The reality, however is that cabs are a huge industry in major cities, and for the most part, the owners and drivers want the business to be as up-front, clean, and well-run as their passengers do.

“You can’t get the politicians to understand the industry,” says John Duffy, publisher of Taxi News, an industry newspaper in Toronto.

“Vast majority of politicians don’t even think of taxis as a business. It’s almost as if it’s a social welfare scheme.”

“They seem to be looking at short-term political gain, instead of thinking of the long-term health of an industry, and it’s a main reason, if not the principal reason, that the industry’s in trouble.”

Why focus on Toronto, you may ask? Well, I’m a little biased, having driven a cab there myself for six years back in the early 1980s. Sadly, but not all that surprisingly, Duffy confirms that the problems I saw with the industry back then really haven’t changed all that much.


Here’s how taxis work in most cities. During his shift, a driver takes in the money from fares and tips, and from that, he subtracts his expenses. If he’s only a driver, and rents the car from a taxicab owner, he has to pay the cost of the rental (which can be daily, weekly, or monthly) and his gasoline. Duffy says that in Toronto, cabs rent for around $1,000 to $1,200 a week.

In addition to his driver’s license, he also has to have a cab driver’s license, which in Toronto costs $300 each year to renew. Drivers can often go home at night with very little left over, especially in warmer or dry weather when people are more willing to walk or wait for a bus.

If the driver is an owner/operator, expenses can be even higher. He won’t pay that rental fee, of course, but he had to buy the car (which may come with age restrictions in some jurisdictions, so he’ll have to replace it with another at specific intervals), and outfit it with a meter, roof light, and in some cities, an in-car security camera.

He has to maintain it, and with the kilometres that taxis rack up, oil changes and new tires are needed frequently. He has to insure it. If he runs it in a taxi company, which gives him access to dispatched calls, the fees are anywhere from $350 to $600 a month. He also has to pay his gasoline and renew his cab driver’s license.

Then, there’s the special taxi license plate that’s screwed to the bumper. In many cities, including Toronto, these are very expensive pieces of metal.

In almost all jurisdictions, the city issues a specific number of taxi plates. It’s generally linked to the population, with one cab for however many people, and more may be issued as the city grows. These plates, if and when they come out (Toronto hasn’t issued any new standard plates in more than 15 years), go at a nominal fee to those in the industry who have waited for years on a list.

Existing plates can be sold privately, though, and for plenty of dough. Currently, you’ll pay in excess of $250,000 for one in Toronto (which has a controversial two-tier plate system that also includes single-operator plates that can’t be resold). If the cab owner doesn’t own a plate, he rents one from someone who does.

The price on the meter is set by the city, which takes all of those expenses into account. Fare increases can be relatively rare. You might think that drivers would welcome more cash per ride, but most agree that fare raises are a double-edged sword: when they go up, ridership tends to go down, and there are already too many drivers who wait a long time between fares.

“There are about 5,000 taxicabs in Toronto, and that’s between 600 and 1,000 too many cabs on the road for the level of business.”

Those numbers don’t include limousines that can only be dispatched to telephone calls, or pick up fares at the airport.

In New York City, arguably the world’s most famous taxicab centre, politicians are working with the state capitol to consider issuing plates for these call-only limos that would also allow them to accept “street hails,” the industry’s term for flagging a cab.

“Some (taxi license) owners and operators are taking the city to court over this, saying enough is enough,” Duffy says. “They say it will kill their business, but Albany and the city said it will add a billion dollars to city coffers. They just want to add the money to the city treasury, rather than doing something for the business.”


Photo: Nissan

New York also recently unveiled its “Taxi of Tomorrow,” the Nissan NV200 (pictured above), which will become the city’s official cab in the fall of 2013. With some exceptions for wheelchair-specific vehicles, if you want to operate a cab in New York, this is what you’ll have to buy; it’s expected to be around US$29,700.

The NV200, which will muscle out the Ford Escape Hybrid currently used, is designed for the job, with sliding doors, navigation system and backup camera, a transparent roof panel, a carbon-lined headliner panel to reduce odours, and in the passenger compartment, separate air conditioning controls, USB and charging ports, reading lights, and a flat floor.

The city may be a little quieter in future, too: lights flash on the outside of the car when the driver honks the horn, which Nissan says will result in it being used less frequently. Having watched New York drivers, we’ll wait and see how that works out.

Of course, all of the driver’s expenses, all of the politics, all of the “behind-the-scenes” stuff really don’t mean much to you when you simply need a cab. So here are some tips and reminders to make the ride as smooth as possible:

  • The price includes the base fee when the meter turns on (called the “drop”), along with charges for the distance travelled, and if the car stops, waiting time. Some people believe that the meter money goes to the company, and the tips to the driver, but this isn’t the case. The driver pools it, takes out his expenses, and keeps the rest as his take-home pay.
  • Empty cabs that sail past when you’re trying to flag them down are probably on their way to a radio call (someone who has called and ordered a cab), which takes priority. If a driver has been assigned a call and he takes you instead, he faces discipline from the dispatcher.
  • If you call for a cab, be ready. If you’re in an apartment building, come down to the lobby. Drivers lose money waiting for you. They’re also within their rights to turn the meter on when they arrive, and you’ll owe that waiting fee.
  • Never call two companies (some people do, to take “the one that gets here first”) and if you change your travel plans, call back and cancel. “Dead calls,” where no one wants his services, waste the driver’s time and fuel.
  • Give the driver your destination, rather than “just drive, I’ll tell you where to turn.” Taxi driving can be a very dangerous job, and an unknown route could have him worrying for his safety.
  • Your driver is required to display his photo ID, and there must be a rate card that outlines the fares. If you’re not happy with the service, report the taxi’s plate number (not the number on the side of the roof light, which is the car’s “call number” in its company) to the local licensing commission.
  • Depending on the driver, it may be possible to negotiate a flat rate for a trip, but in many cities, the law requires the meter to be on.
  • And please… if you pour a drunken friend into a cab to send him home, make sure he has enough money, and give the driver the address. Better yet, pay the fare up front. Believe me: it will make life much better for everyone.