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Vegas cabs overcharging public by $47 million a year, audit finds

  • STAR-ADVERTISER / 2004

    Las Vegas-area cabs are overcharging customers to the tune of $47 million a year, according to an audit released Tuesday of the Nevada Taxicab Authority.

CARSON CITY, Nev. » If the cash you doled out for a Las Vegas cab ride hurt your wallet, it’s not all in your head — auditors in Nevada also think taxi rates are outrageous.

Las Vegas-area cabs are overcharging customers to the tune of $47 million a year, according to an audit released Tuesday of the Nevada Taxicab Authority, which regulates the rides in Clark County.

Auditors for the governor’s finance office blamed a $3 credit card processing fee that they say is much higher than in other cities and probably shouldn’t exist. They also criticized a decision to increase a fuel surcharge even as gas prices are tanking and said having the surcharge at all is unique among the 12 major Western cities that the taxi board tracks.

“The board’s decision is a windfall for the industry, which is able to pass additional operational costs on to the public,” the audit says. “These are mostly tourist/visitor dollars that would otherwise likely be spent elsewhere in the local economy.”

The criticism comes a few months after ride-hailing companies Uber and Lyft started operating in Nevada with promises of cheaper and more convenient rides. The taxi industry, which makes big bucks taking tourists on a 5-mile trip from the airport to the Strip, fought hard against allowing the companies before losing its battle in the Legislature last spring.

Representatives of a union representing many area taxi drivers said they have long fought to end the credit card fees, arguing they enrich the cab company but hurt drivers. For example, some passengers mistakenly believe it is a tip for the driver and skip the gratuity.

“It is absolutely, utterly ridiculous to have a credit card fee of $3. That’s absurd,” said Sam Moffitt, a union organizer representing drivers of the large taxi company Yellow-Checker-Star. “The drivers do not get any portion of that money.”

Gene Auffert, CEO of Yellow-Checker-Star, declined to comment. Kimberly Maxson-Rushton, director of a Las Vegas-area taxi company association, didn’t immediately return a call seeking comment.

Uber spokeswoman Taylor Patterson declined to comment on the audit, except to say her company will continue to offer affordable rides to Nevadans.

Auditors say a cab fuel surcharge that regulators approved last summer is based on a federal gas-price average that’s higher than Las Vegas rates. They say the fee structure, which the taxi industry supports, is designed so customers pay a full 12 cents more per mile once gas hits $3.25 a gallon, instead of kicking in gradually depending on how high gas prices rise.

The audit panned the $3 credit card transaction fee, saying it far exceeds the cost of cab companies accepting cards. State agencies pay 8.5 cents to Wells Fargo per credit card transaction, auditors said, and taxicab regulatory agencies in other cities allow fees between 3.8 percent and 5 percent of the total fare.

The $3 fee accounts for about 17 percent of the total average cab fare in Clark County and should be immediately reduced to 90 cents at most or halted altogether, auditors said.

“The credit card fee structure provides multiple opportunities for the industry to maximize revenue at the expense of the public and local economy,” auditors said, noting that many large cities don’t charge extra for credit card processing.

Auditors were so critical of the Nevada Taxicab Authority that they recommended abolishing it and turning over its duties to the county or the state Transportation Authority, which oversees cabs in other parts of Nevada.

Ron Grogan, chief of the authority, said the taxi board would have to discuss the recommendations before making changes. But he acknowledged that his agency had probably outlasted its usefulness.

The state Department of Business and Industry “recognizes that for many years the Taxicab Authority has been unable to institute the best practices of the industry due to a complex regulatory structure and add-on laws,” he said. “Regulatory laws must be modernized.”

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    • Took the words right out of my mouth. Uber, Lyft, and Speedy Shuttle are the best. Want to do more? Allow colorful Filipino jeepneys, tricycles, and Thai motorscooter taxis for short trips. So economical and faster. Might even cut down on car ownership, parking fees, and traffic.

  • ?No problem, in the past drove most of the time from S Cal and stayed at California Club that offer free parking for guests. Do not gamble and so visit for class reunions only. Can count on one hand the times visited Vegas. Once was a business trip.

  • Fck Vegas. Everybody is so rude and rip offs. Got tired of the same old shows, long lines, hunting for service, looong waiting before your dinner order is delivered, loooong time waiting for coffee refills, loooong time standing in line before they seat you, ignore you when you request another slice of too thin prime rib, rip off hotel add-on charges for things you don’t need and they say it is legal, rail train shuts down because it is too windy and no signs or explanations are given, buses too full, rude ripoff taxi drivers and wait help who demand a percentage tip, and so on. Becoming like Paris, Hong Kong, Taipei, and Red China. Go anywhere but Vegas.

    • My, my! Impressively you apparently have travelled world wide and your comments are not unlike some others whose expectations far exceed relative to what they pay for. I can’t speak for others, but I’m sure many like me, return to LV for various reasons or maybe for just a couple. True, there are some places that have long dinner lines. If that’s not your take, there are many other options with reservations, willing to take your cash. Resort fees, and tip guidelines on the meal checks are rip offs…but again, if that’s disagreeable with you, there are other places that will gladly accept your business. Having visited LV several times, your other complaints in my opinion, are somewhat exaggerated and disillusioned. As a prominent newscaster stated in a closing, “Knowledge is knowing a tomato is a fruit. Wisdom is knowing not to put it in a fruit salad”. Maybe others will understand how that applies to your comments.

    • On of the unwritten rules of travel is you left home for new experiences, to try different food, meet new people. Not every event will meet the standards you have set for yourself.

      Seems you always see the negative during your travels as not one mention of something you enjoyed. Might be better if you just stay home on the rocking chair and rock your life away.

      Meantime the rest of us will be out there enjoying everything this amazing world has to offer. A quote from the movie Ferris Bueller’s Day Off is fitting, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.”

  • This is all irrelevant. Casinos are losing massive tax revenues from declining spenders. The next generation of spenders (Millennials) don’t gamble and nobody wants to live in a parched desert climate that sorely lacks basic water infrastructure. Vegas in the next Detroit.

    • Thanks to Lyft, Uber, other ride sharing services the value of Jurassic Taxi Medallions are dropping like rocks. Some cab companies have declared bankruptcy thanks to their excessive overhead costs.

      However some taxi companies are fighting back with the same types of apps to offer their services, cutting costs. It can only get better for the consumer.

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