TO

:

Rochester Mayor and City Council

From:

Date:

Rochester MN - Taxi Cab Task Force
Brad Jones & Marty Lenss Co-Chairs, Terry Brady – Rochester Taxi Inc., Shelly Kiefer – GM Med
City Taxi, Andy Chafoulias – Yellow Cab Inc., Michael Kleiber – Taxi Driver, Scott Schneider –
Wicked Moose, Tim Geisler – Mayo Clinic, Jerry Williams – Interim President Rochester Area
Chamber of Commerce, Aaron Reeves – City Clerk and Terry Spaeth - City of Rochester.
9-29-14

Subject:

Taxi Cab Task Force Recommendations

The taxi cab task force met formally 9 times throughout the summer of 2014 to study the data and develop
the recommendations for the Rochester City Council. As a reminder, we were engaged to consider the
following questions and present a recommendations based on our findings.
1.) Rate(s): Determine if Rochester’s current model and rate structure still makes sense and how it
compares to other Cities.
2.) Review current ordinance and recommend any changes or modifications
3.) Driver Standards and Training: Determine what minimum driver standards and training programs
should be included in the ordinance.
4.) Cab Standards: Determine the minimum vehicle standards which should be adhered to for the purpose
of licensure and renewal.
5.) Inspections and Enforcement: Determine best practices and recommendations for insuring that the
state laws, local ordinances and special standards are being met on an ongoing basis.
6.) User trends and needs: Determine and plan for the modern trends in Taxi service and user
expectations including technology such as user applications and business models such as Uber, Lyft etc.
7.) Other observations and suggestions.
Attached are the specific recommendations of the task force. After collecting and analyzing data from
over 60 other cities, performing surveys and questionnaires you can imagine that we have gathered
much information and would be glad to make that available to any of you if you so desire.
The task force believes that Rochester’s taxi industry is currently in transition and with these attached
recommendations we can become a leader in best practices, driver standards, safety and ultimately
customer satisfaction which includes a quality taxi service that is part of the overall transportation
master plan with desired maximum wait time of no longer than 20 minutes. We further understand
that it takes investment by the City Council to enable our taxi drivers to deliver these services through
our taxi franchise companies.
The Council also must clearly define enforcement expectations and empower our City staff to carry out
a new screening and permitting process of taxi drivers, enforcement of ramped up vehicle standards,
franchise agreements and monitoring of taxi stand areas.

Taxi Rate Proposal
The Task Force notes that the last taxi rate adjustment in Rochester was made in early 2005. The adjustment included
no automatic increases or triggers for rate changes. The Task Force has researched the largest taxi expenses being 1.)
Labor / wages 2.) Fuel costs 3.) Vehicle maintenance 4.) Insurance. Each of these has shown increases in cost over the
last 10 years. The Task Force believes that some amount of adjustment is needed to “catch up” to these market costs
and an investment is needed to allow the taxi franchises to cover the expenses of offering a premier taxi service to the
residents and visitors of Rochester.
Current rates (established in 2005)
$3.75 minimum fare (includes first 1/8 mile)
$2.25 per mile calculated fractionally after reaching 1/8 mile
$ .39 per minute calculated fractionally when in idle (wait time)
Recommended rates
$5.00 minimum fare (increase the current minimum fare of 1/8 mile to include the first 1/2 mile).
$3.39 per mile calculated fractionally after the first mile.
$ .55 per minute calculated fractionally when in idle (wait time)
Following is a benchmarks that demonstrate what has happened to fuel expenses of running a taxi company.

Fuel Cost

2005 cost (Jan)

2014 cost (August)

% increase

reference

$1.85 average

$3.50 average

89.2%

U.S. Energy Admin

Annual automatic CPI rate adjustment
The Taxi Cab Task Force recommends that the city adopt an annual CPI adjustment (using the Intracity transportation
price index) to the per mile rate (not the minimum fare rate) in January of each year capped at 3% + / - annually.
Intracity Transportation Price Index: (U.S. Bureau of Labor & Statistics): Currently at 297.7 A 37.3% increase since 2005.
Here in Rochester, the goal is not to be average, but to be on the leading edge. This includes attracting friendly; CTA
trained and uniformed drivers who undergo drug testing, criminal background checks and driving history checks.
Attracting these types of employees in an environment of low unemployment and increasing wages and health care is
particularly challenging. This goal includes using late model, well maintained vehicles which are regularly cleaned, and
inspected by ASE certified mechanics. It includes having easy to use technology that allows efficient use of vehicles,
accurate estimates of wait times, and mobile apps for easy use by the customer. This goal also includes having an
increased number of vehicles on the street to keep wait times to a minimum. The requested rates and upgrades are
needed to attain the desired level of service in the taxi industry and to provide the resources needed to provide the
service to taxi users while providing safe efficient transportation.
Fuel Surcharge Protection
The Taxi Cab Task Force recommends a new fuel surcharge protection for temporary spikes in fuel costs. The City
Council may approve a fuel surcharge to be added to base taxi rates in the event there is a significant increase in
gasoline prices. A significant increase in gasoline prices is defined as an increase of more than 25% in any quarter of the
calendar year in the statewide average gasoline price as calculated by AAA. In the quarter in which such an increase
occurs, the Council may approve a fuel surcharge. Such surcharge would be effective from the date of approval until the

end of the calendar year in which the surcharge is approved. The per mile fee will not be impacted by the fuel
surcharge. The fuel surcharge would expire on December 31 of the year in which the surcharge is approved.
Example 1: Fuel spike in first quarter of the year






Average statewide price of a gallon of gasoline at January 1st as calculated by the AAA is $3.25 per gallon.
On February 10th, the average statewide price of a gallon of gasoline as calculated by the AAA is $4.07 per gallon.
Since the increase in the average price is more than 25% within the calendar quarter, the council may approve a fuel
surcharge that would be in addition to the base taxi rate. The amount of the surcharge is at the council’s discretion.
Taxi companies would be able to charge the fuel surcharge in addition to the base rate. The per mile rate will not
change.
The fuel surcharge would be in effect from the date of approval by the council until the end of the calendar year when it
would expire.
The fuel surcharge would be in effect for the remainder of the calendar year even if the average statewide price of
gasoline goes down after the date of approval of the surcharge.
The increase in fuel prices during the calendar year would be included as part of the calculation to adjust the per mile
rate in the following calendar year.
Example 2: Fuel spike in second quarter of the year










Average statewide price of a gallon of gasoline at January 1st as calculated by the AAA is $3.25 per gallon.
At no time within the first quarter does the average statewide price rise above $4.06 per gallon (a 25% increase).
The council would not have the ability to approve a fuel surcharge in the first quarter.
On April 1st, the average statewide price of a gallon of gasoline as calculated by the AAA is $3.95 per gallon.
On May 20th, the average statewide price of a gallon of gasoline at January 5th as calculated by the AAA is $4.95 per
gallon.
Since the increase in the average price is more than 25% within the calendar quarter, the council may approve a fuel
surcharge that would be in addition to the base taxi rate. The amount of the surcharge is at the council’s discretion.
Taxi companies would be able to charge the fuel surcharge in addition to the base rate. The per mile rate will not
change.
The fuel surcharge would be in effect from the date of approval by the council until the end of the calendar year when it
would expire.
The fuel surcharge would be in effect for the remainder of the calendar year even if the average statewide price of
gasoline goes down after the date of approval of the surcharge.
The increase in fuel prices during the calendar year would be included as part of the calculation to adjust the per mile
rate in the following calendar year.
Airport – Downtown Flat Rate & Access Fee
The Taxi Cab Task Force recommends in 2015 to establish a new (non-metered) flat rate charge to and from the
Downtown district for passengers taking taxi services to and from the Rochester International Airport. This service and
fee structure will provide easy to understand flat rate fare for our visitors. Several other cities currently use airport flat
rates and report excellent feedback from customers. We suggest a tiered approach to phasing in this fee structure as
follows:
1. 2015: $30 flat rate inclusive of a $2 per trip airport access fee with an additional $5 per person flat fee for each
passenger starting with the second passenger.
2. 2016: $32 flat rate inclusive of a $2 per trip airport access fee with an additional $5 per person flat fee for each
passenger starting with the second passenger.
3. 2017: $35 flat rate inclusive of a $3 per trip airport access fee with an additional $5 per person flat fee for each
passenger starting with the second passenger.

The Rochester City Council should review the airport – downtown flat rate fee structure as well as the airport access fee
after 2017.
The Task Force further recommends the Airport Access Fee noted above shall apply to all commercial ground
transportation companies operating to and from the airport (ie. limousine, hotel shuttles, etc.).
Internet Based Software Application Services
The Taxi Cab Task Force recommends that the City of Rochester revise the ordinance to allow approved franchises to
contract with pre-arranged car services via internet based software applications to arrange flat rate transportation fees.
The ordinance should require all drivers to obtain taxi cab drivers permit and all vehicles to be properly insured, licensed
and adhere to all franchise standards and service requirements. Enable flat rate fee based services with a suggested
minimum fare of $7.00 and $4.00 per mile after the first mile. The Rochester City Council should review the Internet
based software flat rate fee structure after 2017
Issuance of taxi cab drivers permit
The Taxi Cab Task Force recommends that the City of Rochester adopt a new permit to be issued to drivers who desire
to become taxi cab operators. The task force suggests the following requirements for all Rochester Taxi Cab drivers.








Must be a minimum of 18 years of age
Must have valid Minnesota driver’s license
Must be able to speak, read and write English by passage of test administered by city clerk’s office.
Must be clean in dress and appearance. Must wear company uniform including a collared shirt and long
trousers.
No previous convictions of crimes related to sexual abuse, domestic abuse or assault.
No driver’s license revocation in the most recent 5 years.
No previous convictions related to drug or alcohol use in the most recent 5 years.
Must show proof of passage of drug test (within the last 30-days) upon application of permit and be subject to
random drug tests administered by the franchise through a third party consortium (approved by the City) at the
request of the city clerk.
Required to be certified and current Certified Tourism Ambassadors within three months of hire date.
Must have City issued taxi drivers permit (including photo) and name plate displayed in clear view to passengers.

Franchise agreement regulation suggestions
The Taxi Cab Task Force recommends that the City of Rochester the following changes to the existing taxi franchise
requirements for all Rochester Taxi Cab franchises.



Must allow for both cash and credit card payment for services in all vehicles.
Required that all drivers and customer service representatives are certified and current Certified Tourism
Ambassadors within three months of hire date. Franchise pays for initial program fee and annual renewal.
Must establish company policy for uniform dress including a collared shirt and long trousers.
Revise 95.07. Inspection of Vehicles. Subdivision 1. Prior to the initial use and operation of any vehicle under the
authority of any franchise, said vehicle shall be thoroughly examined and inspected by a certified mechanic and
found to comply with all standards of safety prescribed by the laws of the state or the City. An inspection report
showing that a vehicle has met the standards of safety prescribed by law must be presented to the city clerk at the
time of license application.



Subd. 2. Every vehicle operating under authority of any franchise shall be inspected from time to time and at least
annually by a certified mechanic and verified by the city clerk to insure the continued maintenance of safe
operating conditions. The operation of any vehicle which fails to meet the standards of safety established by laws
shall be discontinued until such time as the deficiency is eliminated.
Add a provision that taxi cabs must be of late model defined as no older than 8 years old.
Add random inspection of fleet by city as determined by city on ongoing basis.
Revise 95.04. Insurance or Bond Requirements. Subdivision 1. Before any franchisee operates any taxicab it shall
secure and during the term of the franchise, maintain in force at all times, a liability insurance policy covering each
vehicle operated as a taxicab, having limits of not less than $100,000.00 $300,000.00 for bodily injury to any one
person, not less than $300,000.00 $500,000.00 for injuries to more than one person which are sustained in the
same accident, and not less than $50,000.00 for property damage resulting from any one accident. Said policy of
insurance shall inure to the benefit of any person who shall be injured or who shall sustain damage to property
proximately caused by the negligence of the grantee, its servants or agents. A copy of said policy of insurance or a
certificate of such insurance shall be filed in the office of the city clerk. Such insurance shall be carried with an
insurance company authorized to do business in the State of Minnesota.

City

Minimum Fare

1/8 mile and $2.25 /
$3.75 mile thereafter

Rochester

Baltimore

Cedar Rapids

Cleveland

Denver

Detroit

Grand Rapids, MI

Houston

Distance covered
under minimum fare

$

$

1/4 mile and $3.25 /
4.00 mile thereafter

1 mile and $3 /mile
3.50 thereafter

Zone fares or flat rate
concession fees

Taxicab license requirements Enforcement

N/A

Vehicles inspected by certified
mechanic prior to operation and
report sub,itted to City Clerk. Also
Council may revoke a
Requires franchise with each franchise on 30 Day notice Must be licensed, neat and clean subject to annual inspection by
and wear an ID badge at all times certified mechanic.
vehicle licensed by City Clerk of violation

airport

Code enforced by State
Public Service Commssion
director. Provide the
County with authority to
regulate. Director may
Must be part of an operating suspend or revoke after
Association
hearing

N/A

Vehicles inspected before put into
service or ownership and as
needed as determined by Police
At least 18 years of age, clean
Department or City Fleet Manager.
dress, able to speak, read and
Cabs must be marked on outside
write
English
language,
have
Revocation may occur after
hearing, for noncompliance background check. License issued with name of company, phone no.
2 licensed vehicles minimum of ordinance.
and permanently affixed roof sign.
by City and must be displayed.

Driver Standards & Training

Must be 21 years of age and be
able to speak, read and write
English and have Cladd D drivers
license.

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
background check. License issued
by City and must be displayed.

Director of Licenses and
inspectors enforce
provisions of taxi code.

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
background check. License issued
by City and must be displayed.
Nothing found in ordinance

$

1/8 mile and $0.38 per Separate airport rates
3.75 1/8 mile thereafter
based upon miles

$

Separate flat rate charges
from Denver Airport and
1 mile and $2.25 / mile $4.15 gate fee for each
trip through
3.50 thereafter

Four operating taxicab
companies licensed by
Colorado Puiblic Utilities
Commission

$

Separate airport rates
1 mile and $2.25 / mile based upon miles and
time of day.
3.50 thereafter

Drivers must be well groomed.
May be independent
operators. City has maximum Enforcement conducted by No shorts, cutoffs. Sleeveless
shirts or halter tops.
Police Chief or designees
of 1,310 "bonds" available.

$

$

1 mile and $1.40 / mile Flat fare from airport to
3.85 thereafter
downtown

1/11 mile and $0.20
per 1/11 mile
3.75 thereafter

Separate flat rate charges
from airports. Also have May be independent
alternative CBD flat rate. operator.

Vehicles may be inspected at any
time by the Director or Chief of
Police.

Commissioner of Licenses
may suspend or revoke
licenses for violations, or
recommendation of Police
Chief.

May be independent
operator but must be part of
association. A maximum of
500 licensed vehicles in City.

Taxicab company license
required. No info found on
min. number of cabs.

Vehicle Standards & Inspections

Vehicles subject to inspection by
Commissioner of Licenses upon his
/ her own initiative or request by
Police Chief, or citizen complaint.

Vehicles subject to inspection by
Polie Department semi annually, or
as needed based upon complaint.

Each license holder must
have uniform color scheme
and insignia on cabs, to be
registered with City Clerk
prior to use.
Nothing found in ordinance.

Inspections by state certified
technician required before initial
licensing and prior to annual
license renewal.

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
background check. License issued
by City and must be displayed.
Taxi ordinance enforced by Drivers must be well groomed, no
Director od Public Safety
shorts, tank tops

Must be 4 cylinder or hybrid.
Requires specific color scheme and
attached certification decal.
Vehicles inspected at license
issuance and annually by director

Indianapolis

Jacksonville

Kansas City

Louisville

Milwaukee

Minneapolis

St. Paul

Sioux Falls

License administrator may
conduct hearing related to
complaints, and impose 1
week suspension.

Drivers must be dressed in clean
outerwear with collared shirt,
slacks, blouse or dress. No
shorts, etc..

Division of Inspections conduct
semi annual inspections.

1 mile and $2.85 / mile
2.50 thereafter
N/A

Director of Economic
Development is authorized
to enforce ordinance and
may suspend permit upon
5 licensed vehicles minimum sufficient cause.

Drivers must wear unform if
owner requires such, and badge
or nameplate must be in plain
view.

Cabs are inspected every 4
months.Vehicles need unifrm color
scheme, insignia and ID

$

1 mile and $2.10 / mile
2.50 thereafter
N/A

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
background check. License issued
May be independent
by City and must be displayed.
operator. A maximum of 500 Director of Neighborhood Drivers must be well groomed, no
licenshed vehicles in City.
Services enforces ordinance cutoff shorts or tank tops.
New applicants must permit and may suspend or revok Bermuda shorts may be worn
Duty of cab owners to ensure
at least 10 vehicles
permits after hearing.
between 5/1 and 9/30
vehicle condition.

$

Have a downtown /
airport flat rate of $19.55
1 mile and $2.25 / mile + $3 / additional person May be independent
3.45 thereafter
with 5th passenger
operator, company or LLC.

$

$

$

1 mile and $2 / mile
4.00 thereafter

Minimum $15 fare from
airport

1 mile and $3.50 / mile
3.75 thereafter
N/A

$

1mile and $3.75 / mile
4.90 thereafter
$4 airport access fee

$

1mile and $3.75 / mile
6.00 thereafter
$4 airport access fee

$

1/10 mile and $0.35
3.00 per 1/9 mile thereafter N/A

20 licensed vehicles
minimum.

Ordinance enforced by
Director of Licensing. May At least 18 years of age. Drivers
revoke or suspend permit must complete hospitality and
after hearing.
safety training.

May be independent or LLC.,
but must be affiliaited . A
Licesnes may be suspended
maximum of 420 licensed
or revoked by City Council
vehicles in City.
after hearing

At least 18 years of age, must be
of clean appearance and dress.
Also have had defensive driving
course.

Vehicles inspected by Director at
licensing and semi annually.
Vehicles inspected by Director of
Public Works upon permit issuance
or renewal, or when directed by
Police Chief or City Clerk on
random slection basis or upon
complaint. City has color scheme
designations for the various
affiloiations.

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
background check. License issued
by City and must be displayed.
Drivers must be well groomed, no
cutoff shorts or tank tops.
Licesnes may be suspended Bermuda shorts may be worn. A Vehicles inspected from time to
time by licensing oficial or upon
or revoked by City Council test and driver trainng course
after hearing
required.
complaint.

May be independent
operator
May be independent
operatorApplicant must
affiliate with service company Licesnes may be suspended At least 18 years of age and have
with minimum of 5 city
Vehicles inspected at city service
or revoked by City Council passed taxicab driver training
licensed vehicles
course.
garage at licensing and annually.
after hearing

May be independent
operator

At least 18 years of age, clean
dress, able to speak, read and
write English language, have
Licenses may be suspended background check. License issued
or revoked by City Council. by City and must be displayed.

Vehicle owners are to ispect every
3 months or 3000 miles and
records to be open to city for
inpsection, and city may inspect at
any time.

Must be licensed company. If
have 10 or more vehicles,
must be "full service meaning
24/7 operation.

Taxicab Administrator
enforces licensue and
ordinance requirements
and may suspend or revoke
permits.

Must have valid chauffer license
and be able to speak, read and
write English. Must be cleain in
dress and appearance.
Drivers must pass disability and
City Trafic Enginneer may sensitivity training program and
suspend or revoke permits have public passenger vehcile
for violations.
license.

Ann Arbor

$

1 mile and $2.50 / mile
3.00 thereafter
Detroit Metro apply

Madison

$

1 mile and $2.80 / mile Have both meter and
4.00 thereafter
zone taxicab services

May be independent
operator

1/10 mile and $0.25
per 1/10 mile
3.50 thereafter

Requires certificate from City.
May be contract drivers or
unincorporated association. City Trafic Enginneer may
Each certificate holder must suspend or revoke permits
have 5 qualified vehicles.
for violations.

Des Moines

$

N/A

No informatio on vehicle
inpsections.
The DOT designates color schemes
for licenseeLicesnsee is responsible
for vehcile inspections every 5000
miles.

Each certificate holder furnished
proposed standard of dres to City
traffic engineer . Must be
appropriately dressed and neat No specific language on vehicle
and clean in appearance.
inspections.