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59 chapter five CONCLUSIONS Taxis have been around for at least several centuries. Mod- ern taxis are generally considered to have evolved from horse-drawn carriages for hire in Paris and London in the mid-1600s. By the early 1900s, New York City had gasoline-powered automobiles serving as taxis, and since then the private taxi industryâs role in public transportation has developed, with growth and challenges tracking major events in the coun- tryâs history. For example, regulatory limits on the number of taxis in a city emerged from the Depression years of the 1930s, when many cities witnessed âchaosâ with too many taxi drivers competing for business. The beginning and growth of public subsidies for tran- sit and human service agencies in the 1960s and 1970s had an impact on the taxi industry, particularly as human service agencies, operating vans subsidized by the federal government, took business from taxis. Human service agency clientsâolder adults and people with disabilitiesâhad been an important market for taxis. By the mid-1970s, âparatransitâ entered the public trans- portation lexicon, and taxis were involved in some commu- nities as the operator of dial-a-ride programs and shared-ride taxi services. The ADA of 1990 and the subsequent growth in demand and cost for mandated ADA paratransit service brought new opportunities for the taxi industry, as public transit agencies recognized that taxis could serve as a cost-efficient provider of ADA service. The 2013 National Transit Database (NTD) shows that almost 10% of urban transit agencies use taxis for their demand response mode, which is predominantly ADA paratransit. With continuing concerns in the transit industry about constrained budgets and costs, particularly for ADA para- transit, this synthesis provides a snapshot of how taxis are currently used by public transit agencies to serve people with disabilities and older adults and includes the agenciesâ perspectives on the advantages and challenges of using taxis. An important objective was to learn from the experi- ences of agencies that now use taxis and share their advice and lessons learned with other agencies considering the use of taxis. To develop this snapshot, the synthesis study reviewed rel- evant literature, conducted an online survey of transit agencies with information obtained from 39 of 45 agencies surveyed, and interviewed five of the transit agencies for detailed infor- mation on their use of taxis. Interviews were also conducted with two taxi companies that provide services for transit agen- cies to balance the transit agency perspective. LITERATURE REVIEW A number of findings from the synthesisâs review of literature addressing taxis and their use within the public transit indus- try are summarized here because many of these were echoed in results of the surveys and case examples. These include the following: Benefits to transit agencies with use of taxis: â¢ ADA paratransit trips provided by taxis can be less costly than those provided by small bus, van, or other modes, so a primary benefit of using taxis is their cost efficiency. â¢ Other important benefits include taxisâ responsiveness and flexibility, particularly with their ability to provide same-day service (e.g., âadd-onâ and âwill-callâ trips). â¢ Transit agencies that use a same-day taxi program to sup- plement ADA paratransit service and help meet ADA trip demand can achieve cost savings when riders choose the same-day option instead of next-day ADA; the subsidy level for the same-day trips typically is substantially less than the subsidy for the next-day ADA trips. Monitoring and oversight: â¢ Transit agencies must devote considerable time to oversee and monitor their use of taxis and verify trips; these are important functions that reduce the potential for misuse. â¢ Technology for fare payment (for example, with a smart card or debit card and supporting software for collecting and processing trip data) can improve monitoring and control and reduce costs. Accessible taxi vehicles and service: â¢ There is a lack of accessible taxi vehicles. Notably, acces- sible taxis cost more to purchase and operate than do taxi sedans. Transit agencies can assist with accessible vehicle
60 acquisition by leasing vehicles to the taxi company and often by leveraging FTA grant funds. â¢ Accessible taxi operating costs are greater because of higher fuel costs, higher liability insurance, and the additional time required to serve riders who use wheelchairs. â¢ Taxi companies can be required as well as incentivized to add accessible vehicles to their fleets, such as through regulatory mandates or new licenses made available only for accessible vehicles. Taxi companies can also offer incentives, such as discounting the driverâs vehicle lease fee for an accessible taxi. Taxi drivers participating in transit agency subsidized service: â¢ Trips for taxis have to be financially attractive to taxi drivers because more than 90% of drivers are independent contractors. â¢ Training for taxi drivers is important. Challenges: â¢ Taxi companies may have issues meeting a transit agen- cyâs requirements for liability insurance and for FTAâs drug and alcohol testing. â¢ The problems with taxis most frequently cited relate to a lack of accessible vehicles, oversight and contract compliance, and service quality and reliability. SURVEY, CASE EXAMPLES, AND TAXI COMPANY INTERVIEWS Primary Advantages of Using Taxis The first reported major advantage to public transit agencies for using taxis is their cost efficiency. For ADA paratransit, survey respondents reported that taxisâ ability to âimprove overall cost efficiencyâ is one of two primary advantages for their use. Reported cost data from the survey for next-day ADA and same-day service show average costs per transit agency-sponsored taxi trip range from $14.16 to $28.17. The case examples also showcase taxisâ cost efficiency. One of the case example transit agencies pays $37.50 for a next-day ADA trip provided by its taxi contractor compared with $57 on the dedicated van service. The same agency pays just $12 per trip on its same-day program provided for ADA riders, representing significant cost savings compared with next-day ADA trips. According to survey results, the second major advantage for ADA paratransit is the responsiveness of taxis, which serve overflow trips on a prescheduled and real-time day-of- service basis for trips during peak periods and at other times. For same-day service, the key advantage is that taxis help meet demand for ADA paratransit trips. Other Advantages Other advantages reported with some frequency by surveyed transit agencies include the ability to expand service without buying new vehicles, reducing or eliminating trip denials, providing service in outlying parts of the service area, pro- viding a same-day trip option for ADA-eligible riders, and serving seniors and people with disabilities who are not ADA eligible. Public Transit Agencies Use Taxis in Various Ways Taxis are used by public transit agencies in many ways owing to the flexibility of taxis. Survey results show that 13 of 39 (33%) agencies with a taxi-based service use taxis for their ADA para- transit service; 11 (28%) use taxis only for a same-day service; and 15 (38%) use taxis for both ADA paratransit and same-day service. Six of the agenciesâ ADA services are open to people with disabilities and older adults who are not ADA eligible. Agencies also report using taxis for employment trips for low- income workers, late-night and holiday public transit service when fixed-route buses do not operate, Medicaid transporta- tion, âveteransâ service,â and to serve trips at locations that the bus cannot safely access. For ADA paratransit, taxis are most frequently used on a nondedicated basis (89% of surveyed agencies), with transit agency trips intermingled with trips for private-pay, general public riders. Taxisâ role in service provision varies, with agencies often reporting multiple functions. Most frequently, taxis serve trips throughout the service day that do not fit on the dedicated vehiclesâ schedule (64%). Trips for taxis are assigned in different ways, which are not mutually exclusive: prescheduled as individual trips and sent to the taxi company before the day-of-service for taxi dispatch (68%), assigned on a real-time basis on day-of-service (52%), and prescheduled onto a manifest to be operated by a taxi driver (36%). Same-day taxi service is provided to support ADA para- transit service, such as providing will-call trips or trips dur- ing peak periods that the dedicated provider cannot serve, and also functions as a supplemental service to help meet ADA paratransit demand on a lower-cost-per-trip basis. Eleven of the 39 (28%) agencies surveyed use taxis only for same-day service, four of which serve ADA-eligible riders exclusively; the other seven also serve other people with dis- abilities and older adults who are not ADA eligible. One of the case example agencies uses sedans, instead of taxis, for its same-day program because the small community does not support a taxi industry; trips are subsidized according to the distance eligible riders live from the townâs activity center. Same-day programs that function as supplements to ADA paratransit to help meet ADA trip demand with a lower cost per trip, should have mechanisms to ensure demand does not exceed the available budget. Riders often prefer same-day service to next-day service, creating trip volumes that may not be sustain-
61 able. Transit agencies have employed different mechanisms to manage demand, such as subsidizing trips only to a defined dollar amount on the meter, providing a defined monthly sub- sidy amount to eligible riders, setting a cap on the number of taxi trips allowed per day, limiting riders to two or four trips per day, and confining the service area so trips are short. Transit agencies most commonly pay for taxi services according to meter charges, which are mileage based. For ADA paratransit, transit agencies use meter charges for both dedicated service (47%) and nondedicated service (54%). For same-day service, almost half (48%) of agencies pay based on the meter and about one-third (32%) pay by the trip. Somewhat more than half of agencies responding to the question on pay- ment for a passenger no-show provide some type of payment, typically $5 or $10. Verifying and Auditing Taxi Trips Can Be a Challenge Verifying and auditing taxi trips require concerted transit agency attention and efforts, and this was the most frequently cited challenge in using taxis by surveyed transit agencies. Of 31 surveyed agencies that provided a brief explanation of their verification process, four identified swipe or debit card technology with automated monitoring and audit functions. Remaining agencies use a variety of techniques, with some matching taxi invoice data with trips in the transit agencyâs scheduling software and others by examining individual trip information submitted by the taxi company, such as by careful review of used vouchers, which is a âvery tedious process,â according to one agency. The swipe card technology provides major advantages for monitoring and auditing taxi services. Details from the experiences of two case example transit agencies with the technology show benefits to the transit agency, with compre- hensive trip data allowing each trip to be verified and with a resulting data set of trips useful for planning purposes; to the taxi companies and drivers, with less administrative effort than that required with vouchers or scrip; and to the riders, with a streamlined and more secure payment method. Components of the technology, in addition to the swipe card, include hardware (equipment) in the taxi vehicle and software enabling the in-vehicle equipment to read the card and software for the back office functions for data process- ing. The card is swiped at the start and end of each trip, col- lecting comprehensive information that includes location data for trip origin and destination and time stamps for both locations. It is difficult for taxi drivers or riders to misuse the service with this technology. Although technology provides advantages, its implementa- tion can be challenging, requiring significant effort and time, including training for taxi companies and drivers. Com- prehensive training and sometimes some hand-holding are needed to introduce the swipe card technology to riders, but reportedly riders generally adapt to the new method. Lack of Accessible Taxi Vehicles and Service The lack of accessible vehicles was the second most frequently cited challenge by surveyed transit agencies in using taxis. Although almost all (more than 90%) of the agencies use at least one taxi company with accessible vehicles, scheduling trips is compromised if the company does not have enough accessible vehicles. One case example transit agency reported that its taxi company under contract for ADA service some- times sends back trips because it does not have an adequate number of accessible vehicles. If the taxi company has no accessible vehicles, other arrangements are made. One of the case example agencies contracts with a large human service agency to provide the accessible trips for its same-day program. Given the extra capital and operating costs for an acces- sible vehicle compared with those for a taxi sedan, adding such vehicles to a fleet is often the result of mandates or incentives from the taxi regulatory body. For example, in San Francisco special permits have been issued specifically for accessible taxis. However, almost half (49%) of surveyed agencies reported that the taxi regulatory body in their juris- diction does not require accessible vehicles. Transit agencies can help their taxi companies acquire accessible vehicles. Eleven (30%) of surveyed transit agencies provided such assistance, such as leasing accessible vehicles to the company for its use. Once acquired, the taxi company must have drivers for the vehicles, and incentives are impor- tant to encourage drivers to lease accessible vehicles and serve trips for riders using wheelchairs. As an incentive, one of the taxi companies interviewed discounts its weekly lease fee for drivers of an accessible vehicle. Both taxi companies inter- viewed reported collaborative efforts with the transit agencies they serve in that the agencies provide driver incentives for accessible service. One reported an extra payment to the driver of $5 per accessible trip; the other said the extra per-trip payment is $10, with two additional incentives. Other Challenges Beyond the two major challenges reportedâefforts needed for oversight and monitoring, and lack of accessible vehiclesâa number of agencies reported challenges with reporting require- ments. Minor challenges reported most frequently include issues with driver quality (e.g., providing assistance to riders) and overall service quality. Impact of Transportation Network Companies An emerging challenge to transit agenciesâ use of taxis is TNCs, also called app-based ride services, such as Uber and Lyft, which are competing with the taxi industry for drivers
62 and riders. Twenty-six transit agencies responded to the survey question on TNCs, with about half reporting no effect as of yet on the agencyâs use of taxis and six reporting minor impacts. Although TNCs are not a significant problem currently, a num- ber of transit agencies expressed concerns about the future, such as what impact increased TNC growth would have. Three agenciesâincluding San Franciscoâs, where as many of one- third of the cityâs 8,500 taxi drivers have left the industryâ reported more significant impacts. More troubling to the transit agencyâs use of taxis to serve riders with disabilities is that as many as 25 of the 100 accessible taxis in San Francisco are not in use because the taxi companies lack drivers. The cityâs taxi company with the most accessible taxi permits (17) reported that only 11 of its accessible taxis are in service. Lessons Learned The experiences of transit agencies collected through this synthesis study provide advice and lessons learned for other agencies considering the use of taxis. Two messages emerged clearly. The first is the need for concerted oversight and monitoring of taxi services, which corresponds to the most frequently cited challenge to taxi use. One transit agency advised, âBe very careful to monitor the service,â and another said, âHave very structured oversight and monitoring activi- ties.â Perhaps it is a cautionary tale that comes from one of the case examples: the transit agency found through oversight that its taxi contractor was not providing service according to the contract, and the agency had to make alternative arrangements on short notice. The second clear message relates to the importance of understanding the business and culture of the taxi industry and finding a taxi company interested in building a relationship with the transit agency. Both the survey responses and case examples point to the importance of developing a relationship with the taxi company, so the company understands the transit agencyâs requirements, such as driver training, data reporting, and in some cases drug and alcohol testing. Balancing that, the two taxi companies underscored what transit agencies should understand about their involvement with taxi compa- nies: driver incentives are important particularly for accessible service; operating accessible vehicles is more costly than oper- ating traditional taxi sedans, and the profit margin slim; transit agency requirements such as data reporting cost the taxi com- pany in the form of added administrative time; and taxi drivers are paid as often as daily, so delayed payments from the transit agency or its primary contractor are problematic. One of the taxi companies also noted that a transit agency that wants to take advantage of the lower cost structure of the taxi industry cannot then layer on extra requirements that are costly, such as expensive liability insurance, and still expect the benefits of the taxi companyâs lower costs. As a component in relationship building with a taxi company, transit agencies reported it is important that the taxi company have a commitment to the service the tran- sit agency is subsidizing, with one agency calling this an âemotionalâ commitment. Both taxi companies interviewed appeared to have this commitment. One of the companies stated that people with disabilities and seniors had always been âour ridersâ and that they had served those riders for years predating publicly funded services; the company saw its involvement with transit agency service as an extension of that role. The second company started accessible taxi service before any special permits or mandates for such vehicles because the wife of the company president had a disability, and the company has grown its accessible ser- vice to âgive back to the communityâ and because âitâs the right thing to do.â Other useful conclusions from transit agencies that use taxis: â¢ Clearly define the service the taxi company is to operate; â¢ Driver training is important; â¢ Focus on the need and requirements for data reporting; â¢ Technology is an advantage for trip monitoring and auditing; â¢ Ensure riders understand what to expect with taxi serviceâlimit expectations; â¢ There may be service quality issues; and â¢ Incentives are needed for accessible taxis and accessible service. SUGGESTIONS FOR FUTURE RESEARCH By design, a synthesis study examines a limited number of transit agencies and focuses on the state of the practice at a point in time. Given that, there are a number of topics that deserve additional attention or research. The first is the impact of TNCs on the taxi industry and how that affects transit agenciesâ use of taxis. TNCs are appearing in more and more communities, disrupting the taxi industry. A con- cern for the transit industry is captured by one of the sur- veyed transit agencies: âOur concern is that Uber will take so much taxi business that the taxis will have to decrease their fleets, leaving the Call Center without a much needed transportation resource.â A second topic for consideration is a rigorous examina- tion of the effect of supplemental same-day taxi programs on demand and cost for ADA paratransit service. To what extent does a same-day service meet demand that otherwise would be served by next-day ADA paratransit? To what extent does the same-day program induce new demand for trips? What are the appropriate pricing strategies for the taxi trips so that the same-day service is cost-efficient? A third area for future study would examine and identify technologies that would allow taxi companies to efficiently meet the reporting and oversight requirements of transit
63 agencies while minimizing the companiesâ administrative efforts and expense. A fourth topic would explore and identify the most important incentives for taxi drivers to provide transit agency subsidized services, particularly accessible service for individuals with disabilities. The findings of this syn- thesis suggest that taxis are a cost-efficient resource for the transit industry, and it would be useful to understand the more important motivators to ensure that taxis continue to be that resource. A fifth item for future research is the compilation of a âhow-toâ manual for transit agencies with guidance for plan- ning and implementing taxi-based services. Such a manual could provide a template for starting a new service as well as monitoring and evaluating the service. Among other compo- nents, the manual might include model requests for proposals; guidance for reporting and billing; information on technolo- gies to automate rider payment and improve oversight and monitoring; taxi driver training practices; requirements related to FTA drug and alcohol testing; and passenger rights and responsibilities.