Toronto stumped on how to fix high taxi rates

The mantra of respect for taxpayers that dominated the recent mayoralty campaign does not appear to include a similar focus on the pocketbooks of taxi passengers in Toronto.

Taxi rates are among the highest in the country after another price increase earlier this year with the imposition of the HST on cab fares. The city ranked 20th highest in the world - more expensive than such cities as New York, Paris and Los Angeles, in a recent survey conducted by the website priceoftravel.com. A five-kilometre fare, without additional costs tacked on as a result of waiting time in heavy traffic, costs nearly $13 in Toronto.

In the recent municipal election campaign, taxi fares did not feature in discussions about transportation issues. As well, the annual review of cab rates by city staff, scheduled for this fall, has been put on hold until early 2011 as a result of the municipal election.

The taxi industry, city councillors and city staff all agree fares are high, yet there is little consensus on what to do to lower the price, or whether that is even possible.

"It is very expensive to take a cab. It is also very expensive to operate a cab," said Howard Moscoe, the outgoing city councillor and chair of the municipal Licensing and Standards committee, which oversees the industry. A nearly 20-per-cent hike in rates approved by city council in 2008, was pegged to a spike in gas prices that were $1.30 a litre at the time. Gasoline is now around $1.05 a litre, yet Mr. Moscoe does not think that this should lead to a drop in rates.

"Consumers have never appeared before our committee. We haven't received any complaints," said Mr. Moscoe, who noted that the 2008 hike was the first increase in three years. "The real problem is we have too many cabs on the road," he said.

Flagging a cab is rarely a problem in the downtown core, since Toronto has more than twice as many licensed taxis per capita as other cities, such as Vancouver. The added convenience for riders, though, is another strain on an industry already facing several obstacles, said Mohammad Reza Hosseinioun, a taxi driver and director of the Itaxiworkers Association. "We get company business. But there is a lot less flagging from the street," said Mr. Hosseinioun, which he suggested was a result of the large number of licensed taxis along with the cost of a fare.

Taxi drivers with Ambassador plates, which cannot be leased out as with standard plates, have long complained about what they say is a two-tiered system that impedes their attempts to make a good living. The industry as a whole also points to unique costs to operating a cab in Toronto.

A report prepared by city staff last year noted that insurance fees are between $4,000 and $7,000 annually per taxi, significantly higher than anywhere else in the province.

Municipal licensing fees, which are $300 annually for a driver and about $1,000 per taxi plate, "are higher than anywhere else in North America," noted Jim Bell, chief executive of Diamond Taxi and president of the Toronto Taxicab Alliance. The imposition of the HST this year "has turned drivers into tax collectors," and driven away customers, he said.

The taxi industry is "part of the public transit system," said Mr. Hosseinioun, and as a result, should receive tax relief on fuel costs. "This would bring the price of the meter down," he said.

Councillor Denzil Minnan-Wong, a long-time member of the Municipal Licensing and Standards committee and possibly its next chair, agreed that council should examine taxi rates, but he is not promising any drop in the price. "I would like to see taxi fares reduced. But you have to give drivers a fair wage," he said.

Special to The Globe and Mail

TAXI RATES

All figures in Canadian dollars. Based on daytime fare, with two passengers in taxi and little to no waiting in traffic.