Weeks after Uber and Lyft added a fuel surcharge on trips to offset rising gas costs, Toronto is considering doing the same for taxis.
For drivers like Thomas Spanidis, who’s worked for Co-op Cabs for 33 years, the proposal has been a long time coming.
“We haven’t seen an increase in our pay for the past 12 years,” Spanidis said.
On Friday, the city’s government and licensing committee will consider temporarily charging cab passengers an additional $1 per trip, bringing the drop rate — the flat fee charged to taxi riders regardless of the length of their trip — from $3.25 to $4.25. If approved, the proposal will go to council on May 11, where if passed, the surcharge would take immediate effect.
In March, Uber and Lyft added temporary fuel surcharges of $0.50 and $0.55 per trip, respectively. (For Uber Eats, the rate is $0.35 per delivery.)
Higher gas costs mean more expenses for taxi drivers at a time when they’re trying to recover from reduced demand during the pandemic. For Spanidis, it means paying $100 to fill up his hybrid Toyota Camry instead of his usual $60, which he does up to three times per week.
The proposed increase is welcomed by drivers like Spanidis and their cab companies.
In a statement, Co-op Cabs said the company supports the proposed $1 surcharge.
“With the increased gas prices it will certainly help our drivers,” said CEO Abdul Mohamoud, adding a larger review of taxi fares is also needed in light of inflation and other rising costs.
Kristine Hubbard, operations manager at Beck Taxi has advocated for the drop rate to be increased. In 2015, the city reduced the rate by $1 to help cabs compete with Uber. The last time cab fares increased was in 2010 to add HST, according to a city report.
“We needed to see this yesterday,” Hubbard said, noting even the proposed increase is not enough.
The city is doing a larger review of the vehicle-for-hire bylaw, which includes a review of cab fares. The first phase is expected to be complete in early 2023. The proposed surcharge would be in place until that review is complete, or when council revokes it, according to the city.
The city’s report mentions that similar surcharges were recently introduced in Washington, and other places in Ontario are also reviewing rates amid high gas costs. The $1 surcharge would bring Toronto’s rates in line with those in Mississauga, Brampton and Markham, where the drop fare is already $4.25.
But some drivers are afraid a rate hike will mean losing business. Hubbard said one driver told her he’s so afraid of backlash if the change is announced that he’s willing to forgo the increase.
“It could scare away your customers,” Spanidis agreed. “But at the same time, where are we going to get the extra income so we can cover ourselves with the fuel price?”
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