Operations

Limousine & Taxicab Companies Adding Fuel Fee

Posted on July 6, 2005 by LCT Staff - Also by this author - About the author

WASHINGTON, D. C. – Limousine companies are adding fuel surcharges, and some cities are allowing taxi drivers to collect more from passengers in order to cope with the high price of gasoline.

Limousine company owner Richard Kane said fuel costs have soared 40% in the past year, forcing him to raise his fuel surcharge in May to 8%, up from 5% charged earlier this year. "Fuel is an issue, people know it and are understanding," said Kane, owner of International Limousine Service in Washington, D.C., with 40 limousines and 70 shuttle buses. "And prom only comes once a year, so the kids still want their limousines."

Dominick Rizzi, manager of Farrells Limousine Service in New York, said his company has imposed a 7% fuel surcharge. "It's impossible. We can't survive without doing it," Rizzi said.

David Johnson, president of Ace Executive Limousine in Los Angeles, said higher gas prices have raised his company's costs by at least 15% in the past year, "definitely cutting into profits." He is charging new customers more, but has held off on higher prices for established customers. Taxi drivers are having a harder time with rising gasoline prices since they can't simply raise rates to pass on their additional costs to passengers. Taxi fares are generally set by municipal governments, so drivers can't charge more as their costs go up.

A few months ago, Empire Cab driver Akram Mohammed, who works in Washington, was paying $15 for a tank of gas. Now he's paying as much as $35. "We have to work everyday. We cannot stop just because gas prices go up, so it gets paid out of pocket," he said.

To help cab drivers, officials in Washington approved the addition of an emergency fuel surcharge of $1 per trip. Rates also have gone up recently in Chicago, Baltimore and Milwaukee. Philadelphia regulators are scheduled to vote on a fare hike on June 27.

Simon Garber, who owns cab companies in New York, Chicago and Moscow, said income for his drivers has dropped 15% in the past year.

In New York, a city that adjusts taxi rates on a long-term basis, rates went up in May 2004, before the latest surge in gas prices.

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