Resort Taxi Operators Seeking Significant Fare Increase

OCEAN CITY – Representatives of the Ocean City taxi cab industry publicly outlined this week their reasons for wanting to increase the per-mile rate charged to customers.

A last-minute request came before the Police Commission Monday morning by Nite Club Taxi Manager John Donohue, who was joined by Charles Stooksbury of American Veterans Taxi, to have the Town of Ocean City consider an increase of the allowable per-mile rate in the resort.

“This may be a little bit premature I wasn’t expecting to get into a meeting this quick but I do appreciate it,” Donohue said. “I would like to suggest a possible increase in the rates of the meters per mile … I think what would be fair to consider is $3 per mile.”

Currently, in Ocean City it is a $3 initial fare for customers plus $2.20 per mile after, which is Ocean City’s policy to charge 22 cents per tenth of a mile.

“The rate today was a good rate eight years ago. At $3 a mile that puts us in a position to hire and keep quality drivers,” Donohue said.

Donohue explained currently taxi cab drivers share the per-mile rate 50/50 with cab owners, which is $1.10. However, drivers are also responsible for fuel, and the owners are responsible for maintenance, advertising, insurance, etc.

Other taxi cab operators Donohue has spoken to are suggesting an increase to $3.50. The $3 per-mile rate being sought represents a 36-percent increase over the current per-mile rate.

“I think $3.50 is a big jump from $2.20. I think $3 is what is fair for our visitors here in Ocean City. The national average right now for the first three miles of a taxi ride is $12.85 that being your initial load fee and the per mile charge. Currently in Ocean City the first three miles comes to $9.60,” he said.

Donohue also manages Dewey Beach Taxi, which charges $3.90 per mile. The company he was working with prior charged $3.25 per mile.

“At $3.90, I thought this is going to be hard to make money but to my surprise it was not an issue,” he said. “What I found is as we focus on our service to the visitors in the community, such as being on time and having a well maintained and clean car it never became an issue, the $3.90 a mile, we have had very few complaints.”

Commission Chair and Councilman Doug Cymek asked Donohue if he had done any research regarding the change in costs, such as fuel, since the council established the 22-cent every tenth-of-a-mile policy in early 2010, as well as the requirement to purchase a $1,500 taxi medallion to operate a cab in the resort.

“The gas is right around the same. In fact, in 2010 it was higher but some of the things that are changing are not just the cost of living, but car parts are more expensive now,” Donohue used as an example.

Council President Lloyd Martin agreed costs have increased and supported an incremental increase of the rate per mile.

“I don’t know if $3 is the right price but I do think it is time for some type of increase of the per mile rate,” he said. “I believe we could make an incremental increase but 80 cents is a big jump for someone who is use to paying $2.20 per mile right now. You may be pushing the local customer out of the cab.”

Stooksbury of American Veterans Taxi pointed out most local companies offer discounted rates for locals.

Donohue agreed, adding Dewey Beach Taxi offers the local customer base the “$2.90 Club” where they pay $2.90 versus the standard $3.90.

“That allows us to take care of our regulars and the year-round people,” he said.

Stooksbury furthered 10 years ago in Ocean City taxi cabs charged $3 per mile until the rate was decreased to $2 and eventually raised to $2.20.

“I know it sounds shocking but inflation is out of control,” he said.

Cymek warned the pair if they are to come before the full Mayor and City Council with the request they will be asked specifics over maintenance and operating costs and would be better off conducting further research.

“You are requesting a 36-percent increase and don’t have information to back it up,” Councilman Dennis Dare said.

Dare made a motion to table the request and have the request return to the commission in March with more information and the commission voted unanimously to approve.

“I am just glad we have it on the table and we are all talking about it,” he said. “I wasn’t expecting a decision to be made today.”

This isn’t the first time taxi cab companies have come before the Mayor and City Council requesting a rate-per-mile increase due to increase in costs.

In March of 2011, a handful of operators came before the council. Some asked for a raise to $3 per mile, some asked for $2.80, while others didn’t want to tamper with the meter systems and instead of an increase agreed with charging a $1 surcharge to cover rising costs.

The issue was passed onto the Police Commission for further discussion where no action was made because owners among the taxi industry could not come to an agreement.

In May of 2011, an increase from 22 cents per tenth of a mile to 24 cents came before the council in form of a resolution for a vote. However, the increase would not be mandatory for those operators who were in opposition and did not want to change the meters in their cabs, which would also be an additional cost.

The council became divided over the thought of having taxi cab companies in Ocean City charging different rates in fear of creating competition among the businesses and creating confusion among the resort’s visitors. The resolution was tabled and no action was made.

In February 2012, Kevin Lyons, owner of Community Cab, requested an increase. Lyons sought to raise the initial fare to $3.60 and the rate per mile to $2.60.  He also sought for taxis to add a $1 surcharge per fare once gas prices reach $4 per gallon. He submitted a petition signed by 28 Ocean City taxi owners requesting the items be approved.

The Mayor and City Council did not agree with the increase in the initial fare and the rate per mile, as it would cost a customer $30 to travel from the downtown area to the Delaware state line. However, the council made a compromise and voted to approve a $1 surcharge to become effective once gas prices hit $4 a gallon.