Vegas cab industry disputes audit suggesting $47M overcharge

AP News
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Posted: Jun 17, 2016 6:36 PM

LAS VEGAS (AP) — A report commissioned by Nevada taxi companies disputes that the industry was overcharging Las Vegas-area customers by more than $47 million a year.

The analysis, completed on behalf of the Livery Operators Association by economist Jeremy Aguero and his company Applied Analysis, was a response to a scathing state audit of the Nevada Taxicab Authority that was released in January. Aguero's report contends that potential overcharges were closer to $3 million a year.

He told a panel of lawmakers on Thursday that the taxi industry and its regulators did not systematically gouge customers, and "allowing such a conclusion to stand puts our tourism industry at risk."

The biggest single factor in the $47 million figure was about $20 million a year in credit card fees. State auditors said a $3-per-transaction fee when riders pay a fare with a card was too much and far exceeded the actual cost of processing a credit card.

Aguero's report argues that there's nothing in Nevada law that would preclude the fee or limit it to covering the costs of the processing. He noted that cities around the country tack a variety of charges onto cab fares — including fees for vomit cleanup and for packing a surfboard into a Hawaiian taxi — and that there's little uniformity in fees from region to region.

He also challenged the auditors' charge that a recent rate hike wasn't supported by evidence. Aguero said the rate hike generally kept pace with inflation.

Steve Weinberger, who oversees the state division that wrote the audit, said his office still has concerns about whether the agency that approved the rates is doing enough to rein in taxi costs.

"On its face, that doesn't really look like they're looking out for their constituents because there's a lack of accountability," he said Thursday at a legislative subcommittee meeting.

Lawmakers on the panel didn't make any decisions about taxi fees and surcharges, but they did take action Thursday on another audit recommendation: that the Nevada Taxicab Authority be abolished and consolidated with another agency.

The panel voted to recommend that the Taxicab Authority, which oversees Clark County cabs, merge with the Nevada Transportation Authority, which oversees taxis in the rest of the state. They want the Legislature to reorganize the agencies as a full, stand-alone state department, instead of as a division within the state's Department of Business and Industry.

Legislators said taxi regulation has been a consistent source of problems and needs more dedicated attention. The full Legislature is expected to tackle the reorganization when it reconvenes next year.

"I've been here for over a decade and the problems haven't improved," said Republican state Sen. James Settelmeyer, who chaired the subcommittee. "Something's got to change. This is just not working."