Taxi Driver Online

I agree they do know about it but seem convinced no change ?
I think anyone who pays this sort of money must be mad.
Especially in the present uncertain climate OFT etc.

If there's to be a further period of uncertainty following the report (ie if there's no clean bill of health) the hopefully all new transferrees will be made aware of the facts surrounding this uncertainty.

Surely the Govt and/or the competition authorities have powers to make this compulsory, without too much rigmarole.

Dusty

Dusty,
the oft is a buisness body not a department of social services, these people who bought licenses like me, are big boys and girls and took a calculated risk.

dont worry about them, worry about the taxi cartels wimpering and moaning and going for every once of sympathy they can get.

I wanted so much from this report but mark my words as we speak now treachery is lurking.

Wharfie

Well I disagree Wharfy - they are supposed to be the Office of FAIR trading.

For fair trade people have to have perfect information, in economic terms - in other words people have to 'know the score'.

Trouble is, most don't - they don't know exactly what they're buying, and they don't know what's going on. Look at the Scottish Taxi Federation, for example, putting it about that the OFT investigation didn't apply to Scotland.

To me it's like aspects of the pensions misselling scandal - people don't really know what they're buying, and the sellers are often laughing all the way to the bank.

Consumers are often given extra protection in markets where they could be exploited - they are given a cooling off period, or are warned that the value of their investment could go up and down.

Buyers of taxi plates don't have any of this - indeed, it's more of a grey market, or even a black one, where the normal rules don't apply.

I suspect that the OFT will take a dim view of the market in plates, both in terms of the policies that create them, and also with regard to the uncertainty surrouding their purchase and sale.

Dusty

Well I work in it, and take a dim view. So how those outside, who's job it is to impose fairness will view it, goodness only knows.

So please Mr OFT, put us out of our misery !!!!!

It does go to proove what I have always said premiums get in the way of running a srategic system, people get realy bothered about the premium payers, as such no change can take place ever.

its a thorney one only change we can hope for is if the issue is rightly and fairly disregarded.

Wharfie

I'm not sure if we're at cross purposes here Wharfy, but the point I was trying to make (as per another recent thread) is that when de-limitiation happens (!) then the longer plate purchasers have had the plate the better, but this length of time will be shortened unless purchasers are fully aware of the facts at an early date in the future.

In my opinion this simply isn't the case as things stand, so if purchasers could be made aware of the facts as soon as possible then that's for the best.

If they are made fully aware of the facts surrounding the uncertainty, then if any have gone ahead and purchased a plate they can be deemed to have been fully aware of the risk and just 'taken a punt'.

But at the moment I don't think that all are fully conversant with the facts, and to that extent it's an unfair market.

Dusty

I couldn't agree more with you wharfie.

Where I work the council has just issued a lot of plates. A lot of huffing and a puffing took place over that issue from the lads on the rank including me for a bit.

My mate who helps out with the ph union says that of all the dozens of council meeting he goes too (bit of an anorak) the only time he saw anyone from the local hc union at one, was when they discussed these new plates.

The reason that plates are going through the roof in Manchester is because one of the criteria is length of service. Our Asian colleagues can not see themselves waiting forever to move up the list so they are "buying in" at every opportunity. Market forces as such has nothing to do with it.
With the Office of Fair Trading being what they are I cannot see them being in a position to advise beforehand of likely changes. They cannot intervene proactively in transactions, only retrospectively after the event.
Anyway plates are not sold ,the licence is transferred and according to our chums at the Inland Revenue it is the goodwill we are stumping up for.
This can never be quantifiable year on year so who will decide what is "fair" and what is not. Who could have factored in the huge downturn in the trade after Sept.11th and more recently the war in Iraq. Caveat emptor applies in all walks of life so why should anybody that borrows in excess of £40,000 without due diligence be protected by the OFT?
Ged

Yes it's strange that the Inland Revenue class this as goodwill, especially when the judge in the Wirral case said that it wasn't.

However, I wonder how many drivers declare the amount they got for their goodwill, to that tax man?

Ged,

one flaw in your presumption, Asians do not borrow money, its againt thier faith, and the premium isnt it paid in neat bundles of cash in carrier bags?

the same round here I have had visits 5 times this year.

Wharfie

hahahahaeheheheh, what a laugh, I dont believe you wonder at all!

Wharfie

Well I don't think that anyone will be protected if de-limitation occurs Ged, whoever holds the plate at the time will be left with a worthless asset, and perhaps a loan to service.

However, I think de-limitation will be less fair on those who have had a plate for only a short period and will thus be less able to service any loan.

The point is that I feel that if everyone was as aware of what's going on as we on here are then they would be less likely to buy a plate or buy it at a lower price.

Therefore if de-limitation happens in three years time (say) then the fairest outcome will have been achievable.

So basically, the more information people have about the possibility of de-limitation the better. Once the OFT report I feel that a lot more people will become aware of the uncertainty, so the any de-limitation will be fairer to the extent that both sellers and buyers are fully aware of the facts.

I don't know if OFT could in some way make it compulsory for everyone to know what's going, but I'm quite sure that they could recommend to councils that they ensure any purchaser between the report and any de-limitation knows what might happen.

The kind of thing that would strike me as being unfair is someone who has held a plate for 10 years, has seen it double in value, has made handsome profits over the ten years, and dumps the plate one someone at full market value who hasn't a clue about OFT and clause 1.147c or even that plates could be rendered worthless just by a council changine policies.

Yes, caveat emptor, but I just think that a lot of people buying plates just don't know what they are getting into, and I have a feeling that the market in plates evident in some places is indicative of this - which one of use would buy a plate now at a value higher than a couple of years ago??

Despite caveot emptor, the OFT and similar bodies recognise that consumers need protection in certain markets, and perhaps they will recognise some of the difficulties in the plate market.

But we shall see.

Dusty

I think the Inland Revenue are just categorising it as such for tax purposes, whereas Sir Christopher Bellamy in the Wirral case was talking about its economic nature.

If you make a profit on buying and selling a plate then you pay Capital Gains Tax on it, as you would with goodwill, and it's similar to goodwill from that angle because there's no underlying asset being bought and sold (ignoring the vehicle that it's transferred with).

However, from the economic point of view, the plate premium depends entirely on the closed market in plates, and would thus disappear if the area was opened up, and this wouldn't happen with goodwill in the economic sense.

If a small taxi firm in an unrestricted area had 5 cars worth £30k in total, a computer system worth £5k, and furniture etc worth £5k, and the business was sold for £100k, then the £60k above the value of the assets is the goodwill. Real goodwill, that is!

Dusty

I saw an Inland Revenue doc somewhere some time ago, that suggested the goodwill of a taxi company, as a rule of thumb, was two and a half times its net annual profit.

Thus, if the firm (plate) made £20,000 a year profit, the plate/firm would be worth £50,000 as goodwill plus assets less liabilities.

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There is Significant Unmet Demand for my Opinion.