Critics Question Logistics Of Taxi Surcharge
As part of the MTA rescue plan passed in Albany last week, taxi riders will soon get hit with a new 50-cent surcharge that could pose a problem for those collecting it. NY1's Bobby Cuza filed the following report.
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The idea seems simple -- slap a 50-cent surcharge on every taxi ride in the city, then use the money, an estimated $85 million a year, to fund mass transit.
But the devil may be in the details.
Industry representatives say the new surcharge may be virtually unenforceable because it puts taxi owners in charge of collecting it.
"There are 13,000 some-odd taxi medallion owners. A lot of them lease to my members. So my members are responsible. Cabs have multiple drivers, it's a bookkeeping nightmare," said David Pollack of the Committee For Taxi Safety.
Currently, there is no sales tax, or any other tax, taken out of a taxi fare. There's also no mechanism for collecting one. Most drivers pay a fee to lease the taxi from a garage, but then, aside from paying for gas, all the money they make goes directly into their pocket. So it's no surprise most don't seem to understand how the new surcharge will work.
"I'll collect it, but that have to pay me. See, because I don't work for the city. I work for myself. They have to pay me for that," said one city cab driver.
But they won't be paying him anything. Instead, critics say, the surcharge will lead to fewer passengers and lower tips.
"There's going to be a cut in the income of drivers. And if you speak with drivers, what you will hear is, the last couple of months, they're making less money than they were before because of the economic downturn," said Pollack.
State officials say cab owners must submit the tax collections quarterly. Violators will be subject to penalty, but how that will be enforced is also unclear.
The surcharge must be in place by November, leaving the taxi industry less than six months to figure out how to collect it.