35% South Asian origin dominate Taxi business in New York will get a benefit of 26% fare hike

New York, APRIL 25, 2004

The New York City Taxi and Limousine Commission (TLC) has decided to increase fares by more than 26% in May, a move widely praised by drivers and industry groups. The changes include a base rate hike to $2.50 and a $1 rush-hour surcharge. Yet despite these immediate monetary gains, the ones most likely to benefit from the fare increase are not cab drivers but the city's 240 million yearly yellow-cab passengers.

The raise was the result of the struggle of New York 's 40,000 cab drivers for a decent living. There are some 35 per cent of cab drivers in New York are of South Asian origin from India, Pakistan and Bangladesh and dominate Taxi industry

Wages as low as $9 an hour and a lack of health insurance and other benefits only add to the stresses of congestion, traffic restrictions and potholes. Not surprisingly, a 1998 survey by Schaller Consulting found that 40% of driver applicants were out of the industry within two years.

Higher wages will attract a higher caliber of driver and discourage current cabbies from leaving the business. Studies have shown that more-experienced drivers provide better service and have fewer accidents.

Furthermore, in an environment where take-home pay is less dependent on snagging one or two more fares, drivers will be less inclined to behave recklessly. The $1 surcharge, along with the sale of 900 new medallions, will address the most frequent customer gripe: availability of taxis during peak hours. The TLC also has approved service enhancements, including installation of credit/debit card readers and GPS technology.

After adjusting for inflation, the average fare is at its lowest point since 1967. Moreover, New York, with its high cost of living, has the lowest fare among the 14 U.S. cities with more than 1,300 metered taxis. Even after the increase, New Yorkers will pay less than their counterparts in five other cities, including San Francisco and Boston.

New York taxi fares will still be cheaper than in most big US cities. New York has the 13th lowest taxicab fare among the 14 American cities with 1,300 or more cabs, the TLC said. Yet the increase is only the first step in improving industry quality. With it, the oft-maligned behavior of cab drivers also must change. Passengers should expect greater accountability, safety and customer service.

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