Taxi rate increases inadequate according to local cab companies

  • Business   Sunday, July 10, 2022   Spencer Seymour

Riding a taxi in Stratford became more expensive as of July 1st following an increase to the taxi rates approved by the Stratford Police Services Board, but local cab companies say it isn’t enough for them to make a profit.

Local taxi rates will jump from $11.50 to $13 for trips within Stratford with up to two passengers, from $12.50 to $14 for trips in the city with three or more passengers, and from $11 to $12 for seniors. Additionally, the board will also conduct a review early in the summer of 2023 to determine whether taxi fares should be increased again.

The increases that the cab companies had requested were trips in Stratford with up to two passengers going up from $11.50 to $14, trips in the city with three or more passengers increasing from $12.50 to $15, and an increase from $11 to $12.50 for seniors.

The Stratford police chief noted at the Police Services Board meeting that they received five written responses regarding the increases, all from lower-income residents who were concerned about how the increases would make it more difficult to perform necessary tasks such as getting their kids to school and attending medical appointments.

Gail Cossey, owner of Aunt Gail’s Taxi, spoke to the Times about the increase and made it clear that she feels for the residents who will bear the brunt of the increases but that local taxi companies are operating at such a loss that the City may be on the verge of seeing significantly reduced taxi service.

“We understand that everyone’s hurting [financially] but we can’t keep operating at such a loss,” Cossey explained, who added that a contributing factor to this problem has been the lack of consistency in having steady annual price increases.

“We just can’t make a living at these rates,” Cossey continued. “Because we haven’t had an increase in five years, and the last increase was the first in five years, we’re having to ask for these bigger increases. It stays the same for several years and then all of a sudden there’s a hike. In 2008, taxi fares were $8 a ride and 14 years later, we’ve just increased to $13. Over almost a decade and a half, we’ve only had a $5 increase. If you break that down over the years, that’s an increase of 35 cents a year which is way below what we need to run our businesses.”

Cossey, who worked for Stratford City Cabs at the time, received two months of notice at the end of 2019 from their insurance company that they were no longer going to insure them because taxis were deemed high-risk. This gave them until February 2020 to find a new insurance provider and the only one who still insures taxis, Stability, was able to increase their rates given the lack of competition. Cossey said she has seen a 270-percent increase to her insurance costs, which adds to the other costs associated with maintaining and running a cab.

Cossey said she calculated her costs to run her taxi to be $45,800. Some of the costs contributing to this include insurance, gas, vehicle maintenance (e.g. tire and oil changes, cleaning, repairs, etc.), and phone/user services. These costs don’t include the salary of the driver, however, which is $15 an hour. This means that, with the previous rates of $11.50 per fare, cabs would need to complete approximately 11 calls a day just to cover the taxi’s costs and another 13 calls to pay the driver’s salary. In an eight-hour shift, this would require three calls an hour which Cossey said she would be “lucky” to receive during the average day. This also means that taxis, at the previous rate, wouldn’t start making profits until their 25th fare in the day which may not actually come.

With the fare increases, taxis will now need to complete approximately 9.5 trips to cover the car’s costs and 11.5 calls to pay the driver. This adds up to approximately 21 calls in a single day just to break even, which is still a volume of calls that is above what taxis in Stratford will complete during an average day and not enough for the owners to make money.

Stratford City Cabs and Police Services Board members Mayor Dan Mathieson and Councillor Graham Bunting were contacted by the Times seeking comment for this story but didn’t respond.

Ryan Erb, Executive Director of the United Way Perth Huron, commented on the increases to the Times and said that these increases are understandable but that leaders need to do more to reduce the burden that those struggling financially will experience as a result of these fare hikes.

“Inflation hurts people with the least the most,” said Erb. “While it is understandable given rising costs that rates for taxi services are changing, what it means for those with the lowest income is significant. It may mean choosing between paying the hydro bill and eating healthy food, paying rent, or going hungry. No one should face these choices.

“So, as leaders make choices to ensure the taxi business is viable, leaders should also be advocating for living wages, increased social assistance rates, and policies like basic income.”