Cab surcharges could rise with gas prices

March 13, 2008 5:03:39 AM PDT
Taking a cab in Chicago could soon cost a little more thanks to crude oil prices.The city council is once again considering a temporary surcharge to help cabbies off-set the high price of gasoline.

The proposal failed the last three times it surfaced. But this time, it has been retooled and has the support of Mayor Daley.

The city is saying that this proposal differs from others in the sense that it is much simpler to put into effect. And it's also based on a similar measure that exists in Seattle. It falls far short of the 25 percent cab fare increase that taxi drivers have been seeking since last year.

But the city says that it is a fair offer and that until a permanent cab fare increase can be negotiated, this should relieve some of the pain drivers have been feeling at the pump. It's been four years since the last taxi cab fare hike, and while many will no doubt say fares are high enough, cab drivers will tell you the rising gasoline prices over the last few years mass eaten up their profit margins.

On Wednesday, the city responded not with a fare hike but with a proposal for a temporary surcharge, one that would be pegged to fluctuations in gas prices.

"I think what's important here is that we are trying to absolutely give relief to the taxi drivers," said Norma Reyes, Commissioner, Consumer Services.

The proposed surcharge would allow 50 cents to be added to all cab fares if the average gasoline price is higher than $2.70 a gallon for seven consecutive business days, going up to a $1 surcharge if the price exceeds $3.20 a gallon for seven consecutive business days. That surcharge would then be lifted when the price per gallon of gas dropped below $2.70 for a week.

"There are many other businesses that are impacted by gas prices when they go up. They don't get to raise their prices like that," said Mthunzi Dewa.

"That will open the door up to any taxes as prices go up and down. I think it's a bad idea," said Selwin Skevin.

Cab drivers aren't particularly happy about the proposed surcharge, either, saying it's simply not enough to change the hit they are already taking.

"It should be much higher than that. What can you buy for 50 cents? Can you buy a candy bar for 50 cents? I think it should be more than that. $1 should be the minimum," said driver David Mangem.

"Most other people in Chicago and in the United States receive a raise every year with their jobs. And taxi drivers are no different. We need fare compensation just like everyone else and we're entitled to that," said driver Melissa Callahan.

Once put into effect, the surcharge will expire when the actual fares are increased by the city council sometime in the future because this surcharge would sometimes be in effect and sometimes not, passengers would be informed in the back seat of all cabs. Also this proposal is not yet been implemented. It will be voted on in the next two weeks.

All Chicago area drivers were paying premium prices for gasoline Wednesday. You probably woke up Wednesday morning to discover a sharp spike in the cost of fuel. And that jump at the pump is happening all across the country.

It's a good day to have filled up yesterday. Gas prices are at record levels now. The average cost of a gallon in the U.S. is now $3.25 a gallon.

You can bet if the prices are high nationally they will be high in Chicago, considering Chicago always has some of the highest prices in the country.

Why the spike? Well, it's not about supply or problems at the refineries. It's all about the price of crude oil.

Gas prices fluctuate so much, one gas station now displays its prices electronically versus the old fashioned manual way. Filling up the entire tank has become a thing of the past.

"I put in $5 for work and back," said Jim Stange.

"Just enough to go downtown and come right back," said Pat Johnson.

"I never fill it up. The price is so high. I never get to fill it up - sometimes $10, sometimes $5, $10, as high as I can go. That's all I can afford for gas these days," said Verna McQueen.

Experts say the latest spike can be blamed on the price of crude oil combined with the weak dollar.

"The main reason the price of crude oil, it's been at $109 per barrel. So to give you some perspective, when I started at AAA five years ago, it was news when crude oil was $40 per barrel," said Nicole Niemi, AAA Chicago.

AAA Chicago says despite the high gas prices, Americans are still planning summer vacations using their cars.

"But they're cutting back in other areas. They will pack peanut butter and jelly instead of driving through fast food," said Niemi.

With prices over $3 since the first of the year in the Chicago area, AAA has seen consumption down a bit. But the bottom line is many refuse to part ways with their cars.

It might even be in the constitution somewhere that Americans have the right to bear arms and own huge vehicles," motorist Jim Pomposelli said sarcastically. "Because we seem to be the only country in the world where we continue in large vehicles despite the prices of gas."

Some people said it costs between $80 and $100 to fill their tank

Will the prices go back down? That also depends on supply and demand and the price of crude oil. AAA says the real test for them is either the kickoff of the summer season, which will be Memorial Day.