cabbyman wrote:
There is no such thing as over supply or under supply.
There is no such thing as over demand or under demand.
In a FREELY operating market supply and demand will reach equilibrium.
And
cabbyman wrote:
Analyse your own area and those around you and come back and argue against me! But please, keep the arguments sensible and based on facts, not bar room dogma!
The main arguments in your post were based on the first three lines above, which you then expanded upon.
You also invited sensible replies, & asked those that did reply to firstly analysis their own (licensing) area & adjacent (licensing) areas too, presumably to put sensible arguments purely based on facts against your views, & you further asked that any arguments should be totally deficient of bar room dogma.
I will attempt to do that.
Your main arguments in the first three lines above are in fact wonderful economic theories of the free market & free enterprise, etc. But unfortunately that is just what they are; THEORIES!
The various dictionary definitions of the word theory are;
Theory (n) = Propositions that have yet to be proved.
Supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.
Denoting a mental scheme of something to be done.
You will notice from the first definition of the word theory (singular) the dictionary goes on to define it as Propositions (plural) ……….
So, this economic theory you have put to us is not just one proposition, but an indeterminate number of such propositions. And further, the thesaurus offers synonyms to describe your economic theory as a hypothesis, assumption & conjecture.
So, we can safely conclude that your economic theory on the free market (in the cab trade) amounts to unproven propositions, supposition, hypothesis, a system of ideas, assumptions, conjecture & mental schemes.
Now let’s just have a very quick look at some of these words used to define the word theory. We’ll start with hypothesis. And the dictionary definition is; the act of guessing. And supposition is; an uncertain belief. And assumption is; a thing that is accepted as true or as certain to happen, without proof. And finally conjecture is; an opinion or conclusion formed on the basis of incomplete information.
From that little lot it can safely be said that you want the cab trade to accept your economic theories of the free market even though they are a load of [edited by admin] [edited by admin] [edited by admin] [edited by admin] [edited by admin] [edited by admin] [edited by admin] [edited by admin]!!!
If you don’t believe what I have just written, look up free market on Wikipedia!!
Also, in a so called freely operated market in which supply & demand will reach equilibrium, why would it be necessary for the authorities to set HC fares or apply conditions on standards of vehicles as just two examples? Surely in a freely operated market there would be no need for these measures as the free market would reach equilibrium on these matters too. In a free market the driver with higher fares would not survive as passengers would choose vehicles charging lower fares, and the drivers with the oldest sheds on the road would find little business as passengers shunned those vehicle & these drivers would go to the wall too. The reality is that these issues will never be in the freely operated market domain, because authorities like to preach a freely operating market, but only on the points that suit them. A kind of ‘some freely operated market components are more equal than other freely operated market components.’
If you want a freely operated market then supply & demand theories need to be extended to fares too & with no intervention on any matters to do with our business. Then when the demand for cabs is weak a 3 mile journey might cost £5, but when the demand for cabs is unmet why shouldn’t the cabbie charge £25 for that same 3 mile journey? That’s supply & demand economic theory isn’t it? But oh no, we can’t do that. It’s OK to charge less when business is slack & the punter gets a very cheap ride in a nice £35k taxi, but when there is a dearth of cabs the cabbie should charge no more than the maximum that is allowed on the Table of Fares. Free markets, oh yes, but only in those areas of my business that an authority will allow. That’s not a free market, that’s a distortion of a free market weighted against the provider of the service.
Indeed, Wikipedia’s first sentence on the free market offers the following definition; a free market is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. That does not happen & will not happen in the cab trade. And a few sentences later the article goes on to say; free markets contrast sharply with controlled markets, in which governments directly or indirectly regulate prices or supplies, distorting market signals. And that is what is happening in the cab trade with authorities directly regulating prices. There will never be a free market in the cab trade, because of these facts.
Now let us look at this economic theory of the free market that you stated, more specifically its wording. ‘In a freely operating market, supply and demand will reach equilibrium’. Agreed; but it’s not a freely operating market. My last paragraph put paid to that. Equilibrium; now there’s a good word that economists just love, meaning a state of balance. By definition the meaning of these words imply a sense of precariousness. Will it over-balance, won’t it over-balance; will it won’t it maintain equilibrium? A situation of always questioning the state of being.
Up to now, I think I have been a good boy & adhered, I hope, to your request for reasoned debate. So would you now do a little experiment for me please? What I would like you to do is take your shoes & socks off & stand on one foot with the other foot that is off the ground placed in such a position that you attain maximum balance, in other words your body will be in a state of equilibrium (balance) whilst you are standing on one foot. In doing this you will have reached equilibrium. BUT, the question is can you maintain equilibrium?
Now stand there for 10 hours! And if you can’t do it, you will have fallen on your [edited by admin]. That is exactly what the cab trade will do with your ideas of a freely operated market where supply & demand will reach equilibrium; fall on its [edited by admin]. Because equilibrium & balance are such finite expressions of a state of being that does not last for long at all. A minute, an hour, a day & the equilibrium is no more, & you have to start again trying to attain equilibrium. So what is the point if the state of equilibrium or balance is not sustainable except for a very short period of time?
The free market is an economic philosophy, nothing else.
I am & have been a Hackney owner/drivers in Birmingham for the past 29 years, & before that I was a PH driver from 1973 until 1979, when I got my Hackney badge. I was doing PH work part-time before the LG (MP) Act 1976 came in & I remember using phone boxes to phone in for the next job. So you could say I have seen just a little of both trades & their development over the last 35 years. That being said, it does not make me better or worse qualified than any other forum member that wishes to contribute on this site. But experience is something that is only acquired by serving the time.
During my time as a Hackney driver, I have experienced the stop-go policies of Birmingham City Council on issuing HC plates. There were about 300 plates in Birmingham when I got my Hackney badge in 1979 & there are now about 1400. In the 1980’s & early 1990’s we had about 3 or 4 lots of plate issues & after each one limitation was brought in again. Those first few issues were not too bad at all, because there was a steady influx of HCV albeit in a stop-go fashion over that period. Each block of plate issues was followed by limitation on numbers & as people became more affluent they used taxis more often. Then as trade grew in a relatively organised manner, (because of these blocks of plate issues as opposed to wholesale de-regulation) and the volume of passengers became steadily more, the trade became more & more sustained on a solid foundation. Then another block of plates would be issued by the council & the above process would repeat itself again.
In 1996 there were fewer than 750 HCV licences in Birmingham & that year we were de-regulated, with a policy of new HCV licence must have a brand new HC vehicle. The trade at the time thought that things would not be too bad because of the policy of brand new vehicles for new every new HCV licence. How wrong we were!!!
Birmingham now has about 1400 HCs & de-regulation has brought an aging fleet of HCs because proprietors cannot afford to up-grade any more. There are also 5,300 PHV & they also have an aging fleet that is worse than the cab trade’s. Drivers are working truly excessive hours; 80-100 hour a week for full time drivers is not unusual. And out of those hour a driver is lucky to have hirings for 35% of the time. A totally underutilised fleet of 6,700 Hire & Reward vehicles standing around for about 60 hour a week doing nothing. Average annual mileages of Birmingham Hire & Reward vehicles quoted in our recent Taxi Demand Study Report are just 30,000 mile per annum compared with a national average of 60,000 miles per annum. In both HC & PH, there is a reduction in full-time working & an increase in part-time working with higher rates of work-force turnover & a less professional service to the customer.
There is over-ranking almost everywhere in the city at most times in a 24 hour day. The situation has now become so bad, that members of the Birmingham & Solihull Taxi Association who work at Birmingham Airport have been instructed by the Association that they MUST take one day a week off from working the airport, because there are too many cabs there, with massive over-ranking, causing traffic congestion & complaints from airport authorities. And your day off from the airport rank must be a weekday. So, we in Birmingham now have work rationing at Birmingham Airport. That’s de-regulation for you!!
Coventry, which two or three years ago had 99 Hackneys de-restricted & now has 657 Hackney as at April this year; their drivers are working excessive hour & finding that a living is no longer to be made. Solihull de-restricted in 2004/5 & the fleet has more than trebled to just below 300. This has also affected Birmingham as Solihull cabs are now pushing out Birmingham drivers who have worked the airport for decades & are now having to work in the city. (Both Birmingham & Solihull Hackneys are allowed to work at Birmingham Airport on an equal footing). The numbers of drivers at Birmingham International Station (Solihull LA) has had to be restricted (by Rail Authority) because of over-supply & over-ranking, causing traffic congestion at the station.
These are the results of a distorted free market that is thrust upon us in the cab trade, with only those elements of a free market’s components that the council/government perceive should be allow within our trade available to us. The remaining components of a free market are controlled by outside bodies, unavailable to the trade & outside our jurisdiction.
Now for some extracts from OFT956; this came out in October 2007 & gives a general appraisal of the state of play in the HC trade since OFT676 was published in 2003.
In LAs that de-restricted driver waiting times increased by 77% compared to restricted LAs.
The loss in productive efficiency in the HC trade due to de-regulation has cost up to £31m per annum.
In LAs that have de-regulated the average reduction in passenger waiting times for rank hirings was 7.8 seconds, whereas the average increase in driver waiting times for hirings from taxi ranks was 5 minutes & 13 seconds; (Comment; a further example of loss of productive efficiency in de-regulated LAs).
According to stakeholders, turnover of drivers in the taxi and PHV industry is 'massive': turnover of PHV drivers is approximately 40 per cent per year and due to the existence of higher barriers to entry in the taxi market (quantity restrictions, the Knowledge, etc.), turnover for taxi drivers is lower and between 8 and 10 per cent per year. (Comment; this is detrimental to establishing & maintaining a professional driver service).
The view among stakeholders interviewed that drivers have had to work longer hours for lower income since taxi de-restriction was nearly unanimous. Estimates vary, but stakeholders suggest that on average a driver previously working 35-45 hour weeks now must work 50-60 hour weeks to earn the same income. The suggestion that drivers have to work longer hours is consistent with our findings on driver waiting time at taxi ranks.
And then OFT956 goes on to state in paragraph 6.40; The nature of the street and rank hiring segment involves externalities which affect consumers and which justify some continuing regulation.
By which I understand that there is now a consensus appearing from the OFT that there may be justification for some continuing regulation.
I have answered your questions!
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