From
http://www.scottaxifed.org/dereg.htm
Office of Fair Trading
As advised earlier, the OFT letter inviting the STF to submit their views on the possible removal of numerical control of taxi numbers was received on Tuesday 11 th February 2003, the day after our general meeting in Stirling. It is a great pity that this did not arrive 24 hours earlier as this would have given us the opportunity to discuss this with members and take on board their views in formulating a response.
As I hope you will appreciate given the time constraints, there was not an opportunity to seek your views therefore we had to respond on your behalf, a copy of our response is included, I trust this meets with your approval. You will note we used two reports from the NTDU Dublin with their consent, which we felt strengthened our submission.
Letter received
"The Office of Fair Trading (OFT) is conducting a study of the licensed taxis market within the UK. The final report will be published this forthcoming summer. At this stage the OFT is accepting comments and submissions from interested parties.
The investigation has been undertaken to look at the impact of existing regulations on the market for licensed taxis. It will examine how well the market is working for consumers. The study will compare experiences between local authority areas where regulations differ to help assess how regulations affect the overall service to passengers.
The Office would welcome a submission from the Scottish Taxi Federation that would communicate the views of the membership in relation to this study."
STF Submission
I refer to your letter dated 7 February 2003 and thank you for giving the Scottish Taxi Federation the opportunity to comment.
Although the report to be completed by the summer of 2003 will not immediately affect the taxi industry in Scotland (taxi licensing is devolved to the Scottish Parliament) it is still a matter of great concern that removal of control of numbers in England and Wales will ultimately lead to a similar situation north of the border in Scotland.
It is clear, not from your letter but from extracts taken from your website and from radio news broadcasts interviews given around September 2002, that the main thrust of the OFT investigation is to prove that consumers' interests are not best served by regulations which permit licensing authorities to restrict the number of taxi licences issued.
In our view removal of control of taxi licences will not solve the problem of supply meeting consumers' demand but will lead to:
1. A seriously increased risk to public safety.
2. An erosion of qualitative standards.
3. Higher fares.
4. An influx into the taxi trade of operatives who have other employment and who will use taxi driving to augment earnings and who will work at peak periods only, as currently happens in the de-regulated bus industry, leading to lack of service at non-peak periods.
5. Full time operatives working longer hours to try to maintain a reasonable level of income thereby posing a threat to other roads users.
6. A serious drop in revenue to current operators resulting in the lack of resources required to maintain vehicle standards. This also poses a risk to public safety.
7. The creation of a black economy with drivers moonlighting between several jobs.
The list is not exhaustive.
Our views are borne out by experience elsewhere. Removal of control of numbers practised in America as far back as the 1930's resulted in the opposite of the beneficial impacts which had been expected from taxi de-regulation. See US Department of Transportation Report published in 1983 (referred to in page 7 of the attached MSM Review of Taxi Fares for NTDU, November 2002).
Again in the 1980's cities across America such as Seattle, Phoenix, San Diego and Atlanta began a programme of de-regulation of the taxi industry. In an article published in the Transportation Law Journal 2000, Professor Paul Dempsey states that since 1983 some 21 American cities had deregulated the taxi industry and concludes that de-regulation failed to provide the anticipated consumer pricing and service benefits and that as a consequence most communities involved in de-regulation have since re-regulated their taxi industry. Professor Roger Teal, who has conducted several studies into taxi de-regulation in the USA, reached similar conclusions.
There are many examples to be found which demonstrate that removing numerical control does not best serve the public interest with perhaps the best example being on our own doorstep in Dublin, where de-regulation minus qualitative control has been proven to be among other things detrimental to public safety. Since de-regulation there have been numerous reported cases of rapes and drug abuse in the taxi trade. This was unknown prior to de-regulation. It is also true to say that a great many former operatives have now left the taxi industry, as it is no longer viable as a full time occupation.
The attached MSM Review of Taxi Fares for NTDU and Submission to the Office of Fair Trading explain in detail why de-regulation does not best serve consumers' interests. It is the view of the members of the Scottish Taxi Trade that to ensure consumer's interests are protected and that public safety is not compromised, regulation particularly in terms of control of numbers must be retained albeit with a legislative responsibility making it binding on licensing authorities to review taxi number requirements on a regular basis. We suggest this should be carried out at intervals of 2/3 years and should be delegated to an independent arbiter whose findings would be binding on both the licensing authority and on the taxi trade.
The OFT Acknowledgement
Thank you for your letter of the 27 February 2003 and the enclosed copies of the National Taxi Drivers Union submission and Market and Strategic Management review. This will be of much interest and indeed most informative to the Office of Fair Trading's (OFT'S) UK licensed taxis study team.
In your submission you say that "It is clear, not from your letter but from extracts taken from your website and from radio news broadcasts interviews given around September 2002, that the main thrust of the OFT investigation is to prove that consumers' interests are not best served by regulations which permit licensing authorities to restrict the number of taxi licenses issued". My understanding is that you feel that this will lead to deregulation, however John Vickers, the Director General of Fair Trading, said in the press release of 21 August 2002 that "This is a large and growing market, which is highly regulated. We want to see that regulation strikes the right balance..."
The OFT's recommendations in it's final report can include :-
• enforcement action by the OFT's competition and consumer regulation divisions
• a reference of the market to the Competition Commission
• recommendations that the Government considers changes in laws and regulations and to regulators, self-regulatory and other bodies to consider changes to their rules - the Government has agreed (in its White Paper 'Productivity and Enterprise: A World Class Competition Regime') to publish a written response within 90 days
• campaigns to promote consumer education and awareness
• a clean bill of health.
The Office has no preconceived ideas about regulation and deregulation, the findings that will be
published in summer 2003 will be based on the evidence collected during the course of the study.