Ann Arbor Sets Stage for Taxicab Rate Hike

Even though the Ann Arbor city council rejected one proposed change to its taxicab ordinance at its Aug. 18, 2014 meeting – which would have regulated all drivers for hire in the city – initial approval was given at that meeting to another change in the part of the ordinance that regulates rates. And the council gave final approval of that ordinance change at its Sept 2, 2014 meeting.

The change establishes certain parameters to mitigate possible negative consequences to the setting of a very high maximum allowable taxicab rate, under which taxicab companies might eventually compete. Those parameters include a requirement that a taxicab company commit to a single rate annually and that the rate be advertised in a vehicle with signage in letters one-inch tall. New, higher rates have not yet been approved by the council.

The vote by the taxicab board to recommend the ordinance change came at its July 24, 2014 meeting.

These issues were also discussed at three monthly meetings of the taxicab board prior to that, on April 23, 2014, May 22, 2014 and June 26, 2014. Representatives of the taxicab industry at those meetings advocated for the establishment of a very high maximum – not tied to gas and insurance prices. They feel it’s one mechanism that would allow them to compete with ride-sharing services like Uber and Lyft.

The proposal to regulate all drivers for hire, which the council rejected, was also intended in part to allow taxicab companies to compete with Uber and Lyft on an even playing field. Taxicab drivers are already regulated by the city.

Regarding fare regulation, the city’s current structure already allows for the establishing of a maximum rate to be adopted by the city council. Currently the maximum rate in Ann Arbor is $3 to get in, $2.50 per mile, and 40 cents per minute waiting time. Those maximum rates were last adjusted upwards three years ago, on May 16, 2011, in response to gas prices that had nudged past $4 per gallon. At that time, the taxicab board indicated it did not anticipate considering another rate change until the gas prices were over $5 for at least two consecutive months.

So the taxicab board’s thinking is not being driven by gas prices, which are currently between $3.75 and $4 in the Ann Arbor area. Instead, a possible increase in allowable fares is based on concern that the taxicab industry in Ann Arbor might not be able to survive unless taxis are allowed to charge more.

At its Aug. 28, 2014 meeting, taxicab board members recommended the following maximum rate schedule for eventual consideration by the council, which could appear on the council’s agenda as soon as Sept. 15: $10 to get in, $5 per mile and 40 cents per minute waiting time. In addition, a $1 surcharge could be applied for each passenger over three passengers.

At the council’s Aug. 18 meeting, Stephen Kunselman (Ward 3) – who also serves as the city council’s representative to the taxicab board – asked rhetorically if the taxicab board should be disbanded. At its Aug. 28 meeting, taxicab board chair Michael Benson announced that he’d received an email from board member Eric Sturgis, who indicated that he would be resigning from the board – because he’s moving to Jackson, Mich. It has historically been difficult to find residents willing to serve on the taxicab board.

On Sept. 2, eight people – including Benson and LuAnne Bullington, another taxicab board member – spoke during a public hearing on the ordinance change.

Other Sept. 2 action related to the topic of hired rides was a vote by city council that directed the city administrator to negotiate operating agreements with transportation network companies like Uber and Lyft. The discussion on that item lasted about 45 minutes, resulting in approval on an 8-3 vote, over dissent from Kunselman, Sumi Kailasapathy (Ward 1) and Mike Anglin (Ward 5).

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.