Taxi drivers to protest insurance rate hike

Will ask for major fare increase

Published on April 21, 2014
Passengers place their luggage aboard a City Wide cab Sunday night at the St. Johns International Airport. City Wide Taxi didnt renew an exclusive contract for cars at the airport. Photo by Joe Gibbons/The Telegram

Catching a cab may be harder than usual next week in St. John’s. Chances are hundreds of taxis will be parked in front city hall protesting insurance rate hikes.
“I wouldn’t be a bit surprised to see every taxi in the city out there,” said Doug McCarthy, general manager of Co-Op Taxi.

The taxi drivers are gearing up to protest the second 50 per cent insurance rate hike in a little more than a year.

Last year, the Facility Association, a non-profit organization that underwrites all taxi insurance in the province, increased its premiums by more than $1,200 each year per car.

Two weeks ago, taxi drivers learned that an additional increase of around $1,500 is set to take effect on Aug. 1.

These rate increases, combined with the mounting price of fuel and maintenance, are going to force people out of business, said McCarthy.

“A brand new driver won’t even be able to think about affording to put a taxi on the road.”

Taxi owners and operators are planning to argue their case before the Public Utility Board, which must approve the Facility Association’s proposed rates.

They’ll also ask the city to let them charge higher meter rates to help recover losses.

“We want a significant increase in meter rates to reflect the increasing cost of trying to operate a taxi service within this city,” said Joe White, a Co-Op driver. “We’re talking almost 30 per cent.”

Taxi fares increased by 15 per cent two years ago, but White said rising premiums undercut the change.

“The 50 per cent increase in third-party liability we saw back in November, that essentially negates the increase we had in meter rates a little over two years ago. … If the second increase goes ahead on Aug. 1, that’s going to put us back to 2003 in meter rates.”

White owns his car and said he earns between $150 and $200 on an average day. But increased insurance, when calculated throughout the year, and gas, maintenance and weekly taxi licence rental, drastically reduce that amount. On slow days, he said, he can work a 10-hour shift and lose money.

“I’m already working seven days a week, 365 days a year. It’s insane. But it’s the only way I can pay the bills.”

Dave Simpson, president and CEO of Facility Association, said the rate hikes are a necessary response to increased losses.

Between 2010 and 2012, around $4.5 million in premiums were collected in Newfoundland, he said, and around $10 million was paid out.

White isn’t sure whether these losses are being driven by more frequent or more expensive claims.  

But in raising the rates, Simpson said, “we’re only trying to cover the costs of our members.”

Actuaries in Newfoundland had demanded a 70 per cent increase last August. But the Facility Association, according to Simpson, chose to move in 50 per cent increments to mitigate the negative impact on taxi drivers.

A date for the protest hasn’t been set, but McCarthy said it will likely take place next week after people have settled back in following the Easter holiday.

After a meeting last Monday that drew more than 100 taxi owners and operators, McCarthy said he’s confident there’s support for the protest.