Taxi Service Plan - City and County of Honolulu

Table of ContentsTaxicab Service Plan ...................................................................................................................1Section 1. Current Use of Taxis to Provide TheHandi-Van Service................................................1Section2. Expanded Use of Taxis and Other Non-DedicatedProviders for TheHandi-Van Service..............................................................................................5Section 3. Establishment of a User-Side Taxi Subsidy Program...................................................10Table of FiguresFigure 1: Contractual Rate Structure for TheCab..............................................................................4Figure 2: Vendor Rates for Four Companies......................................................................................9Figure 3 Cost-Benefit Analysis of Subsidized Taxi Program............................................................17Taxicab Service PlanPage

Taxicab Service PlanBoth Honolulu’s Department of TransportationServices (DTS) and Oahu Transit Services, Inc.(OTS) have expressed an interest in expandingthe use of taxicabs for TheHandi-Van in order toimprove the cost-efficiency of TheHand-Van operations,as well as to increase the mobility options forTheHandi-Van customers (and potentially otherpersons requiring specialized transportation). Therationale and recommended action plans for suchare detailed in this Taxicab Service Plan.This Taxicab Service Plan is organized into threesections:• Section 1 discusses how taxis are currentlyused by OTS for TheHandi-Vanservice. The OTS procurement process isaddressed, including a discussion of thecontract that exists between OTS and itstaxi contractor, TheCab. Backgroundinformation on TheCab is provided,together with an assessment of TheCabservice that was presented in a previoustask.• Section 2 discusses how other transitagencies utilize taxis and other non-dedicatedservice providers in an integratedfashion to improve the overall cost-efficiencyof their ADA paratransit service,and how TheHandi-Van might specificallybenefit from these models. Includedin this discussion is the notion ofutilizing multiple providers; prospectiveresources of non-dedicated service arealso identified.• Section 3 focuses on the expanded use oftaxis in a supplementary, non-ADA usersidesubsidy taxi program. A numberof transit agencies across the U.S. haveimplemented such programs primarilyas a way to shift demand from theirADA paratransit services to a lower-costalternative service, while at the same timeproviding more mobility options fortheir ADA paratransit customers.Section 1.Current Use of Taxis toProvide TheHandi-Van ServiceOTS, the contractor responsible for the day-todaymanagement and operation of TheHandi-Van, currently contracts with TheCab to serve asmall portion of the ADA paratransit trips. Approximatelythree percent of TheHandi-Van’s totalADA paratransit trips are provided through thiscontract, or 24,617 trips in FY2005, at a cost ofapproximately $466,000. This represents a morethan 30% increase in taxi trips since FY2003, whiletotal TheHandi-Van ridership was essentially flatduring the same period. The unit cost per tripsfor vans was $23.40, versus the taxi cost per tripof $18.90, partly due to the shorter average taxitrip lengths.Trips assigned to TheCab by OTS include bothsubscription trips and demand trips. Over 90% ofthe ADA trips assigned to TheCab are ambulatoryand are served by approximately 90 designated taxidrivers. These are drivers who have been speciallytrained to provide this service. Only those whohave been associated with the company for at leastsix months are eligible to participate in the OTScontract. Training includes a two-hour orientationwith TheCab management, and OTS-providedsensitivity training.The remaining trips, taken by non-ambulatorycustomers of TheHandi-Van, are served on accessibletaxis. TheCab owns four accessible Ford

Honolulu Paratransit Service StudyWindstar minivans. All four vehicles are over fouryears old - all have significant maintenance issues.Consequently, it is not uncommon for one or moreof the vehicles to be unavailable. For example,during our site visit in August 2005, only two ofthe four taxis were available to provide TheHandi-Van service, and again in January 2006 one ofthe vehicles was out of service. In contrast to theregular taxis, which are operated by independentcontractors, these accessible taxis are operated bycompany employees. Initially, they were operatedas metered taxis. However, the meters havesince been removed, and they are now operatingas non-metered, for hire (hourly-rate) vehiclessubject to PUC regulations. Further, for OTS,they are no longer used in a non-dedicated role,but rather are assigned to dedicated runs. (Moreon this below.)Virtually all the trips that are assigned by OTS toTheCab are trips that the larger OTS vehicles cannoteasily reach because of the street configurationor other physical constraints. While it has beenreported that overflow trips, i.e., trips that cannotbe scheduled onto OTS’ dedicated fleet due tocapacity constraints, are also assigned to TheCab,we saw no evidence of this during our site visits.(This was also confirmed in interviews with OTS’schedulers and dispatchers.) That being said, taxisare utilized – upon occasion - by dispatchers onthe day of the trips for back-up duties. However,the OTS dispatchers have been instructed to keepthis to a minimum and to use their own fleet asmuch as possible. Accessible taxis are generallynot available for a back-up role as they have beenfully assigned to dedicated runs. Thus, the OTSdispatchers have no back-up taxi resources fornon-ambulatory trips.Until the summer of 2005, all trips – both ambulatoryand non-ambulatory – that fit the abovecriteria (narrow streets or occasionally as back-up)were assigned to TheCab, generally the night beforethe trips were to be taken. All of the ambulatorytrips were then dispatched onto the taxis operatedby the specially-trained drivers, while all the nonambulatorytrips were dispatched onto the accessibletaxis. TheCab’s manager reported to OTSthat the number of non-ambulatory trips assignedto TheCab was insufficient to cover the capitaland operating costs of the accessible taxis. Whiledispatching ambulatory trips to fill the holes mayhave helped address this problem, it was decidedinstead that these vehicles should be converted tonon-metered, hourly-rate dedicated runs. And,while this action did solve the issue of coveringcosts, it removed the accessible taxis from servingin a back-up role.Currently, OTS schedulers develop schedules forTheCab’s accessible vehicles (that are available)and identify other trips for assignment to regulartaxis, as noted above, on the day before the tripsare to be served. These driver manifests and list ofambulatory trips are faxed to TheCab during theevening. OTS dispatchers also call TheCab on theday of the trip for individual ambulatory trips incases where OTS vehicles (that are running late,for example) cannot serve the trip.TheCab is responsible for confirming the ride witheach customer before dispatching the trip to thedrivers. Riders pay the $2 fare or provide a couponto the driver, and sign a trip voucher that has beencompleted by the driver, detailing informationsuch as pick-up/drop-off times and addresses andthe meter charge. Taxi drivers submit to TheCaban invoice for the drop-charge plus the meter rate(“total trip cost”) minus the $2 fare. For example,Page

if the total cost of the trip is $20 and the driverhas been paid a $2 cash fare, they will receive $18minus a 5% administrative/handling fee chargedby the company for each trip. For this same $20trip, if the driver received a coupon that theyhave submitted with the voucher, they will bereimbursed $20 minus the 5% administrative fee.TheCab then invoices OTS for the full cost of thattrip minus the fare.For the accessible cab service, even though thedrivers are paid on an hourly basis, TheCab billsOTS the cost of the trip based on the odometer(there is no meter rate involved, since these arePUC-regulated vehicles). So, for example, for asix mile trip, the agreed upon rate is $19.25. The-Cab bills OTS $19.25 plus a $10 surcharge if thepassenger uses a wheelchair, which is the majorityof these trips.As mentioned above, the employee drivers ofTheCab’s dedicated runs are paid on an hourlybasis. Since TheCab is paying these employees onan hourly basis, it is in the company’s interest tokeep the cabs in revenue service for the duration ofthe drivers’ shift to the greatest extent possible.DTS regards the payments to TheCab as “out-ofpocket”expenses. Consequently, DTS staff hasdirected OTS to focus on assigning shorter trips toTheCab, to minimize the average “out-of-pocket”cost per trip.Taxi ServicesProcurement Process and ContractThe current contract with TheCab is an extensionof an earlier procurement process in which TheCabwas the only company to respond. Some of thenoteworthy features of the procurement processinclude:• The procurement document was not disseminatedto all relevant PUC-regulatedcompanies, even though the contractallows for the use of PUC-regulatedvehicles, and in fact a portion of the taxiservice is currently provided in this way.This is significant because most companiesthat have wheelchair accessiblevehicles have chosen to be PUC-regulatedrather than operate as taxis, as theyhave more control over the drivers thanthey would if they were independentoperators. The companies can developschedules and assign trips to the driverswithout allowing them the choice ofwhether to take the trips or not.• The solicitation indicated that preferencewould be given to companies that haveaccessible vehicles. While this ostensiblywas included as a means of expandingthe pool of accessible taxis on the island,it may have had the effect of discouragingother companies from bidding.• Although OTS was originally interestedin contracting with a single company inorder to simplify administrative procedures,management is reportedly moreopen to expanding the number of contractedcompanies.Taxicab Service PlanPage

Honolulu Paratransit Service StudyFigure 1:Contractual Rate Structure forTheCab2004 2005*Flag Drop Rate $2.25 $2.45Per mile charge (or fraction thereof)$2.40 $2.80No-Show Rate (City) $10.00 $10.00No-Show (Rural - beyond Pali,Wilson and H-3 Tunnels, WaimanoHome Road, Lunalilo HomeRoad)Accessible vehicle surcharge (pernon-ambulatory trip)Plus 4.166% general excise tax* Rate increased May 19, 2005$15.00 $20.00$10.00 $10.00Background Information on TheCabTheCab is the largest cab company in Hawaii, andhandles over 3,000 calls daily. TheCab essentiallyoperates as a dispatch service, contracting withover five hundred drivers (independent contractors)who mostly own their own vehicles, althoughsome of them lease vehicles from another company.Drivers all pay a monthly “stall rent”.TheCab’s service is highly automated. Since early2005 almost all dispatching has been conductedthrough DDS, which is fully based on GPS, reportedlysignificantly improving the cab’s responsetimes.Riders’ Assessment ofTheCab ServiceBefore considering the potential for expanded taxiservice, it is important to re-visit riders’ assessmentof the existing service provided by TheCab throughTheHand-Van program. One of the four focusgroups assembled for this study consisted of riderswho specifically use taxis for their paratransitservice. Some of the highlights from that groupinclude:Positives• Those riders who use the taxi regularlyare very satisfied with the service, whereasoccasional users are more likely toencounter problems.• Riders have reported that taxi service ismuch more reliable (on-time) since The-Cab switched to GPS-based dispatching• More riders complimented the driversthan commented negatively about them.• Most participants were receptive to theidea of expanded taxi service, and felt theproblems listed below can be addressedthrough better training.Negatives• Some of the non-ambulatory taxi ridersfeel like second class citizens, and indicatedthat the drivers are not friendly andrefuse to get out of their cabs to provideany assistance. (This issue has since beenaddressed by TheCab management whoindicated that they have directed theirdrivers to be more helpful).Page

Section 2.Expanded Use of Taxis andOther Non-Dedicated Providersfor TheHandi-Van ServiceAs the cost of ADA paratransit services continuesto rise, many systems around the country are increasinglyusing taxis and other providers of nondedicatedservice to improve the cost efficiency oftheir ADA paratransit service.As noted in Section 1, OTS is already making useof taxis. However, OTS is using taxis in a waythat does not necessarily contribute to improvingcost efficiency. As discussed, OTS is utilizingtaxis primarily to serve shorter trips that cannotbe served by larger vehicles, even though OTShas smaller vehicles available in its fleet. Only toa significantly lesser extent does OTS use taxis toprovide back-up services.In the course of working with other transit agenciesacross the U.S., and in our current TCRP researchproject (Project B-30), we have identified the waysin which transit agencies use taxis and other nondedicatedservice providers as a cost-efficient meansof providing a portion of their ADA paratransit service.Many of these transit agencies use taxi servicesto provide peak overflow trips, trips in low demandareas or times of the day, and long out-of-the-way(i.e., non-ridesharable) trips that would otherwiseadversely affect the productivity of their dedicatedfleets. In addition, several transit agencies use thesenon-dedicated services to more efficiently andswiftly respond to accidents and breakdowns; torespond to “no-shows” that suddenly materializeafter the dedicated vehicle has resumed its run; totransfer away trips on dedicated vehicles that arerunning late (in order to get that vehicle back onschedule); to handle seasonal or event fluctuationsin demand; to test whether or not the dedicatedfleet should be expanded; to more cost efficientlymeet the ADA’s zero denial requirement; and ingeneral to better match the dedicated run structureto the demand curve.The general approach taken by these systems is totry to maximize the productivity of their dedicatedfleet by ensuring that trips that do not positivelycontribute to a productive dedicated fleet get assignedto taxis and/or other non-dedicated serviceproviders.The bottom line is not the “out-of-pocket” expenseper trip, but the cost per trip of the entire system.The optimal service mix – or split – refers to thecombination of dedicated and non-dedicatedservice which results in the lowest system-widecost per trip. The optimal split of dedicated andnon-dedicated service varies greatly from system tosystem, based on a variety of factors, most notablythe comparative costs and availability of dedicatedversus non-dedicated service.Management at both DTS and OTS have expressedinterest in expanding the role of taxis in the currentprogram. OTS management has indicated thatthey believe that TheCab is currently unable to takeon more service. However, TheCab managementhas responded that this used to be the case duringlow-demand hours, but that it is no longer true. Infact independent drivers are increasingly interestedin becoming authorized to provide OTS contracttrips. Thus, we have willing purchasers of service, awilling vendor, willing drivers, and customers whoare generally pleased with taxi service.Some of the questions that need to be addressed inthe development of this plan are as follows:• Are there times of the day when peaksin ridership or low demand level wouldTaxicab Service PlanPage

Honolulu Paratransit Service Studymake taxi service more efficient than usingOTS vehicles?• Are there geographic patterns that wouldbe more effectively served using taxis?• Can expanded service be used to betteraddress medical return trips, trips thatare running late, or when a vehicle hasbroken down?• Instead of the current practice of overloadingOTS-operated runs, whichresults in late arrivals and missed trips,can TheCab (and possibly additional providersof non-dedicated service) providea sufficient amount of capacity to handlethe types of “target” trips mentionedabove?• What is the minimal amount of advancenotice that TheCab would need tohandle such trips (according to TheCabmanagement, they would be able torespond to all trips within the urbanizedparts of Oahu within 45 minutes of triprequest).• Given that a portion of the cost of operatingOTS vehicles is devoted to fixedcosts that need to be covered regardlessof whether vehicles are in operation ornot, will the additional costs of taxisremain advantageous when compared tothe marginal incremental costs requiredto operate the vans? A cost analysis isincluded in the final section.Times of DayAccording to the Ridership Analysis conducted inTask 3, there are strong peaks in demand between6am and 8am, and from 2pm to 3pm. These correspondclosely to many of the social service agencyprogram hours, and the potential for establishing aseparate subscription service to address this demandpattern will be addressed in Task 6. However, someof these trips are likely to be work/school trips thatwill not be part of the agency subscription service,and may well be served through added taxi service.Our analysis also indicates that while subscriptiontrips peak between 6am and 7am, demand tripspeak between 8am and 9am. The afternoon peakis largely due to subscription trips. Moreover, thereare strong indications that some of the afternoondemand is shifted to the 5pm time slot, partiallyas a result of reservation practices that may not becompliant with the ADA.Our time-of-day analysis for specific origin-destinationpairs indicated that “casual” trip demand isparticularly suppressed in the afternoon for tripswithin central Oahu and in the Honolulu/PearlCity/Salt Lake area. Taxi service would be wellsuited to providing these overflow peak demandtrips, particularly in the mid-afternoon whensurplus taxi service is more readily available andin this geographic area where most taxis are concentrated.Service to Low Demand Geographic AreasThe Ridership Analysis also provided valuableinformation about the geographic distribution oftrips, in particular the number of trips in outlyingareas that begin and end within a zone. Thesetrips are particularly expensive for TheHandi-Vanto provide if they do not allow for ride-sharing orif they require that a full or partial run needs to beadded. In general, if the cost of adding a partialrun to provide a trip is higher than the equivalentwould be to provide that trip on a taxi, OTSshould explore the possibility of referring the tripto taxis.Page

Medical Return TripsReturn trips from medical appointments oftenpresent a particular challenge to both paratransitproviders and to customers. Following are someof the reasons why medical return trips can be amajor concern :• Medical return trips are uniquely difficultfor customers to schedule, since thecustomer is at the mercy of the medicalprovider. Doctors may run late, requireadditional tests, send the patient to thepharmacy, etc. adding uncertainty to thereturn time.• To cope with an uncertain schedule,consumers will generally make a returntrip reservation for the “latest reasonable”time when they think they may be readyto go home. However, if the doctor isNOT running late, or the appointmentdoes not take as long as expected, a ridermay be expected to wait a long time untiltheir reservation time.• After a medical appointment, frailer ridersare especially vulnerable and wouldprefer not to wait for a scheduled ride.• Riders who do have a scheduled returntrip are often worried about missing theirride.The net effect of these concerns is that paratransitsystems, including TheHandi-Van, often have tosend a vehicle back a second time to pick someoneup because they weren’t ready at their initial returntrip time, thus impacting the productivity of theservice. Additionally, medical return trips are oftenassociated with greater numbers of missed trips andlate cancellations. The greater flexibility in responsetime usually available through taxi service makesthis an option that should be seriously consideredby OTS. Dispatchers would have even greaterflexibility if some of the taxis at their disposal wereaccessible.OverbookingCurrently, TheHandi-Van is booking more tripsthan their dedicated run structure can handle,with the regular and accessible taxis primarilyused to serve trips that larger vehicles cannot getto. The current practice at OTS has been to cramthese overflow trips into the run schedules. Theresult of this practice – later performance - isexacerbated by the current scheduling practice ofslot management. In comparison, other systemsthat utilize taxis in a more varied and strategicmanner as suggested above, also “overbook” butdo so knowing that they have the taxis there asa back-up. A good example of this is in LaVernein Southern California (near San Bernardino),where Pomona Valley Transportation Authority’s(PVTA) dedicated vehicle contractor (Laidlaw)can wait until 45 minutes before the trip pick-uptime to assign a trip to their taxi contractor. Upuntil that point, the schedulers and dispatchersare filling holes created by late cancellations withthese trips (thereby increasing the productivity ofthe dedicated fleet) before shifting the unassignedtrips to their taxi contractor. PVTA’s taxi contractoroperates 12 accessible taxis as part of its largerfleet of regular taxis. In LaVerne the optimal splitis 82%/18%, i.e., 82% of the trips are scheduledonto the dedicated fleet, while 18% are served bythe taxi company. More than one-fifth of the taxitrips require an accessible vehicle. This approachled to an eight percent increase in productivity inPVTA’s dedicated fleet, an increase in ridership(and mobility) in two low-demand areas of theirservice area, and most important, a decreased system-widecost per trip.Taxicab Service PlanPage

Honolulu Paratransit Service StudyFor PVTA operations, the average trip length onthe dedicated fleet is less than 3 miles per trip, whilethe average trip length on the taxi service is 6.9miles per trip. This reflects the Laidlaw schedulers’practice of assigning as many short trips as possibleto the dedicated vehicles. As a result, the productivityof the dedicated fleet is 3.92 trips per hour whilethe average cost per trip on the dedicated fleet is$12.65. In comparison, the average cost per tripon the taxi fleet is $17.56. Both contribute to asystem-wide cost per trip of $13.56. Given theseaverage costs, management could be tempted to directschedulers to assign more trips to the dedicatedfleet because of the lower cost per trip. However,PVTA has found that when loading the dedicatedfleet with even more trips, the overall system-widecost per trip increases.Recommendations:1. OTS should immediately transfer thetrips served by the accessible taxis to thesmaller vehicles in the OTS fleet, assumingthat these small vehicles can get tothe same venues that the accessible taxiscan.2.3.Direct TheCab to return the accessibletaxis to non-dedicated service, i.e. OTSshould refrain from providing threesteady runs that could otherwise beprovided by TheHandi-Van. However,to enable TheCab to cover costs, OTScould guarantee a certain number of tripsto these taxis per day, noting that they donot necessarily have to be non-ambulatorytrips.As OTS’ schedulers develop schedulesthat can realistically be adhered to bydrivers, and that more closely resemblethe requested ride time than the slotmanagement approach, those trips thatcannot be incorporated in these schedules(“overflow” trips) should be assigned4.5.6.7.8.to TheCab, rather than cause late/missedtrips in the dedicated runs.Explore certain areas and times, asindicated above, where the use of taxismay reflect a more cost-effective solutionto providing dedicated service, andscale down the number of dedicatedTheHandi-Van runs in those areas/times,accordingly.Analyze the current schedules andidentify trips that have a serious negativeimpact on the productivity of the dedicatedfleet. Explore how the runs couldbe restructured and deployed differentlyif these trips were assigned to TheCab.Work with TheCab to continue toexpand the number of “certified” andtrained taxi drivers for TheHandi-Vancontract.If TheCab is unable to deliver a sufficientnumber of drivers/vehicles, consider contractingwith another non-dedicated serviceprovider or providers. (See below.)At the next procurement, revise theRFP so that it allows multiple providerswho can be taxi providers and/or PUCregulatedproviders. Do not precludeprospective proposers because of lack ofaccessible vehicles.Cost AnalysisIn order to determine the potential cost savings, weused a software application (developed in the courseof the recently completed TCRP B-30 study) toidentify the optimal mix of dedicated and nondedicatedparatransit service for TheHandi-Van.Application of this model indicates that the optimalmix for TheHandi-Van would be for 20.8%of the trips to be assigned to non-dedicated (taxi)service, with the remaining 79.2% of the tripsPage

scheduled onto the regular OTS dedicated service.Cost savings from this approach are estimated atapproximately 3.8% of total operating cost of the“expanded” service suggested by the schedulinganalysis undertaken in Task 4.To more precisely determine cost savings an optimaltrip diversion, an examination of the potentialfor restructuring TheHandi-Van runs will benecessary. While this analysis is beyond the scopeof this study, we understand that OTS has alreadyinitiated an analysis of the potential for divertingexisting trips to TheCab service, known as “TestWorld”. This analysis should give an idea of thepotential savings in vehicle service hours that couldbe realized through an increased shift in trips toTheCab. Once this has been completed and thepotential for expanding the taxi portion of servicedelivery has been established, OTS can use thesenumbers to calculate a more realistic number forthe potential cost savings resulting from the taxiprogram.Figure 2: Vendor Rates for FourCompaniesCompany Flag drop-charge Cost/mile Other infoTheCab$2.45 $2.80HandiCabs $9,($10 - $25 if outsideurbanized area)Charley’sT r a d e w i n d sTransit Service$2.45 first 1/8 mile$2.40$0.35/ 1/8 mile,or $2.60/mile$9 $2Other Taxi/Van Company ResourcesThere are only two taxi companies in Oahu thathave more than one hundred vehicles, while mostof the others have less than a dozen vehicles in theirfleet. A number of other taxi and van operatorswere interviewed for this study. Following are somerelevant facts related to these companies:Charley’s Taxis, which used to be the largest onthe island, has downsized to approximately 200vehicles, but continues to provide service throughoutthe island, with a focus on the urbanized area.Charley’s reportedly provides very extensive drivertraining, including sensitivity training for servicecustomers with disabilities. Charley’s used toprovide service to OTS, but this ended with thecontract arrangement with TheCab.HandiCabs of the Pacific has a fleet of 32 accessiblevehicles, all of which are operated as PUCregulatedservice. Drivers have extensive disabilityrelated transportation, since three-quarters of theirservice is for contracted medical trips with stateand federal agencies.Tradewinds Transit service is a small company thatincludes three accessible minivans in their fleet.10 mile ride approx. $31, plus $10wheelchair surcharge10 mile ride works out to ~$33,does a lot of other premium typeservices (door-thru-door etc.)Group tripsdiscount$50/hour upto 6 wc px, 5ambulatory$35 - 40/hourTaxicab Service PlanPage

Honolulu Paratransit Service StudySection 3.Establishment of a User-SideTaxi Subsidy Program.The ConceptA number of large and mid-size transit agencies inthe country have established non-ADA user-sidetaxi subsidy programs specifically to supplementtheir ADA paratransit program. Typically, these areprograms that have the following characteristics:• The sponsoring agency (in this case, TheCity and County of Honolulu) or itsagent (OTS) provides vouchers to eligiblecustomers or to participating taxi companiesto cover all or part of a taxi ride.• The sponsoring agency also makes arrangementswith one or more taxi companiesto accept these vouchers.• Customers request trips either directlyfrom the taxi companies, or througha call-center that in turn forwards thetrip requests to the taxi company of thecustomer’s choosing.• With some programs, the voucher coversthe entire fare; in these programs, sponsorshave the choice of offering vouchersto eligible customer for free or selling thevouchers to the customers.• In other programs, the vouchers have aface value – these types of vouchers areoften called scrip; in these programs, thescrip is often sold to customers at a discountedrate, e.g., a $20.00 book of scriptickets might be sold for $10.00.• In some programs the voucher, againdistributed to either the customer or theparticipating taxi companies, covers onlya portion of the trip. In these programs,a customer might pay a base fare or entryfee - the voucher covers the rest of thefare up to a prescribed amount, and ifthe fare is more, the customer pays thebalance.• These programs are usually limitedin terms of service area (i.e., within amunicipality) and the number of trips acustomer may take within a prescribedperiod of time (e.g. 5 trips a week), especiallyin programs where there is no ceilingon the worth of the voucher and/orwhere the program budget is limited.• Upon service being delivered, the customerpays his/her share of the fare (ifany); the driver typically fills out thevoucher (as opposed to scrip, which he/she just collects) with details of the trip.The customer then signs the voucher,thereby acknowledging that the informationcompleted by the driver is correct.• The driver then turns in the voucher forthe cash equivalent of the trip, less farecollected. The taxi company then sendsan invoice, along with the vouchers asback-up, to the sponsoring transit agency.Sometimes, the company chargesan administrative fee to the sponsoringtransit agency.• The sponsoring transit agency then paysthe taxi company per the invoice, butalso may undertake some fraud controlactivities to ensure that the trips wereactually taken and that the length of thetrip was not exaggerated.User-side taxi subsidy programs have long beena cost-effective tool for municipalities to providedemand-response service to senior residents, thosewith disabilities, and others who might need specializedor demand-response service. With theadvent of ADA paratransit, several transit agencieshave utilized non-ADA user-side taxi subsidyprograms as a cost control strategy for their ADAPage 10

paratransit service, while at the same time broadeningthe mobility options available to their ADAparatransit customers.• Cost savings: Transit agencies set themaximum subsidy per voucher (trip) atless than the average cost per trip of theADA paratransit service. Thus, for eachtrip shifted from the higher-cost ADAparatransit service to the lower-cost taxisubsidy program, the sponsoring transitagency saves money.• More mobility options: Most ADAparatransit services, including TheHandi-Van, do not provide same-day service. Aminority do so on a space-available basis.The ADA regulations require that onlynext-day service be provided. Taxi subsidyprograms, on the other hand, utilizeregular taxis and are accessed the sameways a general public customer mightaccess a taxi. Service is available on asame-day, if not immediate basis, albeitat a potentially higher price.• While many of the programs involve taxicompanies that have regular taxis only,accessible taxis are becoming increasinglyprevalent. In fact, for many of theseprograms, the “testing” of accessible taxisin this program generated such a demandthat the taxi companies have found thepurchase of additional accessible taxis tobe a wise business strategy.• In some jurisdictions taxi departmentshave issued requirements for accessibletaxis, e.g. for every 20 taxi medallionsissued to a company, the company mustprovide an accessible taxi, although thiswould not be feasible in the Oahu contextdue to the “open entry” mode of thetaxi industry.In terms of the cost savings, one should considerthat a convenient same-day taxi service may gener-ate new, spur-of-the-moment trips that otherwisemight not have been taken on the ADA paratransitservice. This trend would generate additional coststo the transit agency that must be weighed againstthe savings from the shift of trips described above.Based on the experience of the transit agencies wecontacted, however, there has been a net savings tothe transit agency, i.e. the savings generated fromthe shift in trips has exceeded the total subsidy ofthese newly-generated trips.Case StudiesPrior to describing how such a program might beapplied to TheHandi-Van, we will examine theuser-side taxi subsidy programs that have been establishedby three large transit agencies in Denver,Houston, and Chicago. In all three cases, thesenon-ADA services were set up to supplement theirADA paratransit services, but are available only toADA paratransit-eligible customers. In these casestudies, we will describe both the positive elementsand challenges faced by these programs, and thendraw on the most positive and applicable elementsof these programs to develop recommendations forTheHandi-Van.Denver — Regional TransportationDistrict — access-A-CabThe Regional Transportation District (RTD) inDenver established the access-a-Cab service in1997 to address a high denial rate and to reducethe per trip cost of its ADA paratransit service,called access-a-Ride (a-a-R). The service is onlyavailable to a-a-R customers, but it is explicitlynon-ADA service.Until April 2002, customers would directly callthe four (now three) participating taxi companiesdirectly. Blank vouchers for the drivers to com-Taxicab Service PlanPage 11

Honolulu Paratransit Service Studyplete and for the passengers to sign were suppliedto taxi companies. The companies would alsoobtain confirmation numbers from RTD -- viaa computer link to RTD -- for each trip, so thatan audit trail was created that allowed for signedvouchers to be compared to the authorized trips.In addition, RTD set a daily ceiling on the numberof trips that the budget could accommodate (moreon this below), rendering access-a-Cab service a“first come, first served” service up until the dailybudget is reached.Passengers paid the flag drop of $2.00, which wasequivalent to the a-a-R fare. The Regional TransitDistrict (RTD) would cover up to the next $7.00of the fare - which at the taxi meter rate of $1.60per mile could get a customer a trip of up to 4.4miles in length - with passengers paying the portionof the fare over $9.00 (for longer trips). Hence,the maximum subsidy ceiling for the RTD was$7.00.For the RTD, this program produced some realsavings. RTD found that the trips that shifted toaccess-a-Cab were largely same-day shopping trips,and averaged 4.5 miles. According to RTD staff,almost all these trips would have been taken on a-a-R (with an advance reservation) i.e. very little “new,spur of the moment” trips have resulted from thisprogram. Thus, RTD was able to realize substantialsavings in operating subsidy (the average cost pera-a-R trip at the time was $33.00). In addition,the a-a-R denial rate fell from 10% to less than 1%,partially as a result of the taxi program.Meanwhile, the real benefits for customers whoutilize this service are (1) convenience – they geta direct ride when they’re ready (as opposed towhen a-a-R is ready), (2) longer reservation hours(a-a-C has longer reservations hours than a-a-R),and (3) comfort - they ride in a sedan as opposedto a van.A key challenge that RTD needed to address wasfraud, which resulted from bogus trips (collusionbetween rider and driver, or the driver on theirown) and inflated mileages. Indeed, RTD reportedthat 3 FTEs were required to monitor and auditthe service. In addition to cross-referencing theID numbers with the turned-in vouchers, theseemployees were directed to call 25% of the customersto see if they really took the trip, and whetherthe route taken was the most direct. Instances offraud were found every month.In addition, RTD found that one of the keys tosuccessful user-side taxi subsidy programs, and especiallyminimizing the incentive to commit fraud,was to make sure that the program was attractiveto drivers. Roughly translated, drivers should notearn less income than they would otherwise. Inthe initial program design, drivers did not feelfairly compensated due to the combined effect oflost tips, reportedly challenging customers, andshorter trips.To address these issues, RTD made some keychanges to the program design:1.2.Customers were directed to call the a-a-Rcall center to request an access-a-Ridetrip. Thus, RTD had a record of the request.(The call center call-takers loggedonto the access-a-Cab line ask the customerwhich company they would like toserve the trip, and that request is transferredelectronically to that company).RTD reset the reimbursement at a flat $7per trip (as opposed to “up to” $7.00) to(a) give the drivers more money and (b)circumvent the need for auditing mileage.Page 12

Because of these changes, the instances of frauddeclined. As a result, RTD was able to cut downthe number of FTEs involved in auditing fromthree to one. Post trip calls are still made, however,primarily to confirm that the trip was taken (asopposed to a no-show). About 25 calls are madedaily, representing about 15% of the daily trips.With centralized calling, RTD was also able tokeep better track of the number of daily requestsversus their daily budget. RTD established a dailybudget of $4,200, or 600 trip requests at $7.00 pertrip. While the number of requests in Denver hasaveraged only 160 trips per day, RTD reports thatit is important to have such a safeguard to ensurethat the program budget is not exceeded.One other change was recently made. With theincrease of flag drop charges for the two primaryparticipating taxi companies, the access-a-Cabbase fare was raised from $2.00 to $2.10 for onecompany and $2.50 for another company to matchthe new flag drops. This move further cementedthe concept that a-a-C is not an ADA paratransitservice, and ensured that the reimbursement todrivers remains competitive. Interestingly, whenthe fares were equal, the taxi company providingthe highest quality service received twice as manytrip requests. Now that the base fares are unequal,the ratio has flipped in favor of the lower-pricedoption.Yet another benefit to the customers and to thecommunity that has resulted from this program isthat one of the cab companies recently purchased20 accessible cabs.Houston – Metropolitan Transit Authority- METROLift Subsidy ProgramIn Houston, the Metropolitan Transit Authority’sparatransit service is called METROLift. The reservations,scheduling, and dispatching are handledby METROLift employees of the MTA. Servicedelivery is vested with two operational contractors,one of whom operates accessible vans, the other (ataxi company) sedans. Both operate as dedicatedfleets. Taxis are also used in non-dedicated modefor overflow trips and back-up purposes. METRO-Lift also has a user-side taxi subsidy program calledMETROLift Subsidy program (MSP).Like access-a-Cab in Denver, MSP was introducedin 1987. The impetus for the establishment of thisprogram was the disability community’s concernthat METROLift’s regular paratransit service wasunable to provide spontaneous travel. Under MSP,METROLift contracts with five taxi companies toprovide the MSP, and supplies them monthly witha limited number of blank vouchers, which in turnare supplied to the drivers.Customers are free to call any of the companiesfor service with one-hour advance notice. If avoucher is available (see below), and the customeris qualified, the trip is dispatched. The customerthen pays the first $1.00 of the fare, METRO paysthe next $8.00, and the customer pays the balanceof the fare in excess of $9.00.To address fraud, METROLIft issues each of thefive taxi companies a specific number of randomlygeneratedvoucher numbers per day that may beused during specific times of the day. Once thevouchers for a specific time slot are used up, customersare refused service and must call for thenext time slot. However, each rider is guaranteedTaxicab Service PlanPage 13

Honolulu Paratransit Service Studya ride home at any time if they receive a voucheron their origin trip.Because of the volume of trips that are associatedwith this program, and the competition that existswithin the Houston taxi industry, METROLift isgiven a 4% discount on their meter fare portion.METRO also provides a $2.00 premium to thecompanies for trips requiring wheelchair accessiblecabs to help cover the additional capital/operatingcosts of these vehicles.As is the case in Denver, customers tend to use MSPfor shorter trips: 3.5 miles on MSP compared to12.4 miles on METROLift.MSP has proved to be more successful than wasinitially anticipated. The FY04 average subsidyper trip was $6.80, compared to the maximumsubsidy for any MSP trip of $8.00. This comparesvery favorably to the $19.23 per trip subsidy forthe “regular” METROLift van and sedan contractservice (which includes all contractor costs exceptfor vehicle depreciation).Chicago - Chicago Transit Authority - TaxiAccess Program and Mobility Directbut customers are limited to using fourvouchers per day. Each voucher has a facevalue of $12.00, i.e. the vouchers may beused to pay for a taxi ride up to a meterfare of $12.00. The rider must pay themeter rate above $12.00. Vouchers arevalid for up to six months.The taxi drivers record the actual fare on the vouchers,and get reimbursed for the fare (up to $12.00,less the $1.75 that they keep). The taxi companiesthen submit the vouchers for full payment of fare(up to $12.00), plus a $2.50 handling charge, ofwhich $1.25 goes to the company and $1.25 tothe driver.• Mobility Direct – The second program,Mobility Direct, is used to providesubscription trips that are less than tenmiles in length, and where the ridersrequire minimal assistance. All MobilityDirect trips need to be pre-approved byCTA. Passengers pay $1.75, and the taxicompanies bill CTA a per trip rate basedon trip type and zone as follows:AmbulatoryNon-AmbulatoryZone 1 $10.40 $18.00Zone 2 $13.40 $21.40Chicago Transit Authority (CTA) has establishedtwo non-ADA subsidized taxi programs, whichnow exceed 500,000 annual trips, for persons whohave been certified as ADA paratransit eligible.• Taxi Access Program – CTA and theCity of Chicago operate the Taxi AccessProgram (TAP) within the city limits.Customers pay $1.75 for a taxi voucherthat can be purchased by mail or at theCTA offices and distribution centers($1.75 is equivalent to the fare for theCTA’s ADA paratransit service, calledSpecial Services). Up to 30 vouchersmay be purchased per week per person,Mobility Direct was started in 2003. The impetusfor the program was to do away with the vouchersfor frequent trips made via taxis. In addition, itwas felt that this would encourage more drivers toparticipate in the program. Mobility Direct hasnow been incorporated into TAP.TAP tripmaking has increased tremendously in thelast three years, from approximately 122,000 tripsin 2002 to 521,000 trips in 2004 (the latter figureincludes 131,000 Mobility Direct Trips). TheGeneral Manager of CTA’s Paratransit Operationsreports that the rapid increase in ridership was dueto four factors:Page 14

• Making vouchers available by mail.• Increasing the face value of the vouchersfrom $10.00 to $12.00• The City amended its taxi ordinance torequire all taxi drivers to participate inTAP (previously this was not required).• The City mandates that each taxi companyor affiliation must serve at least oneTAP trip per day in designated “underserved”areas.In Chicago, the FY04 cost per trip on CTA’s TAPwas $13.36, compared to $25.15 per trip for CTA’SSpecial Services. However, actual savings resultingfrom the program are hard to calculate because ofthe difficulty in determining which of these tripsis a shift from Special Services, and which reflectsa newly-generated trip.This is particularly true of the regular TAP trips,where riders can request same day trips up to fourtrips per day, at the same fare as the ADA paratransitprogram, without sharing the ride. In the case ofthe Mobility Direct program, CTA controls access,so the program has more opportunity to realize costsavings and reduce capacity constraints.Recommendations for TheHandi-VanBased on the experience at these and other systems,a supplementary taxi program has the potentialfor easing the capacity constraints at TheHandi-Van program while lowering overall per trip costs.However, DTS and OTS should benefit fromthe lessons that were learned at these long establishedprograms, particularly with regard to fraud,minimizing induced demand, safeguarding againstbudgetary constraints, spreading demand if supplyis limited, and ensuring that drivers do not receiveless compensation than they would otherwise.Some of the other obstacles that were not explicitlymentioned above but that would need to be addressedin Oahu include the following:• Independent drivers may not be willingto take the drug and alcohol test (notingthat this test is not required if riders havea choice between companies) or sensitivitytraining.• Vehicle quality is also often cited as aproblem.• On the island of Oahu, many taxi companiesare small and may not be ableto handle the administrative burden ofcontracting.With these considerations in mind, OTS shouldestablish a pilot supplementary taxi program forTheHandi-Van customers based on the recommendationslisted below. In Task 6, we will present asupplementary taxi program “add-on” for agency/subscription trips that should be implemented ata later stage.1.2.Administrative Responsibility – OTSshould take on the administrative role forthis program, since it would be consistentwith the organization’s mission ofoperating TheHandi-Van in the mostcost-efficient manner possible, while alsoexpanding mobility options for registrants.However, it will be important forOTS to take on a greater monitoring roleof the program than is presently the casewith TheCab contract.Fare Structure and Base Fare – The basicchoice in fare structure is whether toadopt scrip or vouchers. We recommendvouchers because they are simpler to use.The choice for the base fare is between(1) the ADA paratransit fare on TheHandi-Van;and (2) the flag-drop charge (asin Denver). On the one hand, the latterTaxicab Service PlanPage 15

7.8.Figure 3trips that are available on a “first come,first served” basis, up until the daily ceilingis reached. As with Houston, DTSmay also wish to stratify this daily ceilinginto hourly ceilings by vehicle type ifthe supply of regular and accessible taxiservice, respectively, is constrained.Auditing – An OTS staff person shouldrandomly call ten percent of taxi customersdaily to determine if they took theride, or up to 25 successful calls daily.This would also provide an opportunityto randomly ask riders if they would havetaken the same trip on TheHandi-Vanif the taxi program did not exist, whichcould be incorporated in the cost savingsanalysis.Monitoring – Performance measuresand an evaluation methodology shouldbe established before implementation tomeasure the cost-effectiveness of the program.Some of the measures that shouldbe included in the monitoring programinclude: total number of taxi trips; totalnumber shifted from TheHandi-Van(based on the daily telephone calls tocustomers); on-time performance; com-Diversion ofTheHandi-VanTrips to Taxis*Cost-Benefit Analysis of Subsidized Taxi ProgramTripsShiftedSavingsfromShiftedTripsInducedTaxi Trips**9.plaint ratio; average cost per trip; averagetrip length.Rider Guide – An educational programand rider guide should also be developedbefore the program is implemented.Taxi Subsidy Program Cost SavingsA key issue that must be considered in the implementationof the subsidized taxi program is thepotential cost savings. As a first step in this analysis,we have calculated the potential savings that canbe derived from a five or ten percent diversion ofTheHandi-Van trips to the taxi program. We havealso taken into account the possibility that the convenienceof same day taxi service will generate anequal or even greater number of new trips if thereis no imposed daily limit on the number of triprequests accepted. At a certain (“breakeven”) point,the savings from the diversion of TheHandi-Vantrips would equal the costs of the new taxi tripsthat would be induced. The table below providesan indication for two different scenarios of wherethat breakeven point lies, beyond which the costefficiencyof the Taxi Program may no longer beviable.Costs ofInducedTripsSavingsfrom TaxiProgram***Subsidized TaxiProgram Costs****5% 37,000 $492K 37,000 $367K $80K $734K5% 37,000 $492K 44,000 $440K$0(breakeven)$807K10% 73,000 $983K 73,000 $730K $180K $1,467K10% 73,000 $983K 92,000 $920K* As a percentage of TheHandi-Van trips$0(breakeven)$1,650K**These are new trips that would not have been taken on TheHandi-Van if the taxi program did not exist, and therefore represent additional costs.*** Assumes new administrative costs associated with managing the taxi subsidy program of $45K for smaller program (5% diversion) and $70Kfor larger program (10% diversion).**** Based on the $10 taxi subsidy and the combined effect of trips shifted from TheHandi-Van (representing savings) and new trip demand ontaxis (representing new costs)Taxicab Service PlanPage 17

Honolulu Paratransit Service StudyHighlights from this analysis are as follows:• If 5% of TheHandi-Van trips are divertedto taxis, and a similar number ofnew trips are generated, the total savingswould be about $80,000 (keeping inmind new administrative costs).• The breakeven point at which the savingsfrom the 5% trip diversion are eliminatedby the cost of all the new taxi tripsinduced is when approximately 37,000TheHandi-Van trips shift to taxis and44,000 taxi trips are added that wouldnot have otherwise been taken on The-Handi-Van. It would then no longer becost-effective to implement the program.• If 10% of TheHandi-Van trips are divertedto taxis, and a similar number ofnew trips are generated, the cost savingswould be about $180,000. However, if92,000 new trips were induced on thetaxi program, there would no longer becost savings from the program.Of course, in either scenario, if less new demandis induced, the savings would be greater, but giventhe presumed suppressed demand due to existingTheHandi-Van capacity constraints, we believeit is highly likely that many riders will choose totake advantage of the new service. Possible waysof controlling this demand would be to (a) increasethe fare on the taxis above TheHandi-Vanfare; (b) limit the number of vouchers available toindividuals; (c) limit the program to sub-sets ofthe registrants. Each of these options has tradeoffsassociated with it.Our recommended approach to controlling demandwould favor option (b) i.e. OTS shouldallocate a set number of daily or hourly trips thatwould be available through the call center, as theydo in Denver and Houston, respectively. Tripswould be available on a first come, first servedbasis, and when the daily or hourly trip allocationhas been reached, callers would be told that therewere no more taxi trips available.If as a result of this diversion (and the more strategicintegrated use of taxis as recommended inSection 2) the dedicated runs can be re-structuredto handle the remaining trips with fewer hours,there would be additional operational savings.While this analysis is beyond the scope of this study,OTS should conduct a variation of the previouslyreferred to Test World in which run restructuringis identified based on trips that would likely shiftto taxi service (as opposed to ones that are specificallyreferred by OTS to TheCab). Based on theexperience in other cities, these are likely to be shorttrips for shopping purposes or other “spur-of-themoment”situations.It should also be noted that the average triplength of the trips that remain on TheHandi-Vanwill likely increase. This is because the trips thatare likely to shift to the taxi subsidy program areshorter trips i.e. customers will likely use the programto take trips under 3.5 miles to avoid payingadditional cash for fares over $12.00. With theincrease in average trip length, the per trip unitcost of TheHandi-Van will likely increase as aresult; however, the overall cost of the combinedprograms will likely decrease, as long as the newtrips generated by the taxi subsidy program do notreach the break-even point.Once these recommendations have been reviewedby DTS and OTS management, we will incorporatemodifications and develop an Action Plan thatwill be included in the Final Report.Page 18