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Department of Business and Industry, Taxicab Authority

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Key Issues Addressed by the Audit

•Long Hauling – taking a longer route than necessary.

•Medallion Allocations – managing the number of authorized taxicabs in service.

•Medallion Inventory – ensuring the medallions (small metal plates) are adequately tracked.

•Cash Receipts – controls need improvement.

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•Las Vegas Review-Journal April 2012

▫ “Long hauling is becoming truly epidemic,” said 14-year driver Stephen Lenett with Whittlesea Blue Cab/Henderson Taxi. People are coming up with more creative ways to take people on longer rides.”

▫ This leads to what’s known as “selling the tunnel,” or persuading passengers that the long way – via the tunnel and I-15 to the Strip – is faster than taking congested streets with long red lights.

▫ Most complaints dead-end because few tourists take the time and effort to go beyond an angry phone call and fill out formal paperwork.

Long-Hauling Problem in Las Vegas

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LCB Audit-Methodology

•Traveled to the 16 taxicab companies operating in Las Vegas.

•Selected 600 trip sheets used by drivers to record the trip destination, trip times, and metered fares.

•Using the trip sheets, identified and analyzed 2,730 trips to or from the airport and major Las Vegas hotels.

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LCB Audit-Results

Our testing identified potential long hauling for 614 of 2,730 (22.5%) trips to or from the airport. Based on the percent of long haul trips identified, we conservatively estimate airport passengers were overcharged $14.8 million in 2012.

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LCB Audit-Results (cont.)Direct and Potential Long Haul Routes Exhibit 7 McCarran Airport to a Major Resort

Direct Route Potential Long Haul Route

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LCB Audit-Results (cont.)

  Resort 1 Resort 2 Resort 3 Totals

Fare Charged Trips Percent Trips Percent Trips Percent Trips Percent

$12 - $18 23 25.3% 33 39.3% 76 52.8% 132 41.4%

$19 - $24 30 32.9% 16 19.0% 22 15.3% 68 21.3%

$25 - $30 33 36.3% 32 38.1% 39 27.0% 104 32.6%

$31 - $36 4 4.4% 3 3.6% 7 4.9% 14 4.4%

$37 - $42 1 1.1% 0 0.0% 0 0.0% 1 0.3%

Totals 91 100.0% 84 100.0% 144 100.0% 319 100.0%

Range of Fares Charged for Resorts in a Similar LocationTaxicab Authority’s Fare Estimates Between $16 and $18(1)

Exhibit 8

Source: Auditor analysis of driver’s trip sheets and the Taxicab Authority’s fare estimates.(1) The $18 estimated fare includes an airport fee of $1.80 and a 4-minute wait time fee.

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LCB Audit-Results (cont.)

One Driver’s Fares From the Exhibit 6Same Resort to the Airport Compared to Taxicab Authority Estimated Fare

Trip Fare Charged

Estimated Fare(1)

Difference

1 $17.30 $16.00 $1.30

2 $17.50 $16.00 $1.50

3 $16.70 $16.00 $0.70

4 $30.50 $16.00 $14.50

5 $29.30 $16.00 $13.30

6 $30.90 $16.00 $14.90

7 $29.90 $16.00 $13.90

8 $30.90 $16.00 $14.90

Source: Auditor review of trip sheets.(1) Estimated fare per Taxicab Authority based on 4-minute wait time fee.

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LCB Audit-Recommendation

Develop additional preventative measures to deter long hauling practices, including providing information to passengers that helps them prevent or immediately identify long hauling.

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Response to Audit-National News

• USA TODAY- “Audit: Las Vegas cabs overcharged $15M in airport rides”

• FORBES- “The Biggest Scam In Vegas May Be Your Taxi Ride”

• YAHOO FINANCE- “Audit: Vegas Taxis Overcharged $15M to Airport”

• NBC NEWS TRAVEL- “Audit: Vegas cabbies overcharged tourists $15 million in 2012”

• FOX NEWS- “Audit finds Las Vegas cab drivers overcharged tourists $15 million in 2012”

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Response to Audit-Local News

• LAS VEGAS REVIEW-JOURNAL - “Audit finds local cab drivers overcharged passengers $14.8 million last year”

• LAS VEGAS SUN -“Ever get the feeling the Las Vegas cab industry is long-hauling regulators?”

• MYNEWS3 - “Owners, drivers at odds over blame for long-hauling”

• VEGASINC- “Audit: Cabbies soaked passengers $14.8 million by long-hauling”

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Response to Audit-Local News (cont.)

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Response to Audit -Legislative Action

Senate Bill No. 430

•Enacted by Nevada Legislature June 7, 2013.

• Imposed a technology fee to develop computer systems that will help regulate taxicab trips.

•Trip data collected using global positioning systems including real-time data regarding taxicab trips.

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Response to Audit (cont.)-Legislative Action

Senate Bill No. 430 Requirements

Long Hauling – Requires development of a computer system that allows a passenger through an application on a mobile device or an interactive digital display screen or other onboard system in the taxicab to:

1. select the passengers desired route,2. select the shortest route by time or distance, and3. select the least expensive route.

In addition, the system must make a digital copy of passengers’ selected routes and be capable of assisting the Taxicab Authority in development of additional preventative measures to detect, investigate, and deter long hauling.

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Response to Audit (cont.)-Legislative Action

Senate Bill No. 430 Requirements (cont.)

Complaints – The system developed by the Taxicab Authority must be capable of allowing passengers to register comments and complaints with the Authority, the driver and company, through an application on a mobile device or an interactive digital display screen or other onboard system in the taxicab.

Medallions – Requires development of a computer system that digitally associates a taxicab with a medallion for the purpose of verifying the validity of the medallion. Furthermore, the system must be capable of providing the Taxicab Authority reliable, real-time and historical information concerning service demands, market data, vehicle usage, and wait times for use in making decisions concerning the allocation of medallions.

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Response to Audit- Local News Coverage of Agency Action

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Response to Audit-Agency Action

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Response to Audit-Agency Action (cont.)

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Contact Information

Rocky Cooper, CPAAudit Supervisorcooper@lcb.state.nv.us

Taxicab Authority AuditReport # LA 14-04http://www.leg.state.nv.us/audit