The World's Most Expensive Cabs
This month new cab fares went into effect in New York. Fares will rise an estimated 17 percent under a new cost structure approved by the Taxi and Limousine Commission this summer. For each fifth of a mile, or each minute in traffic, the fare goes up 50 cents, instead of 40, in the new system. It's the first across-the-board increase in about eight years, and cabbies say it's essential to keep up with rising fuel costs, but New Yorkers still aren't happy. One Christopher Keating, 42, told Reuters:
"A 17 percent hike all at once is a little hard to swallow," Keating said. "They may deserve a raise, but it seems like it would make more sense in smaller increments, year to year."
C. Keating might check out a new report [PDF] from the Swiss bank UBS for some global perspective. On a list of cab fares in 72 cities around the world, New York fares in the middle of the pack. UBS calculates the price of a typical 3-mile cab ride in the city at $8.50. That's just above Dubai ($8.17) and just below Istanbul ($8.94). It's also considerably less than the other three American cities on the list: Chicago ($12.50), Miami ($15.32), and Los Angeles ($25.06). It's even less than the global average, which UBS puts at roughly $10.
Angelinos have a lot more reason to be sore. Their fare ranks third overall — losing out only to the Swiss cities at the top of the list: Zurich ($28.93) and Geneva ($27.78). Stockholm ($24.64), Oslo ($23.22), London ($23.03), and Tokyo ($21.42) are the only other places that top the twenty-dollar mark. A few others come pretty close: Luxembourg ($19.43), Munich ($18.04), Copenhagen ($17.33), and Vienna ($17.27). As a general rule, if you're in Europe, you're paying a lot for taxis.
At the other end of the spectrum is Cairo, where 3 miles in a cab costs you $1.49. Mumbai ($1.76), Delhi ($1.95), Sofia ($2.00), and Kuala Lumpur ($2.44) round out the bottom five. Bangkok ($2.47), Bogota ($2.81), Manila ($2.88), and Jakarta ($2.93) are the others below three bucks. Here's economist Tyler Cowen of the blog Marginal Revolution on low-fare cities from a couple years back, after the publication of a similar list:
… it fits with the Bela Balassa hypothesis about cheap services in low productivity countries, or at least those with low productivity laborers at the margin …
New Yorkers like C. Keating can at least rest assured that the recent fare hike will go to struggling cab drivers and not fleet owners. While the fare increased 17 percent, the rate of leasing cabs from medallion owners seems to have stayed about the same [PDF]. As taxi expert Bruce Schaller pointed out [PDF] many years back, fare increases do raise industry revenue, but not quite as much as the percentage fare increase itself. That means if cities raise lease rates as much as fares — well, they may be asking for another fare-hike debate sooner than their residents would like.