It could soon be a little less expensive to run a taxi service in Pismo Beach, now that the city is considering cutting taxi fees by 25 percent to help drivers and services compete with their unregulated ride-hailing counterparts like Uber and Lyft.
Taxi drivers in Pismo Beach have said high startup costs and city fees make it difficult for traditional cab services to compete because Uber and Lyft don’t pay any city fees.
The City Council on Tuesday directed its staff to draft an ordinance reducing the fees by 25 percent and bring it back to the council at a later date.
“I think we have this situation where Uber and others come along and undercut the costs of other drivers, and they’re not regulated,” Mayor Ed Waage said. “Taxi cab drivers are regulated. I think this is the way to ensure that our residents that would prefer to have a licensed taxi cab, to know that the driver has undergone a background check, get some assurance that it will be a safe ride.”
I just think it is an important thing to keep this service for our residents here.
Marcia Guthrie, Pismo Beach City Council
The current taxi fees range between $112 for a vehicle inspection to $535 for a permit for a new taxi service, according to a city staff report. In the 2015-16 fiscal year, the city collected $1,069 in taxi-related fees; so far this fiscal year, the city has been paid $952.
One of the biggest concerns with lowering the fees is that they already don’t cover the entire cost to the city. The fees cover about half of the cost to the city of performing background checks and inspections, and the administrative costs of processing applications. (For example, a new taxi driver with an existing company would pay $264 for a permit and background check, while the staff time cost is $430.67.)
Under the new fee structure, the city would cover about 75 percent of the cost; the staff estimates this would cost the city an additional $601 per year.
“The greater good for the public really outweighs the subsidy,” Councilwoman Marcia Guthrie said. “I just think it is an important thing to keep this service for our residents here.”