Phased-In Hike Better For Cabs

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A solid case was made this week supporting the need for an increase in the allowable taxi fare charged in Ocean City, but the proposed hike under consideration is too much too fast.

Currently, and as has been the case since 2010, in Ocean City there is a $3.20 initial fare for customers plus $2.20 per mile after.

The operators who spoke before the Police Commission this week are seeking the same initial fare but increasing the per-mile rate to $3.70, a 68-percent increase. Previously, the operators had sought a 36-percent increase in the per mile fare (to a flat $3), but their research on fuel prices and other destinations encouraged them to up their request.

To put it simpler, a cab from 75th Street to 112th Street currently costs $7.50 and the new rate would be approximately $10.50 under the proposed structure. That’s a significant increase and what’s unclear at this point is whether the entire cab industry supports this proposed increase.

It’s an important point to be unified because if an increase is approved by the Mayor and Council it does not mean every operator has to charge the maximum allowable by ordinance. There can, and almost certainly will, be cabbies who charge less to get an edge on the competition. The philosophy of make less of an initial profit in exchange for scoring more customers over the long-term plays out in business every day.

Next month’s public hearing on the topic should be a spirited affair because history shows us there is often a divide within the local cab industry when it comes to prices. If a disconnect is presented to the Mayor and Council, the elected officials will be confused as to the direction to proceed and will most likely favor the status quo.

A unified front in favor of the support should be the goal, but we think the proposal on the table will not fly with the Mayor and Council. It’s too much too fast. If increasing the per-mile fare is the favored approach among the cabbies, it’s better to phase it in over at least two years.

In an effort to avoid an inevitable price war, we think the better course for the cab operators would be to seek an increase in the flat initial fare. It may still result in some undercutting of others, but it’s a guaranteed service fee no matter the traveling distance and time. We like the concept of increasing the initial fare amount over two years, from $3.20 currently to $3.60 this year to $4 next year.

However the city and cabbies come to terms, an increase is justified, but fairness to the consumers must be the top priority.

 

 

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