Cabbies know laws of supply, demand |

Cabbies know laws of supply, demand

William Ferchland

Catching a taxi cab at South Shore on New Year’s Eve is difficult and expensive – sometimes drivers charge $15 a passenger instead of just one metered rate for a carload of people.

Drivers, who contract cabs from companies, get away with charging a flat rate because the new year brings with it a lesson in economics: the demand increases, the supply doesn’t change, resulting in price increases.

Alcohol mixed with tired, cold feet in the wake of tens of thousands of inebriated revelers who just want a ride home. And they’ll pay.

Cab drivers by law are limited to a fare set by commissions or local government. But sometimes that rule is disregarded by drivers.

“The motel industry, they do it every weekend,” said Tom Alvord, a dispatcher for Yellow Cab. “We do this just once a year and not all drivers do it.”

Joe Walton, with AAA Lake Tahoe Taxi, said such overcharging doesn’t exist.

“Everything is supply and demand,” Walton said. “What the market demands is a fair price. Other than that I have no comment.”

According to the Transportation Service Authority, which oversees regulation of cabs in Northern Nevada, such flat fees are illegal in the state.

“A flat rate is not allowed at all,” said Junene Cheek, administrative assistant for the Transportation Service Authority. “You have to stick to the (meter rate.) If you want to raise the rate, you need to officially do it through the agency.”

Yet the Transportation Service Authority, based in Sparks, does not have power over cab companies in California, such as Yellow Cab. In California, each municipality or county determines how it handles taxis.

The South Lake Tahoe Police Department oversees licenses, but authorities said they haven’t received any complaints of overcharging.

“I’ve never received a complaint about that,” said Lt. Terry Daniels. “It would be a clear violation of city ordinances. The rates are set per ordinance.”

Bob Albertazzi, community services officer with the police department, said if there were complaints of overcharging he’d question the driver. Results from the interview could lead to suspending the driver’s taxi license pending a hearing.

– E-mail William Ferchland at

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