Saturday, March 13, 2010

Epic Fail: NYC Taxi and Limo Commission Fails To Catch Multimillion Dollar Ripoff

How did the NYC Taxi and Limousine Commission manage to miss a massive and pervasive problem such as cabbies routinely overcharging customers to the tune of millions of dollars in total? Well, they didn't have any means to figure out durations of trips until GPS units came along and were installed in yellow cabs.

It was a check of the GPS data against cab receipts when the scope and scale of the overcharges came to light - and even then the problem is probably even worse because the problems go back years to when the GPS units were not installed.
In a mind-boggling ripoff that went undetected for years, thousands of city cabbies overcharged nearly 2 million passengers by at least $8.3 million, according to a shocking disclosure yesterday by the Taxi & Limousine Commission.

Officials said 35,558 of the city's 48,300 taxi drivers -- or three-quarters of all the licensees -- were caught overcharging at least once by secretly changing the meter's rate setting.

A staggering 3,000 drivers swindled passengers more than 100 times each. A total of 1.9 million trips were overpriced.

The scale of the thievery over the last 26 months was flabbergasting even to hardened veterans of what is supposed to be a tightly regulated industry.

"Oh, my God!" exclaimed one taxi official.

"When I first heard one guy was doing this, I said there has to be more. But I really didn't expect this."

He was referring to Wasim Khalid Cheema, who lost his hack license earlier this month after authorities found he had cheated 574 passengers in just one month -- this past July -- by setting his meter to Rate Code 4, covering Westchester and Nassau counties, instead of Rate Code 1, the default setting for trips inside the five boroughs.

The suburban rate is double the in-city rate.

The remarkably simple scam netted Cheema an extra $40,000 over six months.

It came to light last year only after a suspicious passenger complained that a 12-minute trip from Manhattan to Queens cost $20.20, about double what she expected.

TLC officials then began comparing data from GPS devices in each cab with meter receipts and made the shocking discovery that the ripoffs were more rampant than anyone could have imagined.
It's little wonder that so many people have disdain for cabbies and fight the rate hikes.

The average overcharge per trip amounts to $4.45.

While cabbies are getting squeezed on fees and taxes plus fuel prices that hurt their bottom line, they cannot break the law to surreptitiously gain a few bucks per ride so that they can have more money at the end of the day.

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