why are taxi fare structures so complicated?

July 5, 2009 2:20 PM

Why are taxi fare structures so complicated?

I was in a taxi today and was reading the sheet that outlined fares... it was basically something like 'Fares start at 2.70 and continue at the rate of .20 for every 234 yards or 67 seconds until the fare reaches 3.72, at which point it continues at the rate of .20 for every 321 yards or 78 seconds until the fare reaches 11.20, and then it continues at the rate of .14 for every 452 yards or 92 seconds. Except on the weekends or on holidays or after 10 pm, when it is completely different'.

I am pulling numbers out of my ass as an example, but the fare structure was exactly as random and confusing as that. This seems to be pretty normal for taxis - but why? Why can't they just say (for example) 2.00 to start, then .20 for each 1/4 mile or 60 seconds up to 5.00, and then .20 for each 1/2 mile or 90 seconds? Is this purely to make it impossible for people to try to add up the fares in their heads so they won't argue about it? I figure it's not to make it easier for the cabbies to cheat the passengers, since these are strictly regulated city taxis and not private hire cars... so what's the deal?

posted by cilantro to travel & transportation (10 comments total)

This is a question that totally depends on where you are.

For example, I could say that you've completely misunderstood, and the taxi rates are based on zones and actually very easy to understand. But, that would only be true in my area.
posted by Houstonian at 2:40 PM on July 5

Why can't they just say (for example) 2.00 to start, then .20 for each 1/4 mile or 60 seconds up to 5.00, and then .20 for each 1/2 mile or 90 seconds?

I have seen many examples of this, but in one case I researched what happened historically. Originally things were set in nice round numbers, but there was a periodic increase in the fare to account for inflation. Rather than increase all the prices 3 percent (making each quarter mile now 20.6 cents), it is easier to decrease the distance that you get for your 20 cents. That way prices are still in nice round numbers, and you can be more precise without having to use fractional cents.
posted by grouse at 2:42 PM on July 5 [1 favorite has favorites]

Sorry, I should have said, I'm in Leeds, UK, and there is no 'zone' structure here that I know of. Purely based on a combination of time and distance.
posted by cilantro at 2:48 PM on July 5

It's worth noting that in Vancouver, Canada, you pay a flat starting fee (around $2.50, or so), and then it's a fixed rate per distance/time. None of this mucking about with changing rates.
posted by vernondalhart at 3:00 PM on July 5

Confusing indeed!

Perhaps someone in city council has a friend who makes meters that judge by the yard and time of day. Just craft a law with very specific requirements and there's only one company who can meet the contract. That's just some wild speculation though.
posted by cmfletcher at 3:03 PM on July 5 [2 favorites has favorites]

Even here in the UK it varies from town to town. Down here in Cambridge the fares were (until recently) a distance based equation inside the city, but if you wanted to travel to one of the villages just outside the city, it was a fixed fee. Annoyingly, if you wanted a taxi from one village to the next one 2 miles away (think old person getting to doctors') then it was classed as one trip from village to town, then another back from town to village. And then the same for the return. Now, the charge from town to my village was £16 (about $25 for the Americans). A return taxi fair to the village 2 miles over worked out as £64 ($100).

The cynic in me has to conclude they're designed to stop you comparing prices to other modes of transport...
posted by twine42 at 3:17 PM on July 5

The rate system is set up so that (a) the driver gets paid a reasonable amount if people use the taxi for a laughably short ride (b) the cost of the ride is proportionate to the distance traveled (c) if you go a longer way (for which the driver has to return further to his normal beat), you pay for this (d) if you want to use a taxi at peak hours or weird hours, you pay for this. Now, as for the actual values attached to each of these, I think grouse has the right answer.

As for how the system developed, think of yourself as a driver, trying to make a living, and certain passengers want you to do things which quickly become annoying/distracting/unprofitable/etc, so you figure out a way to make those situations either undesirable (flat starting rate for short rides, e.g.) or to charge adequately for them if somebody still wants to do those things.
posted by beerbajay at 3:47 PM on July 5 [1 favorite has favorites]

In the US, specifically in suburban towns outside of New York, taxi commissions have a very hard time keeping the balance between allowing drivers to make a living and keeping them from bilking riders.

The problem is that most taxi drivers are not the same as taxi owners. In some cases the driver is renting the car from the owner and paying fees to both the owner and the service. Sometimes the driver is also required to pay for insurance, gas and repairs -- this can mean a driver barely breaks even on tips.

I reported a story several years ago in a suburb of New York. In that particular situation, the village had not raised taxi fares in something like seven years. The drivers unionized against both the taxi companies and the taxi commission, and they went on strike twice. Most of the drivers were immigrants who had multiple jobs and were barely able to support themselves.

In that town, the taxi commission was fairly strict: drivers would be fined for honking, or for trying to charge little old ladies some insane extra amount for having groceries.

Then again, there are taxi owners who profit quite a bit from this situation, and taxi companies that are making off like bandits. In another New York suburb, the taxi commission can't even get the drivers to not take multiple fares -- whether the passenger in the cab wants to be the fourth stop of four or not.

So what you have to figure out is this: are you in a place where the taxi commission is strict, where drivers are mostly car owners, etc.? Then you'll be able to figure out whether the taxi fare is likely to be fair to both you and the driver.
posted by brina at 5:49 PM on July 5

Often the surcharges for nights and holidays are meant as an incentive to the taxi drivers to work during that period.
posted by smackfu at 6:57 PM on July 5

As I understand it, there are a large number of parties involved in the fare setting process:

• You may have the medallion holders, who own a (usually very expensive) license to make available a taxicab within a particular municipality; this allows the government to control the number of cabs allowed on the road--by supply and demand, this will alter rates.
• Then, you have the cab owners themselves, who actually own the vehicles.
• Next come the taxicab services, who run the garages, dispatch systems, etc...
• The drivers, who actually pick you up and take you somewhere, obviously have a vested interest in the fare structure.
• In some/many cases, one or more of the above are really the same person or entity. Also, these groups can have different financial arrangements between them (e.g. the service may or may not own the taxicabs and the drivers might be employees, independent contractors, or owners of the service).
• Furthermore, you have all the usual civic pressures involved in such a process: taxicab commissioners, city officials (elected and appointed), transit advocates, disability rights advocates (who want more accessible cabs on the road, which of course have a higher cost), environmentalists (who want hybrid vehicles used for taxicabs), consumer groups (who want lower fares and better enforcement of regulations), Chamber of Commerce folks (often arguing for less regulation/more free market), and of course, a few random mentally ill persons who drop by the public meetings for a good ol' time.
• Finally, there's an array of macroeconomic actors, such as inflation, employment rates, fuel prices, and the like.

So, the question is, what happens when you put all these folks in a room and ask them to come up with a taxi fare structure? As usual, the inside of the sausage factory isn't pretty. As any loyal viewer of Yes (Prime) Minister knows, governments have a peculiar way of acting sometimes. Since all these parties are unlikely to agree on anything, one simply creates a fare structure so complicated so as to defy any rational debate. Eventually, everyone gets tired of bickering, another ridiculous compromise (like a late-night rate structure bearing no relation to the daytime one) is adopted, and everyone goes on their way until next time.

brina: You are so right about suburban New York taxis. Farther upstate, in Ithaca, the taxi company constantly takes multiple fares without so much as asking, despite it being specifically illegal, making every trip an adventure throughout town. They, of course, charge each passenger the full rate too. A few years back, the main taxi company in town threatened to unilaterally increase fares illegally until the city caved and gave them what they wanted.

In short, I think the answer to this question is pretty much the same as another age-old one: why are electoral districts so funny looking?
posted by zachlipton at 1:46 AM on July 6