Operations

Several Cities Now Requiring Taxi Fuel Surcharges

Posted on July 2, 2008 by LCT Staff - Also by this author - About the author

NEW YORK CITY – Several of the largest business travel destinations have introduced or are considering introducing taxicab fuel surcharges in response to increasing gas prices. Chicago, Philadelphia, Washington, D.C., and Miami-Dade County all implemented such surcharges in the past few months, and Las Vegas and surrounding Clark County are implementing one in early July. Some other cities, such as Boston, Dallas, Los Angeles, and Seattle, previously imposed some kind of taxi fuel surcharge. New York City does not have a fuel surcharge and does not plan to introduce one in the future, said a spokesperson for the city's Taxi and Limousine Commission.

Fuel surcharges have become standard operating procedure for chauffeured transportation companies, and their use in the taxicab industry is growing as well, said Dave Kilduff, managing director of ground transportation for Carlson Wagonlit Travel's CWT Solutions Group. "I don't think anybody's going to change any action from it. People are going to become aware of it," he said.

Kilduff anticipated that fuel surcharges would remain unbundled to increase overall rates. "Before, fuel was always there, but it was included," he said. "The total is growing. All we are doing is unbundling."

Miami-Dade County in June implemented a fuel surcharge on all trips in the county based on the average national gas prices reported by the Energy Information Administration. If the price of gasoline remains between $3.50 and $3.99, the fuel surcharge is $1 per trip. If gas prices reach $4 a gallon, the surcharge will be $1.50. Gas prices have to be in place for three weeks before an increase or decrease can go into effect.

"Our taxicab drivers here are also experiencing the effects of the rising gas prices and it's hurting them economically," said Sonya Perez, spokesperson for the Miami-Dade Consumer Services Department. "It's a way to offset the increasing costs that they have to pay for gas. This is a way to help them out."

Philadelphia on June 2 implemented a new 50-cent fuel surcharge as well as a rate increase that included rolling its previous 40-cent fuel surcharge into the meter-drop rate, now $2.70. "The fuel prices were just increasing so rapidly over the past couple of months," said Jim Ney, director of the taxicab and limousine division of the Philadelphia Parking Authority.

Chicago put a new fuel surcharge into effect in April. It is currently a $1 surcharge per trip, which will remain in effect as long as gas prices for the Chicago region stay above $3.20 for seven consecutive days. If gas prices fall below $3.20 but stay above $2.70, the surcharge will drop to 50 cents.

Source: Business Travel News

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