. THEY HAVE BEEN RECEIVING $10.00 PER LOG SHEET FROM SURF CAB FOR THE PAST TWO MONTHS BECAUSE OF THE FUEL INCREASE. K SURF CAB - PETER i PH4-6 } ATTACHMENT#4 CITY OF SAN LUIS OBISPO MASS TRANSPORTATION COMMITTEE COUNCIL HEARING ROOM 995 PALM ST. WEDNESDAY, MAY 11, 2011 DRAFT MINUTES CALL TO ORDER: Chairperson Elizabeth Thyne called the meeting to order at 2:55 p.m. ROLL CALL Present: Susan Rains, Elizabeth Thyne, Art Apruzzese, Louise Justice, Stanley Yucikas, Jean Long, Jody Frey, Todd Katz, and Jonathan Ellis Staff: John Webster ANNOUNCEMENTS Elaina Cano, City Clerk issued the oath of office for new MTC members Jean Long, Jody Frey, and Todd Katz. PUBLIC COMMENTS Betty Kennedy asked that signage be installed on buses to restrict riders from eating and drinking on the bus. A. CONSENT ITEMS A-1. Approval of March 9, 2011 Regular Meeting Ms. Rains moved to approve the March 9, 2011 meeting minutes as amended. Mr. Apruzzese seconded the motion. The motion passed unanimously. B. DISCUSSION ITEMS There were no discussion items at this time. T:\Council Agenda Reports\Public Works CAR\201 I\TRANSIT\CAR-TAXI RATE-TEMP RATE INCREASE-FUEL JUNE 7- 2011\ATTACHMENTS\ATTACHMENT#4-DRAFT MTC MINUTES MAY 11-201 Ldoc PH4-7 ATTACHMENT#4 C. ACTION ITEMS C-1. Review MTC Bylaws Mr. Webster noted that staff recommended no changes to the current bylaws. Ms. Justice noted that"student" designation was listed twice in Article 2 and requested one reference be deleted. She also asked if"notice in writing" reference also covered email notifications. Mr. Webster agreed that the student designation duplication should be amended and stated he would check with the city clerk or attorney whether email was considered as a written notice to call a special meeting under section G. Mr. Yucikas moved to accept the bylaws as presented with the above-mentioned amendment regarding"student designation." Ms. Rains seconded the motion. The motion passed unanimously. C-2. Review and Approve Meeting Schedule for FY 2012 Mr. Yucikas moved to accept the meeting schedule as submitted. Ms. Rains seconded the motion. The motion passed unanimously. C-3. Nomination and Election of Officers for FY 2012 Mr. Apruzzese nominated to re-elect Elizabeth Thyne as Chair. Mr. Yucikas seconded the motion. The motion passed unanimously. Ms. Thyne nominated to re-elect Stanley Yucikas as Vice Chair. Ms. Rains seconded the motion. The motion passed unanimously. C-4. Review and Approve Draft TDA Performance Audit Eliane Guillot, SLOCOG representative, made a presentation regarding the TDA Triennial performance audit. Highlight discussion included: ■ Performance audit regarding PUC requirement compliance ■ Data compliance ■ Follow-up pertaining to prior audit recommendations T1Council Agenda Reports\Public Works CAR\201 I\TRANS IT\CAR-TAXI RATE-TEMP RATE INCREASE-FUEL JUNE 7- 2011\ATTACHMENTS\ATTACHMENT#4-DRAFT MTC MINUTES MAY 11-201 Ldoc PH4-8 ATTACHMENT#4 ■ Performance trend indicators ■ Marketing program indicators ■ .2011 audit recommendations Mr. Webster discussed the action plan contained in the staff report and the four recommendations that staff requested be forwarded to the Director of Public Works for review. There was general Committee discussion about the proposed U-Pass. Mr. Webster noted that the U-Pass was only in a concept phase at this point in time but the City would try and discuss as part of the current successor subsidy agreement negotiations. Mr. Apruzzese moved to accept the report and recommend the May 2011 Action Plan be sent to the Public Works Director for review and approval for further action. Ms. Rains seconded the motion. The motion passed unanimously. C-5. Review and Approve Temporary Rate Increase for Taxi Operators Mr. Webster reported this discussion item was tentatively slated for the June 7, 2011 Council meeting. He noted that the high cost of fuel was the reason that the current taxi operators had requested for a temporary rate increase. He also noted that the review of the proposed taxi regulations at the July 13, 2011 regular meeting would offer an opportunity to re-visit the need for a permanent rate increase. He stated he felt the temporary rate increase was fair to the taxi companies given the situation. Ms. Rains moved to recommend Council approve the temporary rate increase as outlined. Mr. Yucikas seconded the motion. The motion passed unanimously. D. INFORMATION ITEMS D-1. Transit Manager's Report D-2. Operating-Performance Reports Mr. Webster presented highlight discussion on the reports as presented and noted a new format and requested members let him know if they would like additional information added to the report. T:\Council Agenda Repons\Public Works CAR\201 I\TRANS ITCAR-TAX I RATE-TEMP RATE INCREASE-FUEL JUNE 7- 2011\ATTACHMENTS\ATTACHMENT#4-DRAFT MTC MINUTES MAY 11-201 Ldoe PH4-9 ATTACHMENT#4 MEMBER COMMENTS Fred Munroe of Ridership Development Concepts Inc was asked to provide a short project update regarding the contract with the City to administer their FTA Section 5317 - New Freedom (NF) Grant Program. The City's program is intended to educate senior and mobility challenged individuals about the availability of various transit use training materials and educational opportunities. The City's program is addressing the specific barriers (such as inexperience and understanding) with public transportation by providing actual experiences using public transportation. The "hands-on" training provided by Mr. Munroe will strengthen the ability of organizations within the community that provide services to transit dependent residents to carry on the training once the grant funds are expended. Mr. Munroe stated that he is especially pleased with the VIP (+80) pass ridership data noted in the transit managers report that indicated an 18% YTD increase over the previous fiscal year. He also asked the committee to let him know if they have any specific groups they thought would benefit from this new training. The meeting adjourned at 4:45 p.m. to the regular meeting July 13, 2011 at 2:45 p.m. Respectfully submitted, Lisa Woske, Recording Secretary TACouncil Agenda Reports\Public Works CAR\201I\TRANSIT\CAR-TAXI RATE-TEMP RATE INCREASE-FUEL JUNE 7- 2011\ATTACHMENTS\ATTACHM ENT#4-DRAFT MTC MINUTES MAY 11-201 Ldoc PH4-10 L illlilllll!II!��!lllill'Iyal� council mEm01Zan6um Date: June 2, 2011 TO: City Council Lad copr. ewatl: c COUNCD, c CDD DM a crrYMOR n tTTDM o AWCW o MECHW FROM: Jay Walter, Public Works Director C ATBIORM Mli n CtRKG o POUCE C R o PID o PAW&RCD IR° TIN °VIM=VIA: Katie Lichti9 Cit Manager o NW7MM01MDM o swcrrylam o COUNC oCmmw SUBJECT: Public Hearing Item PH 4 —Taxi Rate Increase o CLIM Public Hearing Item #4 on the June 7, 2011 Council agenda recommends approval of a temporary rate increase for the three existing taxi operators. The following analysis regarding a sample trip for all three operators provides additional information for Council review and consideration. RED FILE MEETING AGENDA Proposed Taxi Rate Analysis by Sample Trip DATE fo /J ITEM #— Y Under section Municipal Code section 5.20.030 (F) (Proposed Rates to be charged) and section 5.20.160 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 operated by each holder of a certificate of public convenience 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 three taxi operator's proposed rates for a sample trip. Tables 1-3 analyze the costs associated 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 analysis 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 is not in motion and automatically changes from the per mile rate to a time mode rate on the meter. Examples of this would be the time a taxi is stopped in heavy traffic or at a traffic light. A $25 per hour wait fee $.42 per minute, a $30 per hour wait fee $.50 per minute and a $35 per hour wait fee rate is $.58 per minute 234 Taxi LLC: Table 1 shows the proposed fare for a passenger using a credit card or cash: Option A is the proposed fare for a passenger using a credit card Option B is the proposed fare for a passenger using the cash discount r Table 1 234 TAXI PICK UP TPU CASH PER MI 'WAIT TIME 'WT/MIN RE TRIP MI 'WT MILES FA %CHANGE CURRENT $ 3.00 $ - $ 3.50 $ 25.00 $ 0.425.00 5.00 $ 22.58 Option A $ 7.00 $ 3.50 $ 30.00 $ 0.50 5.00 5.00 $ 27.00 16.36% Option B $ 4.00 $ 3.50 $ 30.00 $ 0.50 1 5.00 5.00 $ 24.00 5.90% Summary: IM Total fare cost of$22.58 using the current rate n. Total fare cost of$27.00 using Option A proposed rate (16.36% increase) • Total fare cost of$24.00 using Option B proposed rate (5.90% increase) i Surf Cab: Table 2 shows the proposed fare for a passenger using a credit card or cash: Table 2 Surf Cab I PICKUP PU CASH PER MI 'WAIT TIME 'WT/MIN TRIP MI 'WT MILES FARE °h CHANGE CURRENT 1 $ 4.00 $ - $ 3.00 $ 35.00-1 $ 0.58 1 5.00 5.00 $ 21.90 Pro osed $ 4.00 $ 3.50 $ 35.00 $ 0.58 5.00 5.00 $ 24.40 10.25% Summary: ■ Total fare cost of$21.90 using the current rate • Total fare cost of$24.40 using Option A proposed rate (10.25% 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 'wr I MIN TRIP MI 'WT MILES FARE %CHANGE CURRENT $ 3.00 $ - $ 3.00 $ 25.00 $ 0.42 5.00 5.00 $ 20.10 Proposed $ 3.00 $ 3.50 $ 30.00 $ 0.50 5.00 5.00 $ 23.00 12.61 Summary: ■ Total fare cost of$20.10 using the current rate ■ Total fare cost of$23.00 using Option A proposed rate (12.61% increase) SUMMARY TOTAL FARE COSTS OPERATOR CURRENT PROPOSED %CHANGE Cost/Mi Current Cost/Mi Proposed 234 Taxi-Option A $ 22.58 $ 27.00 16.37% $4.52 $5.40 234 Taxi-Option B $ 22.58 $ 24.00 5.92% $4.52 $4.80 Surf Cab $ 21.90 $ 24.40 10.25% $4.38 $4.88 Yellow Cab $ 20.10 $ 23.00 12.61% $4.02 $4.60 Summary: As can be seen from the summary table, the proposed fare for the sample trip between the operators is within a 6% range, assuming a cash fare. A major difference occurs with the credit card rate proposed by 234-Taxi, as it results in a fare that is 10% higher than the other operators highest fare. The main reason for this difference is that the rate increases proposed by 234-Taxi include both an increase in the pickup rate as well as an increase in the wait time rate. The higher pickup rate will be charged for any passenger regardless of the length of their trip. The other operators are requesting an increase in the per mile rate and the wait time rate, which is dependent on the length of the trip. Approving an increase only in the wait time rate for 234 Taxi would result in the closest fare structure between the operators. T:\Council Agenda Reports\Public Works CAR\2011\TRANSIT\CAR-TAXI RATE-TEMP RATE INCREASE-FUEL JUNE 7-2011\RED FILE\DRAFT RED FILE COUNCIL MEMORANDUM TAXI RATE ANALYSIS.doc