Are economics behind towing disparities in Minneapolis?

Economics may help explain why city contractors didn’t tow a single car from southwest Minneapolis during the year’s first snow emergency.

The city pays Rapid Recovery Inc. just $59 per vehicle to tow from that area. The towing companies that handle the other three corners of the city get paid more than twice as much for each car they bring in to the impound lot.

TOWzonesbordersnPricingSept2014 (3)

Rapid’s price is so much lower, because it is part of a larger $630,000 contract with the city for year-round towing.

Minneapolis encourages towing contractors to focus their efforts on areas closer to the centrally-located impound lot on Colfax Avenue North (in impound towing zone 3 on the map above).

“The tow contractors go where we tell them to go,” Deputy Public Works Director Heidi Hamilton said. “It’s not the tow truck drivers deciding to go where they’re going to make more money.”

But looking at the map of cars towed during the city’s first snow emergency, you have to wonder.

Day towed:
Day 1, SaturdayDay 2, SundayDay 3, Monday

Minneapolis Impound Lot indicated by the green arrow
Source: City of Minneapolis

While all the companies tend to cluster tows toward the edge of their territory closest to the impound lot, the trend is most pronounced in the southwest zone.

Minneapolis towing contracts are complicated. There are two major companies — Rapid and Wrecker Services, Inc. — that tow cars for the city year-round. Wrecker handles the north half of the city; Rapid has the south.

During snow emergencies, the city needs a lot more tow trucks on the road, so it carves up the map into six zones. Minneapolis assigns Wrecker the zone closest to the impound lot, and Rapid gets the southwest quadrant. Those companies are required to charge the same fee to the city they get the rest of the year.

Minneapolis bids the four other snow emergency zones out separately. Those companies get paid as much as $155 dollars per car — more than the impound lot charges owners to retrieve them.

Minneapolis obviously gets a much better deal from its major tow contractors, but is the price so good that it’s not worth Rapid’s time to haul in cars from the far corner of its territory?

The company has not returned several calls seeking comment.

Same issue comes up in St. Paul

St. Paul leaders have questioned whether its snow emergency tow contractors favor areas closest to its two impound lots, and an outside consultant is trying to help determine whether that’s the case.

The consultant may have his work cut out for him, though. Unlike Minneapolis, St. Paul doesn’t have a digital database showing the addresses where cars are towed from. Those addresses are recorded only on paper tickets, Public Works spokesman Kari Spreeman said.