Unlike most industries, taxi companies can't increase what they charge customers without approval from the municipality.
Ward 9 Coun. Deb McIntosh said Tuesday that's why she asked for a report on allowing local cabbies to increase their rates to account for the recent 21 per cent increase in the minimum wage.
“If minimum wage impacts costs (for other businesses), they are able to increase rates to accommodate the new costs,” McIntosh said.
But taxis have to get approval for increase, since the city heavily regulates rates they can charge.
The report approved Tuesday by the finance committee allows companies to raise rates by five per cent, making a cab ride in Greater Sudbury among the most expensive in Northern Ontario.
Taxi drivers are paid by commission, 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.
“With an increase (in the minimum wage) from $11.60/hr to $14/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 staff report on the matter says.
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.
That causes something called 'dead mileage,' with companies facing higher costs for taking someone to an outlying community, then driving all the way back without a passenger, incurring gas and wages costs without any offsetting revenue.
With the increase approved Tuesday, the drop rate in Sudbury will rise to $4, riders will pay 25 cents for each 95 metres, or $2.63 per kilometre.
Ward 5 Coun. Bob Kirwan said there's a lot of concern in the outlying areas when it comes to getting a taxi. Not only is it tough to get one, but rides cost as much as $80.
Lately he's been seeing a lot of social media posts from people offering rides home. They don't advertise a fee, but he assumes there is one.
“I see a lot of that in the outlying areas, offering a ride home from the bar,” Kirwan said.
Bylaw manager Brendan Adair said the cab companies told him they can't keep up with demand for rides in the outlying areas, and that when they do provide service, dead mileage becomes a big issue.
As far as people offering rides on social media, Adair said it's a difficult issue to monitor since it's legal to offer free rides.
“If they are providing a ride without a fee, that's perfectly fine,” he said.
