How Much More Do Taxi Fares Cost Today?

It’s a done deal: taxicabs in New York City will become more expensive, as last Thursday the Taxi and Limousine Commission voted to increase fares by what they calculate as 17%. The changes take effect in September, when we will see if anyone actually notices.

This may be a matter of parochial interest, as, contrary to the beliefs of most New Yorkers, not everyone lives in New York City. And no matter what impression a visit to Times Square will leave you with, some non-New Yorkers don’t even visit NYC. But taxis are about the most New York-y thing of all, immortalized in television and film, and they are—like books, both bestsellers and comics—yet another thing that is getting more expensive.

Have taxi fares increased in an orderly fashion, or are taxicabs creeping into luxury territory? Let’s talk taxis.


In the weeks leading up to the TLC vote, over the period in which public hearings were held on the topic, the average New Yorker’s reaction was a half-raised eyebrow and then a shrug—it’s impossible not to be disquieted by each institutional rate increase that comes down the pike, just as it’s impossible not to be resigned to it. But the constituency that was very interested was the taxi industry itself. The taxi drivers, as represented by the New York Taxi Worker Alliance, very much wanted the raise in fare. As they stressed in their press release announcing the proposed hike: “All drivers are earning 25% less today compared to 2006, more than half have no health insurance, and no driver has Disability Insurance. When drivers are left jobless due to injury or sickness, our families have nothing to fall back on.” Driving a taxi is apparently not an especially lucrative endeavor. As the NYT’s Michael Powell (himself a one-time taxi driver) tells of one driver who works for Powell’s former fleet, “He drove 12 hours and earned $85. The taxi union folded years ago. He has no health insurance, no paid days off.”

Naturally, as the drivers supported the hike, the owners of the taxicabs of New York City, the employers of the taxi drivers (kinda, but not really… more on that in a bit) did not. The fare increase was specifically designed to benefit drivers, and it included protections from certain increases in the fees that the owners could charge. The fare increase was, in fact, yet another salvo between the factions of the drivers and the owners (“garages and brokers,” as they’re called). The hostilities are historic, so let’s look at history for a second: It boils down to medallions.

Taxis (as we know them—travel-by-hire is an old phenomenon, probably only a little bit less old than travel) were introduced to the city in 1907 by Harry N. Allen, who imported 65 French automobiles, with mechanical meters, to compete with the horse-drawn hansom trade, and who coined the term taxicab from the French term for the meter, taxi-mètre. Allen left the business soon after, but taxicabs proliferated for the first half of the century, largely through family-controlled fleets (Yellow Cab, Checker Cab). The first attempt at oversight of the industry came in 1925, when the NYC Police Department was given the job, and the first attempt to limit the number of taxes followed in 1937, when the city froze the number of taxi licenses at the then-current number, 13,595. These licenses came in the form of the medallion—the metal badges affixed to the hood of every NYC yellow cab—and served as the permit for the vehicle to operate as a taxicab in the five boroughs. That limit on medallions has never been increased, and the imposed scarcity has made the medallions a commodity. The price to obtain one now is in excess of a million dollars.

For the first 60 years of the industry, driving a cab was pretty straight-forward. Either the driver was the owner of the medallion, or the driver worked for the fleet and split fares with the fleet at the end of the shift. But the TLC, taking over for the NYPD Hack Bureau in 1971, changed regulations in 1979 in such a way as to allow owners of medallions to lease them to drivers. Lessee drivers, instead of splitting fares with the medallion owner, makes a fixed “lease” payment for use of the medallion and then (in theory) is responsible for the expenses of the shift, such as fuel, but then keeps the fares from the shift. But of course there might also be a lease of the vehicle, and there are other factors that owners nickel and dime in to the lessee driver, such as maintenance and “expenses.” Through the leasing system, garages and brokers devised a way to take the risk associated with a shift, the chance that it would not generate a lot of fares (a shared risk if the fares are being shared), and shifted it exclusively on the back of the lessee driver. Hence, the driver was no longer an employee but an “independent contractor.” And it got more complicated still once “agents” entered the market, who act as a middleman between the medallion owner and the driver. Not to mention the advent of so-called car services, which are non-hail (for now?) liveries that compete with taxis. Suffice it to say that the taxi industry is as American as any when it comes to the division between labor and management, and even more American in the sense that management generally wins.

So the controversy over the proposed fare hike was the exclusive province of those directly involved in the industry, although this was not a controversy with any real decibels behind it. One could surmise that New Yorkers would take to the streets over yet another increase in something, but (a) perhaps New Yorkers evinced some quiet sympathy for the plight of the drivers and (b) it’s been really hot out and outrage is just so enervating.


(An invaluable resource for poking around the topic of taxicabs in New York is the
Schaller Report, by Schaller Consulting [pdf]. It is an exhaustive and obsessive survey of everything there is to know about the NYC taxi industry, filled with charts and historical analysis. Sadly, the most recent edition is from 2006, because Bruce Schaller, the Schaller of Schaller Consulting, was appointed as the first Deputy Commissioner for Planning and Sustainability for the NYC Department of Transportation in 2007, at which point Schaller Consulting ceased operations. But even if outdated, the Schaller Report is truly a Bill James Baseball Abstract for taxi nerds.)


But it’s still an increase and one that will hit certain pocketbooks. Which ones? Well, taxis are not exactly a daily experience for everyone in New York, though at the same time if you’re above the poverty line (and count your blessings) it’s tough to go for a period of time without taking one in the big city. So let’s find out what kind of damage we’re talking about, and see how it falls in line with history.

Taxi fares are a little complicated, as they are metered for both time and distance, i.e., if the cab is traveling faster than 12 mph, it measures the distance of the trip, and if it’s going slower than that (or not moving), it measures the duration of the trip. And on top of that, there is an initial fee for the passenger to step foot in the cab, which they call the “drop,” which also is applied to the first increment of distance. On top of that, starting in the 1980s, surcharges began to be added for trips that happen at night or during the evening rush. And trips to certain airports? They’re a flat fee now. So comparing prices over time is not as easy as reading a price tag and adjusting for inflation. But for the record, below are the historical, non-adjusted taxi fares of New York City.

Year                             Drop                           Mileage                             Wait Time

1948                 $0.20 first 1/4 mi.                 $0.05 per 1/4 mi.                 $0.05 per 2 min.
1952                 $0.25 first 1/5 mi.                 $0.05 per 1/5 mi.                 $0.05 per 90 sec.
1964                 $0.35 first 1/5 mi.                 $0.05 per 1/5 mi.                 $0.05 per 90 sec.
1968                 $0.45 first 1/6 mi.                 $0.10 per 1/3 mi.                 $0.10 per 2 min.
1971                 $0.60 first 1/5 mi.                 $0.10 per 1/5 mi.                 $0.10 per 72 sec.
1974                 $0.65 first 1/6 mi.                 $0.10 per 1/6 mi.                 $0.10 per 1 min.
1977                 $0.75 first 1/7 mi.                 $0.10 per 1/7 mi.                 $0.10 per 1 min.
1979                 $0.90 first 1/7 mi.                 $0.10 per 1/7 mi.                 $0.10 per 1 min.
1980                 $1.00 first 1/9 mi.                 $0.10 per 1/9 mi.                 $0.10 per 45 sec.
1984                 $1.10 first 1/9 mi.                 $0.10 per 1/9 mi.                 $0.10 per 45 sec.
1987                 $1.15 first 1/8 mi.                 $0.15 per 1/8 mi.                 $0.15 per 1 min.
1990                 $1.50 first 1/5 mi.                 $0.25 per 1/5 mi.                 $0.25 per 75 sec.
1996                 $2.00 first 1/5 mi.                 $0.30 per 1/5 mi.                 $0.30 per 90 sec.
2004                 $2.50 first 1/5 mi.                 $0.40 per 1/5 mi.                 $0.40 per 2 min.
2006                 $2.50 first 1/5 mi.                 $0.40 per 1/5 mi.                 $0.40 per 1 min.
2012                 $2.50 first 1/5 mi.                 $0.50 per 1/5 mi.                 $0.50 per 1 min.

That’s a lot of fractions, and hard ones, like a seventh.

The TLC, in announcing the hike, put a fixed value on it: 17%. They arrived at this by figuring out what the cost of the average trip in now and then guessing what the average trip will be post-increase. But we would like to be a little more concrete about this, so we calculated the fare that would presumably be charged for a hypothetical taxi trip. Say you are a tourist (surely you are, somewhere.) You arrive via Amtrak because you are terrified of flying (surely you are, sometimes). It’s 5:30p.m., which means that there’s just enough time to visit the number-one tourist destination of NYC, Ground Zero, real quick before you trundle yourself off to Bubba Gump’s for a light shrimp repast. Taxi!

As the cab drives, first up to 34th Street with Macy’s dead ahead, then a quick right down Seventh Avenue which becomes Varick which dumps out onto West Broadway and then stops right where Vesey Street used to be (T-shirt central!), it is three and four-tenths of a mile. And remember it’s rush hour, so let’s say that there are four minutes and thirty seconds of waiting time. Now obviously it wasn’t Ground Zero before 2001, not to mention that it wasn’t even the World Trade Center before 1973, but we skip lightly over such inconsistencies of history. Below is the fare for each applicable year.

1948: $0.90
1952: $1.20
1964: $1.30
1968: $1.55
1971: $2.50
1974: $2.95
1977: $3.35
1979: $3.50
1980: $4.50
1984: $4.60
1987: $5.65
1990: $6.25
1996: $7.70
2004: $9.70
2006: $11.50
2012: $13.60

And now, thanks to our friends at the Bureau of Labor Statistics, below is the fare for each year, expressed in 2012 dollars:

1948: $8.58
1952: $10.41
1964: $9.64
1968: $10.24
1971: $14.19
1974: $13.75
1977: $12.70
1979: $11.08
1980: $12.55
1984: $10.17
1987: $11.43
1990: $11.58
1996: $11.28
2004: $13.02
2006: $13.11
2012: $13.60

Where does that leave us? There’s an interesting little bump in cost from the recession of the early 70s, and clearly the TLC decided that it needed to look busy during the Carter Administration (and the energy crisis that swallowed up said administration), nudging the fare up a bit nearly yearly.

Also, the expense seems to have plateaued at near-historical highs in the past ten years (maybe due to the one dollar surcharge for using a cab between 4 and 8 p.m. instituted in 2004, and a fifty cent per trip New York State tax surcharge passed in 2010). It doesn’t look like an enormous deviation over time, because the difference between eight bucks and thirteen bucks is about the same as that of the difference between a mid-level cocktail/burger and a high-end cocktail/burger, which, as we all know, taste about the same. However, remember the little math we were taught, from then to now it’s an increase of more than fifty percent, and an increase in actual, adjusted cost. And this leads us to say that, yes, taxicabs in NTC are decidedly more expensive than they used to be.

Maybe it’s not such a bad thing. Included in the regulations passed by the TLC last week are a provision that the lease-cap, the limit on the medallion lease garages and agents charge lessee drivers, can not be raised to correspond with the fare raise, so the raise is actually going to the drivers, and there’s another provision establishing a modest health and disability fund for the drivers, paid for by garages and agents. So maybe it costs a couple bucks more to get from the Met to Turtle Bay. At least after six years there’s a leg up for the hacks of New York (by which we mean taxi drivers and not, well, that other kind of hack).

Previously: Martinis and Steak Dinners

Brent Cox is all over the Internet. Photo by Atif-US photography.