The recent increase in Ontario's minimum wage has hit local taxi companies hard, says a staff report up for debate next week.
The report recommends allowing companies to hike their rates by five per cent in the city, which would make a cab ride in Greater Sudbury among the most expensive in Northern Ontario.
On March 20, members of the finance and administration committee will vote whether to approve the increase, which would take effect April 10.
“With an increase from $11.60/hr to $14.00/hr, taxi owners state that this increase will be detrimental to their continued operation if similar increases are not added to the municipally regulated taxi fares,” the report says.
Currently, taxi drivers are paid by commission, the report said, with the taxi companies making up the difference if a driver doesn't make enough during a shift to bring them up to minimum wage.
The city unified the taxi bylaw in 2014, after operating under the former rules set by each municipality before amalgamation in 2001. Under the bylaw, companies can't increase their prices without approval from city council.
Currently, it costs passengers $3.75 as soon as they get in a cab in Sudbury – a fee called the 'drop rate' — and are charged 25 cents per 100 metres, $2.50 a kilometre, or $40 an hour for waiting.
In Thunder Bay – where rates have already increased because of the new minimum wage — the drop rate is $4.78, passengers are charged 12 cents for each 1/16 of a kilometre, $1.92 per kilometre and $33 an hour wait time.
While already more expensive than most communities, Sudbury taxi companies told the city during a February meeting they face higher costs because the city is so large geographically, but sparsely populated.
“Taxi owners further raised concerns with costs they faced for operation when considering the geography of the city and distances required to travel to pick up passengers,” the report said. “Referring to costs of 'dead mileage,' it was noted that owners faced higher costs in order to remain compliant with bylaw requirements that taxi service be provided at any time of day, at any place within the City of Greater Sudbury.”
They estimate that 50 to 60 per cent of their revenue goes toward paying salaries and WSIB premiums.
As a result, the report recommends increasing the drop rate in Sudbury to $4, charge riders 25 cents for each 95 metres, or $2.63 per kilometre. It may not be the last increase either, the report warns.
“In the event of another increase to minimum wage in 2019, staff recommend a proactive review in the late fall of 2018 to determine whether any increase to fare rates would be recommended,” the report says. “This forecast will be brought before council in January 2019 to ensure prompt response if there is an increase.”
