Regulators OK higher Vegas taxi fares

Wednesday, Jan. 23, 2002 | 11:05 a.m.

The Taxicab Authority of Nevada, sympathizing with cab companies' skyrocketing insurance costs, agreed Tuesday to raise the price of a cab ride.

The board, which regulates Clark County's 1,500 taxis, agreed to increase the initial cost of hiring a cab -- known in the industry as the "drop" -- from $2.20 to $2.30; the regular rate from $1.70 a mile to $1.80 a mile; and the waiting-time rate from $21 an hour to $22 an hour.

Waiting time is calculated when a cab driver waits for a customer to run an errand or when the cab is slowed to below 12 mph in heavy traffic. Cab meters calculate waiting time, but do not run concurrently with mileage meters.

The new rates take effect Feb. 1 and will be reviewed again by the board in six months when cab companies and industry regulators calculate the actual cost of key expenses in 2001 and determine if the rate increases are enough to cover those costs.

The board approved the increases without knowing the actual increase in expenses for the year, which aren't due to the Taxicab Authority until May 15. The board approved the 5 percent increase in rates in a 3-2 vote, with dissenting board members wanting a greater increase in the drop.

Because the $2.20 drop rate was last increased in 1991, the two board members, Vice Chairwoman Lia Roberts and Jo Anna Wesley-Winn, said they wanted it raised to $2.50, an amount comparable to drop rates in several other cities.

When the new mileage rate takes effect Feb. 1, customers will pay 20 cents per one-ninth of a mile. Currently, the rate is 10 cents per one-seventeenth of a mile.

No one spoke in opposition to the higher rates and cab company executives, unions and a representative of the Professional Drivers Association recommended increases ranging from 10 to 30 cents on mileage and drop rates and $1 to $3 an hour on the wait rates.

The Taxicab Authority staff first recommended that rates not be raised right away, since there were no 2001 statistics to justify the increases. Anecdotal evidence suggested that while insurance rates were climbing for cab companies, the cost of fuel was well below last year's level and possibly could compensate for the increased insurance costs.

But testimony from cab company executives convinced the board to approve an immediate increase.

Every company reported they would be paying higher premiums for liability insurance this year and some of the companies said they are paying more than double what they paid last year.

Herb Tobman, owner of Western Cab Co., said his premium is increasing from $320,000 a year to $710,000 a year -- for less coverage.

Jaime Pino, director of operations for Nellis Cab Co., said his premium jumped from $400,000 a year to $700,000, and George Balaban, president of Desert Cab, said his rate is increasing from $530,000 to $1 million a year.

Lee Martinez, an agent with Mountain West Insurance Agency, which writes policies for about 60 percent of the cabs in the state, said insurance rate increases are the result of several factors, including higher accident rates. He attributed that to increased traffic and most taxis operating in the busiest locations in the city.

But he also said cab companies pressure their drivers to keep busy and stay competitive -- and that leads to more accidents.

In addition to the higher liability-to-premium ratios, Martinez said some insurance companies are re-examining their rate structures in the aftermath of the Sept. 11 terrorist attacks.

Company executives said insurance premiums weren't the only financial matters affected by the attacks.

Bill Shranko, director of operations for Yellow-Checker-Star, the city's largest cab operation, said his company can't keep all its drivers busy enough with the downturn in tourism following the attacks. With drivers taking home less pay, turnover has increased dramatically. Shranko said prior to Sept. 11, his company had a turnover rate of about 40 drivers a month. Now it's 70 drivers a month, he said.

He added that the company usually interviews three people for every opening, meaning that personnel interview more than 200 people a month to drive cabs. A rate increase, he said, would help boost pay.

"We've never needed a rate increase as much and as quickly as we've needed one now," Shranko told the board.

Cheryl Knapp of Whittlesea-Blue Cab Co. and Henderson Taxi said that while the Las Vegas Convention and Visitors Authority has worked to get more tourists to fill hotel rooms in the aftermath of the terrorist attacks, the marketing campaign is aimed at customers who live within a day's drive of Las Vegas.

That hasn't helped the taxi industry, she said, because most of those people are driving their own cars and don't need cabs.com