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Cartels good thing or bad one?
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Author:  Alex [ Mon Jan 12, 2004 8:07 pm ]
Post subject:  Cartels good thing or bad one?
On another thread it has been suggested that taxi operators getting together is a good thing, whilst others are suggesting it's not.

Firstly TDO must say that the legalities of having such agreements are doubtful to say the least, so maybe it would be a good idea if we imagined an area. :roll:

If an area had four main operators, and they agreed to divvy up the work equally, would it be good for the trade, or bad for it?

Would it be so bad, if those firms didn't have to pay fortunes for super-market free-phones, and under-cut each other for major accounts? In the end it's the drivers that pay. :(

However, as I said before, it's more than likely illegal. So do we want to operator an illegal cartel? Do we want it so the operators have full control over the drivers? Because it would make no-sense to leave one for another, as the work will not follow.

Would the operators, then gang up against any newcomer who wanted to start up?

And are we all being naive if we think these sort of things are not already widespread?

Alex
Author:  Sussex [ Mon Jan 12, 2004 11:02 pm ]
Post subject: 
Well it appears that some have already been caught out. :D

But I don't seem to remember reading this in PHM. :roll: :roll: :roll:

**********************************************************
OFT warns cab firms against price-fixing

PN 01/01 10 January 2001

Private hire taxi companies must not get together to set prices, the Office of Fair Trading warned today.

The move comes as the competition watchdog sent warning letters to members of the Bury Private Hire Association. It was reported that the members agreed to raise their fares to £1.60 for the first mile and £1.50 for each subsequent mile.

The OFT became aware of the alleged price-fixing from local newspaper stories and from a complaint. The Association is reported to have nine members.
Author:  Whatever Mick [ Tue Jan 13, 2004 2:10 am ]
Post subject: 
Cartels sound attractive believe me though they put firms out of buisness in the end.

They lead to sloppy complacency, it just takes a n enterprising upstart to open in Brighton and before you know it they will have cleaned up for next to nothing.

I bought into a firm that had monopoly, the complacency and shear arogance was breathtaking, they didnt have a clue how to compete.

fortunatly the wake up call came in time and we dont do badly, but I have seen firms wiped out.

Medigen with their backhanders (tom I got this from tv) have done untold damage round here, cartels are just as bad.

Michael
Author:  Guest [ Tue Jan 13, 2004 2:31 am ]
Post subject: 
It depends on how much of a mutual agreement there is. The area in which this particular subject has been mentioned has probably been slightly misunderstood.... the Joint Trade Committe. Ok... its Brighton. But I do not regard the JTC there as a Cartel.

There is no agreement to "divi" up the work as has been suggested. Where there is an (unwritten)agreement is that no one will go after any companies work causing a price war. However, if any contract is up for grabs at say the end of a contract then of course it is open to any company to bid for it based on provision of the service required etc. Or if of course a contract is terminated by the account holder for any reason of poor service etc.

A good example of this is the Social Services contract which has recently been advertised (as probably required) and is open to any company to bid for it. It is always a very lucrative account and from what I understand all the taxi companies have bid for it, so it is hardly "divid" up.

Another reason for a JTC good working relationship with the all the taxi companies is the sharing of information of bad account payers. And more importantly in my own personal view is keeping out the likes of Medigen. From some of the comments on the other thread about this subject I get the impression that some people on here would rather have Medigen operating within their respective towns then a well organised taxi JTC keeping medigen out.

It should also be noted that the JTC meetings are there for various reasons such as police matters for traffic and safety ect and there is usually a police rep in attendence. The meeting also has the Hackney Carriage Officer present as well. All meetings are minuted. With a copy of the minutes sent to each office and usually posted on the respective notice boards. So it is hardly a secret meeting for illegal purposes.

From what I understand any new taxi company would be welcomed to join but I understand that there has to be a minimum of cars on the fleet to qualify. Do not quote me on this but I believe the number may 10 vehicles which is not much when the other JTC members vehicle fleets range from about 80 to 200.

Regarding price fixing. I would say at a guess, a lot of cab companies are mixed fleet. Hack & Ph. Now, when the council have full control over fares for the hacks it would quite impossible to have different prices charged between the hacks and ph. Perhaps the council should have their tariff control only for hackney carriage street work and all other radio/pre-booked prices be left to competition.

Where possibly there could be price fixing would be between purely ph based companies.

So, some on here may think that the Brighton JTC is a cartel... I dont and I would look forward to any legal challange from any party to proove otherwise.

Sensible comments invited... no hidden agenda comments with grudges as before please. :wink: :lol: :lol:
Author:  Guest [ Tue Jan 13, 2004 2:32 am ]
Post subject: 
Above posted by Scanner... It wont accept me logging in for some reason
Author:  Dusty Bin [ Tue Jan 13, 2004 3:12 am ]
Post subject: 
Anonymous wrote:
There is no agreement to "divi" up the work as has been suggested. Where there is an (unwritten)agreement is that no one will go after any companies work causing a price war.


Sounds like a cartel to me.

Dusty :?
Author:  Dusty Bin [ Tue Jan 13, 2004 3:14 am ]
Post subject: 
Anonymous wrote:
Where possibly there could be price fixing would be between purely ph based companies.



If taxis agreed not to discount or to charge the same on out of town (ie unregulated) trips, then I daresay that would be a cartel.

Dusty
Author:  scanner [ Tue Jan 13, 2004 3:22 am ]
Post subject: 
Dusty Bin wrote:
Anonymous wrote:
There is no agreement to "divi" up the work as has been suggested. Where there is an (unwritten)agreement is that no one will go after any companies work causing a price war.


Sounds like a cartel to me.

Dusty :?

Well its a funny type of cartel thats pretty much open to scrutiny! I will wait until it is challanged legally to change my mind.
Author:  Dusty Bin [ Tue Jan 13, 2004 3:23 am ]
Post subject:  Re: Cartels good thing or bad one?
Alex wrote:
On another thread it has been suggested that taxi operators getting together is a good thing, whilst others are suggesting it's not.



Cartels are generally good for the participants, but bad for the public, which is why they are outlawed.

Since last year you can be jailed for operating a 'hardcore' cartel, so be warned.

Of course cartels have been around for ages, and Adam Smith summed up the position quite neatly:

'People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices'

Dusty
Author:  PaddingtonBill [ Tue Jan 13, 2004 3:42 am ]
Post subject: 
Pricing policy is a fine art,
to pitch yourself from your competitors, and do part,
our compeditors drop thier price.
to gain thier worth full slice.

we like to deliver service, seccond to none,
this meant thetroublesome customers were soon gone.
but we go for quality, aim for the best,
we see our compeditors carry all the rest.

they are all for setting a cartel if they could
we are not interested, who would?
if you talk around the room,
compeditors catch the strategy, then you face doom.

they aranged an exhibition the idea was sound.
but it was our name, that was passed all around.
we gained a few contracts within the week.
good ones that we did not have to seek.

Brighton will do as they will.
from thier idea I get no thrill.
we are not on our local JC
but in our cars seeking customers to be..
Author:  scanner [ Tue Jan 13, 2004 5:14 am ]
Post subject: 
Quote Dusty
"Since last year you can be jailed for operating a 'hardcore' cartel, so be warned."

Wow...thank you so graciously for the warning Dusty...not! : :

The Brighton Taxi Joint Trade Committe has been around for at least the last six years and I think that if it was doing anything wrong then something would have been done by now... I mean, its hardly a secret.

Good god... The JTC does not have a policy of fixing prices, fixing discounts etc. You will find that in some accounts a charge is actually made for the privilage of having an account. I also think you will find the roader prices are all different. All there is is just a code of conduct amoungst its members. There is still competition. There is still the striving for offering the best service to keep the contract. And if a contract is lost then its each member for themselves !

It is completely untrue that the work is "divid" up.

But I know you will still call it a cartel!!

Anyway .....Thank you... thank you.... for the "warning"!!!!!!
Author:  Sussex [ Tue Jan 13, 2004 8:52 am ]
Post subject: 
Anonymous wrote:
It depends on how much of a mutual agreement there is. The area in which this particular subject has been mentioned has probably been slightly misunderstood.... the Joint Trade Committe. Ok... its Brighton. But I do not regard the JTC there as a Cartel.


I would bet a thousand pounds to a penny, that these meetings aren't minuted. :wink:
Author:  Sussex [ Tue Jan 13, 2004 8:55 am ]
Post subject: 
scanner wrote:
Good god... The JTC does not have a policy of fixing prices, fixing discounts etc. You will find that in some accounts a charge is actually made for the privilage of having an account. I also think you will find the roader prices are all different. All there is is just a code of conduct amoungst its members. There is still competition. There is still the striving for offering the best service to keep the contract. And if a contract is lost then its each member for themselves !


I've just had a look at the five firms websites, that sent the letter into PHM, and all the prices to Gatwick, and all the prices to Heathrow are the same. Even the return prices are the same.

What a coincidence !! :roll: :roll: :roll:
Author:  Dusty Bin [ Tue Jan 13, 2004 2:11 pm ]
Post subject: 
scanner wrote:
Wow...thank you so graciously for the warning Dusty...not! : :



- the post was in reply to Alex's message, not yours, and was not directed towards yourself or any particular location, as you seem to be implying.

- there's nothing wrong with trade bodies or meetings per se, so the existance of your JTC is not indicative of a cartel, and I don't think I or anyone else suggested otherwise.

- however, if agreements are made to restrict competition then this will constitute a cartel, and your point about not going after other firms' work lest a price war is started would seem to indicate such an agreement. Likewise, what you said about Medigen would probably be categorised similarly.

- ask the OFT if you don't believe me.

Dusty
Author:  scanner [ Tue Jan 13, 2004 5:43 pm ]
Post subject: 
Sussex Man wrote:
scanner wrote:
Good god... The JTC does not have a policy of fixing prices, fixing discounts etc. You will find that in some accounts a charge is actually made for the privilage of having an account. I also think you will find the roader prices are all different. All there is is just a code of conduct amoungst its members. There is still competition. There is still the striving for offering the best service to keep the contract. And if a contract is lost then its each member for themselves !


I've just had a look at the five firms websites, that sent the letter into PHM, and all the prices to Gatwick, and all the prices to Heathrow are the same. Even the return prices are the same.

What a coincidence !! :roll: :roll: :roll:

Yes.. I can not argue with that at all except that on my firm the price is quoted as FROM 35 and FROM 80. The airport prices for Gatwick and Heathrow are the same. However, if you now take the time to actually phone up and ask the prices of all the other roaders such as Eastbourn Hastings anything over 25 miles you will find that they are all different.
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