HomeMy WebLinkAboutCAO 14-10
eiN oo Report To
Executive Committee
CKERIN Report Number: CA0.14-10
Date: June 14, 2010
From: Debbie Shields
City Clerk
Subject: Requested Taxicab Fare Increase to Offset Harmonized Sales Tax
Recommendation:
That the request by the Taxicab Industry to increase taxicab fares to offset the impact of
the Harmonized Sales Tax be denied.
Executive Summary: Effective July 1, 2010, the government of Ontario will be
implementing the Harmonized Sales Tax (HST). At present, the taxicab industry is
required to remit the Goods and Services Tax (GST), amounting to 5% of the fares they
collect. Under the new harmonized tax system, the industry will be required to remit a
total of 13% of the fares they collect.
The Taxicab Advisory Committee was unable to provide a recommendation, as no
quorum was present for a meeting held on Friday May 21, 2010, to discuss the
committee's position on the HST. However, representatives from both of the major
brokerages, Durham Rapid Taxi and Blue Line Taxi were present and advised they
believe an 8% increase in taxicab fares is appropriate. Durham Rapid Taxi also
provided a petition signed by 39 drivers who also support an increase in Taxicab fares
to offset the impact of the HST.
Staff do not support an increase in taxicab fares, as the previous two fare increases
were justified based on fuel costs of $1.30 per litre on two separate occasions. After
both increases, fuel prices returned to around $1.00 per litre. Since 2005, taxicab fares
have increased by 47%, and staff feel that no further increases are justified at this time.
Financial Implications: No impact to City revenue.
Sustainability Implications: Not related.
i
Report CAO.14-10 June 14, 2010
Subject: Requested Taxicab Fare Increase to Offset HST Page 2
12
Background: Council approved taxicab fare increases on November 7, 2005 and
most recently on October 14, 2008. The justification for increasing the fares in 2005
was based upon an increase in operating costs such as fuel and insurance, while in
2008 fuel costs were the only consideration.
In 2005 the fares were increased from $8.95 for a 5 km trip to $11.75, an increase of
approximately 31%. In 2005 one of the most compelling factors for the increase was
the price of fuel, which at the time of the increase averaged $1.15 per litre, but had
peaked at $1.30 per litre in the summer of 2005, leading to the demand for the fare
increase.
In 2008 the fares were increased from $11.75 for a 5 km trip to $13.15, a further
increase of approximately 12% and a total increase over the 2005 fare rate of nearly
47%. In 2008 the only consideration for the increase was the price of fuel which at that
time was around $1.35 per litre.
Almost immediately after the fare increase, the price of fuel began to decrease and
eventually stabilized at or under $1.00 per litre. This means that the price of fuel has
dropped approximately 33% since the last fare increase in October 2008.
Calculating the difference between fuel costs at the time of the approved fare increases,
and the present fuel costs of approximately $1.00 per litre, the average driver has saved
between $2600.00 and $4000.00 in fuel costs in the past 12 months.
Fares from various municipalities across the GTA have been reviewed, including Ajax,
Whitby, Oshawa. and Clarington. It should be noted that Ajax recently adopted a 10%
increase in their taxicab fares to accommodate the HST costs and their fares will
exceed Pickering's at. $14.20 per 5 km trip. Whitby's fare for a 5 km.trip is at $13.50,
based on a fare increase implemented in July 2008. Copies of two taxicab fare surveys
are attached.to this report.
An exact increase of 8% to existing taxicab fares would be difficult to implement due to
the manner which taxicab meters calculate fares. An 8% increase would set the start
rate to $3.40, however, require an increase in the per kilometer rate to $0.20 per 1/11th
of a kilometer (an increase of 10% to accommodate the meter set up of specific
increments) and increase the 5 kilometer fare to $14.40.
Taxicab Industry Comments:
The Taxicab Brokerages and the Drivers who signed the attached petition believe it is
unfair to refuse to increase fares to cover a tax that must be collected. They believe the
industry cannot subsidize consumers, and no other sector is being required to do so.
The increase is only providing the ability to collect a tax imposed by the Province, it
should not be viewed as an increase to the meter rate.
CORP0227-07/01 revised
Report CAO 14-10 June 14, 2010
Subject: Requested Taxicab Fare Increase to Offset HST Page 3
13
The Taxicab Brokerages also stated that previous increases, while justified based on
fuel costs, encompassed other increased costs such as insurance.
The HST will impact drivers by adding the tax to their insurance, dispatch fees and fuel
costs. To require the HST portion of the taxicab fare to be absorbed by the drivers will
further increase the impact of the HST on their income.
Comments were also received cautioning that the increase will cause a further reduction
in business. In addition, the number of drivers who actually are in compliance with the
tax remittance requirements is a small percentage of the industry.
In summary, staff do not support an increase in taxicab fares at this time. While the
industry will experience an increase in the amount of taxes they must remit, they have
been more than compensated by the fares in place since 2008 that were increased to
cover fuel costs that did not remain at the level utilized to justify the increase.
Taxicab services are utilized largely by people on fixed incomes. The substantial
increases in fares over the past five years must be considered prior to approving further
fare increases. In addition, by many in the industry's own admission, very few drivers
actually comply with the requirements to submit the portion of the fares collected as
taxes. Staff re-iterate.the need for taxicab drivers to be required to submit proof of tax
remittance should any fare increase be implemented.
Attachments:
1. Petition from Taxicab Drivers
2. Taxicab Fare Survey - Durham Region
3. Taxicab Fare Survey - West GTA
Prepared By: Approved/Endorsed By:
U . ~O
ti grly Thom son, CMM I, CPSO Debbie Shields,
Manager, Municipal Law Enforcement Services City Clerk
Recommended for the consideration
of Pickering ' Counc'
Tony Prevedel, P.Eng.
Chief Administrative Officer
CORP0227-07/01 revised
1 4
DURHAM RAPID TAXI
16-979 Brock Rd.
Pickering, ON L1W 3A4
P: 905 831-2345
E: ravinderbhardwa0live.ca
Attention: City of Pickering By-Law Dept.
Mayor of Pickering
All Councilors of Pickering
To Whom It May Concern:
We, the taxi drivers of the City of Pickering request a meter increase effective
July 1, 2010. The new HST along with the dues, insurance and plate rents will
result in further undue hardship. We hereby request a similar meter rate to that
granted to the cities of Ajax and Whitby in 2010.
Cab Number Driver Name Cell Number
Z-572- 7 0
f
s - K4-=~'
Q z))<&-) i 6 -227 2
1S
DURHAM 'RAPID TAXI
16-979 Brock Rd.
Pickering, ON L1W 3A4
P: 905 831-2345
E: ravinderbhardwaj(o)live.ca
Attention: City of Pickering By-Law Dept.
Mayor of Pickering
All Councilors of Pickering
To Whom It May Concern:
We, the taxi drivers of the City of Pickering request a meter increase effective
July 1, 2010. The new HST along with the dues, insurance and plate rents will
result in further undue hardship. We hereby request a similar meter rate to that
granted to the cities of Ajax and Whitby in 2010
I
Cab Number Driver Name Cell Number
3j- 0 F G ~7e 9Q7~
i A910 VI NV-2 e-11 Ali 7
6~ 44 7 2 =iG~
t/1 ~q
IYADF-f-44 AWAP. 7 '6
l h ~u~ ti%,,jY\- A1) K~ 04t_qA3'6/4- ~i ~ `LS
6'0 -
16
DURHAM RAPID TAXI
16-979 Brock Rd.
Pickering, ON L1W 3A4
P: 905 831-2345
E: ravinderbhardwaj@live.ca
Attention: City of Pickering By-Law Dept.
Mayor of Pickering
All Councilors of Pickering
To Whom It May Concern:
We, the taxi drivers of the City of Pickering request a meter increase effective
July 1, 2010. The new HST along with the dues, insurance and plate rents will
result in further undue hardship. We hereby request a similar meter rate to that
granted to the cities of Ajax and Whitby in 2010
Cab Number Driver Name Cell Number
3- t~ R C r~e~ c1.j ~f i l1 U a :1S3
30~ kftl 7Y 7,?
~ 3 1 ~ c urL) Q Z4 O L 7,
-36
_p_ -zz 7~- -
' '35 c~ H 9oS- 703-7D
N/ C-714
03~1 SANSOev SAC~C"V' a - ag -29'f/
303
17
DURHAM RAPID TAXI
16-979 Brock Rd.
Pickering, ON L1W 3A4
P: 905 831-2345
E: ravinderbhardwaj live.ca
Attention: City of Pickering By-Law Dept.
Mayor of Pickering
All Councilors of Pickering
To Whom It May Concern:
We, the taxi drivers of the City of Pickering request a meter increase effective
July 1, 2010. The new HST along with the dues, insurance and plate rents will
result in further undue hardship. We hereby request a similar meter rate to that
granted to the cities of Ajax and Whitby in 2000
Cab Number Driver Name Cell Number
3 M9
2
3G
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