If ratified by city council, the price of taking a taxi in Greater Sudbury is about to increase by 11 per cent, making cabs in the city the priciest of any major city in northeastern Ontario.
However, this is the first time in six years local rates have increased, and that increase — back in 2008 — was 12 per cent.
Guido Mazza, the city's director of building services, told members of the operations committee Monday the city has changed the formula it uses to determine rate increases. The old method was too reliant on fuel costs in calculating rates, and increases only kicked in when prices jumped by 20 per cent.
The new cost index includes cost of fuel as well as other fees such maintenance and insurance, and rates will be reviewed annually. Staff met with representatives of the taxi industry in late July, Mazza said, and they support the changes.
“In this particular case … there has not been an increase to their rates in eight years,” he said. “Now we have a new benchmark.”
Ward 3 Coun. Claude Berthiaume wondered whether the market could bear such a big increase costs.
“They're not afraid of losing business?” Berthiaume said. “This is a huge increase.”
Mazza said that was the purpose of meeting with them, to ensure the changes reflected the realities of the industry.
While a big hike, Ward 2 Coun. Jacques Barbeau said taxi companies will be able to be financially viable with the new rate formula.
“Operators will be enthralled with a formula like this,” he said.
The increase comes after the city passed a new taxi bylaw in the spring that reformed the citywide system for the first time since amalgamation. Changes included eliminating zones in the city, allowing drivers to pick up and drop off passengers anywhere in the city, except the airport.
Sudbury Airport issued a tender last year giving one company the right to the lucrative work at the facility. That prompted a reform of the entire system, which dated back to 2003, shortly after amalgamation. The rules were meant to ensure smaller communities had taxi service, but were complicated and made it harder for firms to survive once the airport contract was awarded.
The new bylaw eliminated zones, while capping the number of taxi licences in Greater Sudbury at 131, to try and ensure cab companies can make a profit. A separate class of licenses would be created for the Sudbury Airport only, in case future expansion there creates the need for more cabs.
The new taxi bylaw also limits number of cabs be limited to a formula of about one taxi for every 1,200 citizens. The age limit for all taxis is set at 10 years, and all cab company owners must now carry $2 million in liability insurance.
The city bylaw passed in 2003 split the city into two zones — the former City of Sudbury in Zone 1, and the rest of the city in Zone 2. Zone 1 drivers could only pick up passengers in the old city, but could drop them off anywhere. They could pick up passengers inside Zone 2 only if they were taking them to an address in Zone 1.
Drivers in Zone 2 could only pick up passengers outside of Sudbury, but could take them anywhere. Until the exclusive airport contract was awarded, holders of Zone 2A licences were allowed to serve the airport. So last summer, the city agreed to convert Zone 2A licences to Zone 1, to give taxis spurned by the airport a source of income while a new bylaw was prepared. That decision concerned companies already operating in Zone 1, who viewed the Zone 2A drivers as unwelcome competition.