subject: How Will I Know If I'm Going To Be Charged A Fuel Surcharge In A Taxi? [print this page] Just like every other type of business, taxi services have to decide how much to charge their customers based on a combination of their expectation of profit, and their current expenses. As a result, when those expenses shift, they have to come up with ways to raise their prices. If they did not do this, a rise in their expenses would results in a direct loss of profit for them, or their employees. Understanding this particular logic is key to understanding why and when a taxi company is going to charge a fuel surcharge.
One of the largest expenses that are faced by someone working in the taxi industry is their fuel. What many people don't realize that haven't worked in this type of work, is that it is the taxi drivers that are responsible for the costs of their own fuel. The gas that they use comes out of their day's wages. This is important to understand when looking at the issue of fuel surcharges.
When gas prices go up, it means that the amount which is spent by a taxi driver during any given work day is going to increase by quite a bit, due to the amount of fuel that they consume. Typically speaking, this doesn't have any bearing on whether or not they would be getting more customers, so they are essentially taking a pay cut for no other reason than energy economics which are far beyond their control. Because this is extremely unfair, taxi companies put into place a fuel surcharge.
Another thing that most people realize is that the fuel surcharge that is assessed in taxis never goes into the pockets of the companies themselves. This is money that goes directly to the drivers to offset the costs of rising gasoline. It is not an attempt by the company to make more money, but rather to ensure fair wages for their employees. The know that if they didn't levee fees like this, many drivers would quite as gas prices rose, because they would be making less and less money all the time.
You can expect to see a fuel surcharge placed on a taxi ride any time there is a sudden leap in gas prices. If prices stay high, the company will usually just raise their base rates. It is when prices spike suddenly that the surcharge is usually applied, so that the employee's salaries don't dip when that spike occurs.
