OFT proposes quantity de-restriction of
taxis based on its premise of unmet
“latent demand”, which they define
as “ … the situation where consumers
in areas with quantity controls are
discouraged from using taxis by long
waiting times and so do (not?) even
bother to queue for a taxi.
This type of demand is hidden
because it does not present itself in
the form of long queues but it is
nonetheless an important source of unmet
demand” (So, how do those who choose
not to queue manage to get home in the
wee small hours?
this just nonsense?
By their own definition “latent
demand” is unquantifiable.
Isn’t this therefore subjective
rather than objective, and isn’t it
patently unprofessional to base this
report on such a spurious
This report is fundamentally
even if this “latent demand” did
exist, the economic theorists who
compiled the report have only sought to
resolve the problem through the supply
and not the demand side.
There is no demand analysis in
the report, nor could there be because
demand is inherently a local phenomenon,
a fact long recognised by LAs when
determining their individual taxi
So, isn’t this another glaring
fault of this report?
example, here in Edinburgh we have peak
periods on weekend nights.
They centre around 1 am when all
the pubs close and 3 am when all the
Any demand problem was increased
further when the Chief Constable was
instrumental in closing food take-away
shops at 3am, with the detrimental
affect of truncating demand for taxis
into a much shorter time frame than
previously. It wouldn’t matter if there were three times more taxis, it
would still not be possible for everyone
to get a taxi within 5 minutes, a prime
aim of this flawed report.
rather than only addressing the problem
of supply, demand could be managed
better to the benefit of consumers,
without the need for extra unnecessary
taxis which no one, apart from the OFT
and the “interests” it is responding
approach is to add so many taxis that
this “demand” is bound to be met - an unscientific sledgehammer to smash a non-existent nut.
The report claims that removing
quantity restrictions could increase the
number of taxis in affected areas by 30
their case studies they quote Sheffield
and Cambridge where de-restriction
increased taxi numbers.
Yet, in Figure 1 (below) we see
that, here in Edinburgh, we already have
a lower population to taxis ratio before
de-restriction(?) than the two case
studies have after it (A point CABforce
has already consistently been making to
our council). After de-restriction the position would worsen considerably
and increase further the excess of
supply over demand.
report also contends that removing
quantity restrictions and increasing the
number of licensed taxis will remove the
need for illegal taxis.
prime case of a de-restricted LA is
London which has over 20,000 licensed
Yet, more people use illegal
mini-cabs there than anywhere else. Last
year 200 women were sexually assaulted
in illegal mini-cabs (Source: - Public
Carriage Office web site).
Here in Edinburgh, with quantity
controls, such occasions are extremely
Yet, the OFT tells us we should
change to an obviously more dangerous
situation. Aren’t Councils, charged
with ensuring public safety, duty bound
to resist this nonsense?
report claims de-restricting will reduce
But the report doesn’t say
when, what time and where?
And there’s no proof that their
“one size fits all” policy will
resolve this in every individually
unique local demand situation for which
no demand analysis is contained in the
So, why change on this flawed
report says removing quantity
restrictions could put an extra 15,000
taxis on the road and increase
peoples’ choice of transport modes
when deciding how to reach their
Yet, it’s not even certain that
we could attract sufficient qualified
drivers, given the state of our job
market (particularly here in Edinburgh)
and the nature of the job.
Not everyone has the desire or
inclination to be a taxi driver.
The report recording up to 50%
more taxis after de-restriction could
represent a requirement here for more
than 400 extra drivers when we already
have a shortage.
report claims to promote best practice
in LA’s application of quality and
safety controls to meet consumer’s
these matters are not mutually inclusive
with quantity controls.
Irrespective of whichever
regulation is in force, if quantities
are increased to the point where earning
a living is difficult, the tension
between servicing income requirements
and maintaining vehicles will assuredly
result in attendance to the former at
the expense of the latter.
this may cause some vehicles to fail
safety regulations, but they’re only
likely to be caught at vehicle testing
time, usually only annually.
Given the choice between
repairing squealing, pulling brakes
demanding repair in the interests of
public safety, or putting food on the
table for the family, vehicle safety
will take second place.
Regrettably, this will not be
apparent between vehicle tests unless
through spot checks or an accident takes
place. Too late. Isn’t
this just another fundamental and
potentially dangerous flaw in the
argument for de-restricting quantities
which no amount of regulation will
if quality standards are to be afforded,
there will need to be substantial tariff
hikes to fund them.
Figure 2 shows the affect that
de-restricting taxi quantities could
Here in quantity controlled
Edinburgh, our tariff is considerably
lower than that of London and Sheffield.
Only Cambridge is ranked
marginally lower, but their tariff level
is somewhat false, having been set as
far back as Apr-01 and likely to be
subject shortly to an overdue
contend that it would be necessary to
substantially raise tariffs if quality
is to be afforded.
This will simply have the effect
of reducing local demand even further.
The experience of our last 15%
tariff hike, which dramatically reduced
bears this out.
report claims to protect people in
vulnerable situations from overcharging,
while encouraging the benefits of fare
betrays how little the authors truly
understand the nature of the business
they are reporting on.
Perhaps they should have
undertaken a busy weekend night shift
while researching this study.
be quite clear.
Substantially the vulnerable
people are the drivers who, single-handed, often have to deal with an alcohol fuelled
The report’s authors obviously
have no experience of being accosted, or
worse, by members of the public.
Nor can they appreciate what
it’s like having to defend yourself in
a court of law because of false
allegations by members of the public.
they suggest that fare tariffs should be
set to a legal maximum and consumers
encouraged to negotiate the fare down.
This is dangerous rubbish.
it the rigidity of the controlled fare
structure which injects discipline into
the transaction, from both driver’s
and consumer’s safety perspective? Experience indicates that, without it, the whole process
would descend into chaos, particularly
where there were OFT generated income
tensions caused by an over supply of
a drunk gets into a taxi, he knows he
will be charged at the same rate as
This is fair. Where journeys are pre-booked or in the event of a journey
ending up out of town then, even where
strict tariffs are set, there is an
opportunity to negotiate.
That is also fair.
But, within the city boundary,
every one works to the same tariff
- a level playing field.
consumers start wandering up and down
ranks in the dead of night then, on
safety grounds, they could be left
Experience shows that disgruntled
passengers are more likely to cause
difficulty at the drop off, or before.
Variable fares will only
encourage this and, given the poor
response times from a hard pressed
police force, will lead to further
potential danger for drivers having to
deal with these situations alone.
report compares fare competition with
other modes of transport.
We should remember that buses,
trains and planes etc all charge less
for fares booked early,
because supply can then be
planned to match demand.
Where passengers require to
travel at the last minute, they do so
according to availability, and higher
fares reflect the immediacy of their
This is normal and accepted
Taxi journeys commenced from
ranks fit into this scenario.
No one expects to turn up for any
other form of transport at the last
minute and negotiate a discount.
So isn’t it a fundamental flaw
of this report to propose this nonsense
report claims to protect consumers in
vulnerable situations from overcharging,
yet there is no evidence of any real
problem in this respect.
So, isn’t this just another
extravagant claim, included to add
weight to a flawed report?
every business or industry can
necessarily operate unrestricted in a
For example, since urban buses
were de-regulated we now have twice as
many buses, mostly travelling empty, all
chasing the same customers, adding to
congestion and pollution.
However, isn’t it truly galling
that this “free market” urban bus
service model, which the OFT proposes
for the taxi trade, only prevails
because it’s propped up by massive
route and fuel subsidies, none of which
will be available to a de-restricted
Is this what the consumer really
It’s simply not true that
de-restricting the quantity of taxis
will improve either service or safety to
Indeed, the report confirms that
the opposite is true.
200 assaults on women in London,
where taxis are already de-restricted,
the quantity, but maintaining quality
and safety regulations will not ensure
Personal needs will always
prevail where there is a financial
tension between the two, which is
difficult to police.
Tariffs would need to rise for
quality standards to be afforded.
This at a time when the report
admits that there has already been a dip
in trade over the last two years.
regulation where fares are set at a
maximum, with consumers encouraged to
negotiate, will assuredly lead to
tensions between drivers and passengers. In Edinburgh last year we had 113 complaints from a probable
20,000,000 taxi journeys.
Why should we adopt the proposals
in this report and jeopardise this good
OFT has been selective in its case
They could have quoted the
Bristol experience where the trade was
de-restricted in 1997.
Its success can be measured by
the fact that quantity restrictions were
re-imposed in 2002
- a lot of damage having been
done in the interim.
Or, they could have quoted the
Dublin de-regulation experience, where
taxis increased from 2700 to 8600.
Pre-de-restriction 85% of taxis
were double-shifted, now 99% are
single-shifted with 25% of drivers now
only working part-time. Only 11% of
taxis are now wheelchair accessible.
Earnings have dropped, drivers
are working longer hours in older
vehicles and the tariff has increased
An unmitigated vandalism of
Dublin’s taxi trade.
Doesn’t this clearly
demonstrate that this is not an
objective report, simply one
specifically designed to “sell” a
particular flawed economic theory?
is reprehensible that this report shows
such scant regard for those who have
invested and worked in the taxi trade
over many years.
This report nakedly sacrifices
their financial well-being on the altar
of theoretical economic dogma from an
organisation ignoring practical
experience of the day to day tensions
within the trade.
government has 120 days to respond to
this flawed report.
We urge them to bin it, as it
urge our Scottish Parliament to
substantially maintain the status quo,
allowing local councils to continue to
set the taxi policy which their
experience and local consultation shows
matches their own particular local
demands, and which enables them to meet
their statutory requirements to ensure
urge the Westminster Parliament to
consider the poor quality of this
fundamentally flawed report and take a
long hard look at the Office of Fair
Trading, and its leadership, in a full
Perhaps the OFT’s flawed
theories should be applied by setting up
OFT2 to bring competition to their
if this is the standard of report
affecting government policy making, it
doesn’t augur well for the quality of
based on such flawed thinking.
Shouldn’t such legislation be
reviewed as a matter of urgency?
trade IS its work force