R2001-91 AUTHORIZING EXECUTION OF AN AMENDMENT

Home Browse Search

Mass Transit Memorandum No. 050201-1 BACKGROUND: page 2 'I This proposed mileage rate increase(from $1.00 to $1.15 per mile)would cost the City about II $3,410 per year for Decatur Taxi. If the same rate increase were approved for Decatur Pride Checker Cab, that would cost the City an additional $8,935 per year. (This is based on the number of trips provided by each cab company this year.) The proposed mileage rate would represent an additional increase for each company of about 8.5%in total fares received under this contract. The proposed fare increase would raise Transit's operating costs by an additional $12,345 per year, if applied to both cab companies,which has been the past practice. 'This would not represent a significant increase in Transit's budget. However, any expenses over the amounts set in Transit's operating grants from IDOT and FTA must be paid out of Transit's revenues or out of the City's General Fund. In his letter requesting the rate increase, Mr. Carey stated that the reason for the increase is the sharp increase in the price of gasoline. He stated that his drivers must purchase their own gasoline, and that because of the high price of gasoline he is unable to retain drivers. He implies that the rate increase will be passed on to his drivers to offset the cost of gasoline. If the proposed fare increase is given only to Decatur Taxi and not to Decatur Pride Checker Cab, then the cost of the average ride charged by one company will be $0.40 (8.5%)higher than that charged by the other cab company. If Decatur Ta1ci could be forced to continue to provide service at the rate listed in their contract, then there would be no benefit to the City in granting a fare increase to Decatur Taxi. However, Decatur Taxi does have the option to terminate the contract by giving 90 days notice. If they were to terminate their contract, it should still be possible to provide service using only Decatur Pride Checker Cab and Transit's vans. (If both cab companies chose to terminate their contracts, Transit's van program would not be able to provide the needed service.) This was the situation for several months last year when Decatur Taxi chose not to renew their contract. The program continued to operate satisfactorily,but service was slightly poorer at times due to the extra load. Passengers had to wait longer for their rides, and some rides at peak times were not able to be provided. Also, shi$ing rides from Decatur Taxi to Transit's vans resulted in increased costs. The average cost of providing rides under Decatur Taxi's proposed rate would be about$5.10; the estimated cost of providing rides under the van program, including the costs of the drivers, maintenance and fuel, is nearly $15.00. Because the two taxi companies provide the needed service for the handicapped/disabled at a rate significantly lower than the Transit System can provide, it is in the best interest of the City to grant small rate increases periodically, when warranted. This helps to ensure that a high level of service is provided at a reasonable cost.