Opinion: A view from Edinburgh on restricted numbers and an unmet demand survey.

(From the October 2005 edition of The Fair View.  For further comment on Edinburgh issues, please click here for the full publication)

A  report from Peter Lang, licensing officer, highlighted that the number of private hire operator's licences being issued was rising every month.  The Council also had a number of applications for taxi operators licence before them.

It being a statutory requirement in Scotland for the Council to issue licences unless it can prove  there is no significant unmet demand, the Council appointed Jacob consultancy to conduct a survey to establish this and any need for additional taxi operators licences to be issued.

Is the resulting report just  fundamentally flawed, or is it blatantly little more than a FIX?

The report concluded there was no significant unmet demand.  How could it possibly arrive at this conclusion?

Although triggered by rising Private Hire (PH) licences, it curiously failed to take account of this in the report.

Jacob also failed to address the issue of rising plate premiums, to nearly £45,000, and inflating taxi rentals, to almost £350 per week,  which have been used as indicators of increasing demand in surveys elsewhere in the UK.

The report used information given by the Council, which effectively paid £28K of our licence money for recycled information they already had.

Jacob's consultation with interested parties is spurious and unrepresentative.  They consulted with PH operators who, not surprisingly, stated they didn't want additional taxi licences issued.

But they failed to consult with non-licence owning taxi drivers who desire to operate their own taxis.  Why?  Were they given precise guidelines on who should be contacted?  Was this at the behest of a Council "engineering" precisely what   it wanted this report to say? Wasn't consultation restricted to the key interest groups currently exerting control of the trade in their own narrow interest?

The report's survey procedures and sampling are appalling.  Its minimal survey of ranks highlights such a poor public usage it serves only to amplify the report's poor quality.

On taxi usage, the report states that 7,750 jobs are booked through radio companies.  Had they bothered to ask those same companies, they would have discovered that over 45,000 jobs are booked with them - EACH WEEK.

Jacob then do their own sums and tell us that our trade, between phone, rank and street hails, undertakes around 100,000 jobs per week, 5 million per year.  This equates to a weekly 76 jobs per taxi, 38 per shift on a double shifted car.  At an average £5 per job, according to Jacob, we're all turning over £190 per week.  Factor in rentals and fuel and, according to Jacob, cabbies in Edinburgh are all shelling out money for the privilege of earning nothing.

This is nonsense, and amply shows that Jacob doesn't have a clue about our taxi trade - the report is rubbish!

For the record, experience suggests a figure for fare numbers in Edinburgh around 18 million per annum -. over three times greater than the "stab in the dark" in Jacob's "armchair" survey.  And without wasting £28K of our money.

Compounding the infamy of this report, its author Ian Millership, has "mysteriously" moved on.  Where?  Why?  Jacob were asked but they're not coming across with answers.  We demand that they should.  And, in the absence of Mr Millership, they're also ducking specific questions about the poor quality of their report.

Others tendering for the project quoted prices almost 5 times greater than Jacob.  But their costings were supported by pointing out how extensive the study would need to be to provide accurate information.  Was the report  awarded to Jacob at such low cost because they were never expected to fully evaluate the trade?  Were they given the outcome required by the Council and charged with simply justifying it?

Whatever this report claims, it is not the comprehensive analysis of Edinburgh's taxi trade we were led to believe it would be.  Neither has it authoritatively proven its case for there being no significant unmet demand - a conclusion it curiously reached despite  our Labour Council's continuing claim that the city's economy is burgeoning.

Or the obvious increased activity deriving from Scotland's Parliament?

Or the recovery and expansion of the tourist industry which has seen a mushrooming of available budget hotel beds in and around the city - a capacity which has allowed Edinburgh to develop as a major short break destination for stag and hen nights?

Or the increased activity which the Council is using to justify spending half a billion pounds (and rising - Ed.) on a tram system to transport the human product of this increased economic activity into and around our city?

Or the ever expanding private hire which is muscling in on our business, and eating us alive?

Given all this, our Labour Council expects us to believe the flawed Jacob report which states that our taxi trade alone is experiencing no increase in significant unmet demand?

It doesn't wash.  At best, it smacks of Council interference - at worst, corruption.

A robust and comprehensive study the Jacob report is not. It's "crackers"

So is the Labour controlled City of Edinburgh Council if it thinks we, and Sheriffs deciding cases for licence applications, are going to swallow this rubbish.

Having paid for this clearly contrived report from our licensing budget, shouldn't the Council be giving us our money back?

Free trade, free thinking?

3maxblack applied for taxi operator licences.  Their application is  being resisted by the Council which sought, and was granted, an extension to the statutory six month period allowed in Law for applications to be decided.  This despite it already having to hand sufficient information to reach a decision.

The trade is interested in why the company believed the licences should be granted to them.  Here,  Garry Thomson  explains, as responds to some of the concerns and questions some of the questions heard on the ranks.

Mr Thomson, I'm sitting on the rank on an average weeknight, there are 5 taxis in front and any number behind.   And you reckon we need more licensed taxis? Why?

There's been a cap on taxis of 1260 for the last three or four years.  So, on the face of it, this may appear true.  But, by the trade's way of thinking, capping numbers should mean more work.

During this time, the number of fares should have increased enormously due to the burgeoning Edinburgh economy which we're often told about by politicians.

The activity around the new Parliament, the Airport expansion and the recovery / expansion of the tourist sector should all have benefited us.  Increased business activity, rising house prices and increasing  population would all point to more work for the trade.

But, the stark reality is that, despite this, we're operating in a diminishing market, it's getting harder to earn the same as we did some years ago without working longer hours.

If that's the case, where's all this work going?

During this period there's been a huge increase in the Private Hire (PH) fleet which particularly targets the call market.  (not beyond nicking fares off the street either - ed.)  Next time you're sitting on an overloaded rank, count the number of private hire cars passing by engaged with passengers.  Their bearing licence plates allows us to do this, to be fully aware of their commercial activity.

There's also been a significant expansion in the local bus networks, both day and the expanded night service which has increased routes and moved to a half hour service.

We've also had to contend with the introduction of taxibuses which targeted lucrative hail and rank work to satellite areas such as Dunfermline.

Although It has recently been announced that this service failed to make a profit in its two years of operation and is to be withdrawn in November, the concept has been picked up by the Airport which will may have a detrimental affect on our trade.

How have PH achieved this?

By developing a niche and aggressively marketing into the call market, they've been able to provide a more flexible service by introducing 6-8 seater vehicles, allowing them to respond to customer needs from one up to groups of 8 passengers in a single trip.

Are you saying PH have an unfair advantage?

It's only the over regulation of the taxi market which makes it unfair.  Taxi numbers are restricted whereas PH are uncontrolled and can readily increase to meet new demand.

This flexibility allows them to respond to, and meet demand increases long before the taxi trade is even out of the starting blocks.  They're eating us alive.

All in all we've had to contend with our competitors ready availability, in the case of Stagecoach's taxibus and buses in general their ability to heavily subsidise non-profit making services as a "loss leader" and the benefits of  cheaper vehicle types and consequently lower servicing, repairs and other operational costs.

What can the taxi trade do about this?

Its long overdue for the taxi trade to demand a level playing field, to restructure and to understand customer needs fully and respond directly to them.

What do you mean by restructure?

We can't get away from it.  The trade needs to control itself, adapt and respond quickly to changing market conditions to deliver the quality of service which will ensure it is customers' preferred choice.

In order to achieve this, the fleet must expand to compete directly with PH and give better service and wider coverage throughout the whole licensing area with locally serviced ranks in the suburbs, traditionally the stronghold of PH.

Any increase in the fleet should be accompanied by measures to contain and reduce costs particularly servicing, repairs and vehicles which can only be achieved by relaxing restrictions of vehicle types and introducing real competition into the vehicle supply market.

Won't putting more taxis on just severely reduce the number of fares for me?

We've already experienced the effect of PH and buses expanding aggressively into the taxi call, hail & rank markets - reducing our market share.  This needs to be addressed.

However, increasing the number of taxis will not necessarily mean less work for individual drivers.

For example:

2 drivers per 1 taxi   = 2 shifts worked

2 drivers per 2 taxis = 2 shifts worked

Given this, even significantly expanding  the fleet by giving each driver his own taxi would not, of its own, necessarily increase the supply to the customer or reduce individual driver turnover.

The cost savings from more competitive alternative vehicle types, coupled with the competitive edge regained from PH will attract custom back to our trade and reap lower costs from an increased market share.  It should be noted that any delay in implementing this will only make the task more difficult, the outcome less certain.

They de-restricted numbers in Dublin, wasn't it a disaster?

Yes, it sure was.  Dublin opened the floodgates without replacing quantity controls with quality controls.   We're not proposing this should happen in Edinburgh.  As in London, which is de-restricted, we already have some quality controls in place.  We would like to see these significantly enhanced in order to raise standards further and ensure the highest quality of service for our customers.

Part of the trade taking control of its own affairs, like every other commercial sector, would be for it to establish and monitor its own professional standards using meaningful courses which offer truly transferable qualifications rather than the current weak three hour modules which are high on cost and low on relevant content.

For example, the Council is currently reassessing the training modules to include such "important" topics as "handling boxes".

We would prefer to see courses such as an assessment of a licence applicant's driving skills, under the auspices of an organisation such as the Institute of Advanced Drivers, along with instruction on driving skills associated with carrying passengers.

Another example could be the requirement for a formal First Aid course, again under the auspices of a reputable organisation such as St. Andrew's ambulance association.

Requiring a summative test, on passing a formal qualification would be earned that would also provide a truly transferable skill.

In this way, rather than the existing modules which require no summative test and are deliberately made easy as to offer no bar to entrance to our trade, our proposal would ensure a raising of standards and give the formal qualifications that would benefit the individual and prevent our trade being swamped by ill-skilled entrants as happened in Dublin.

Didn't the Jacobs report prove we don't need more taxis?

The Jacob report is fundamentally flawed.  The need for the report was triggered by a consistent increase in PH licences issued, evidence of a significant increase in unmet demand - the criterion laid down in legislation for the council to conduct a survey.

However, Jacob failed to confront all the contributing factors, being selective in what it reported on.  Curiously it ignored the consistent increase in PH, the expansion and changes at the airport and generally failed to understand the changes we all recognise have taken place in the market.

As shown elsewhere, it appears that the report consists primarily of information the council already had knowledge of and which has been recycled and fed back to it.

Given its "professional" standing, Jacob surely understands that it's not possible to conduct a robust and comprehensive survey without including all the contributing factors, the survey only as good as the questions being asked.

It's a matter of concern that £28,000 of our licence money has been paid for this report when it was  the council which supplied both the questions and, seemingly, the bulk of the answers.

It is disappointing that the single biggest failure of the Jacob report is in not identifying the reduction in our market share while many indicators showed that the market generally was expanding.

How can there be no significant unmet demand when the number of PH licences issued is increasing significantly - they've doubled over three years.  Project this forward another three years, and PH have doubled again,  will another council report still be claiming no significant unmet demand?

If this is not justification for increasing taxi numbers, whatever could be?

In the face of such illogical nonsense, I can't understand why the Council is dogmatically denying an appropriate level of taxis to satisfy known existing, and predictable future, demand.

Finally, while failing to consult self-employed non-plate holder taxi drivers, Jacob asked PH operators whether they would like to see an increase in the taxi fleet.  Unsurprisingly, the answer was a resounding NO.  Doesn't this speak volumes about the report's integrity?

Conveniently, the report's author, Ian Millership, has moved on and Jacob refuses to answer question about its deficiencies.  Why?

The taxi trade is already well represented, why should we listen to you?

Only vested interest groups, i.e. licence-plate holders, are currently represented.  The trade in general is not and has no powers of negotiation.

Consultation with the trade is controlled by the Council, and is seriously flawed, although it satisfies the needs of the trade's power brokers who are working to their own hidden agenda.

In practical terms, it takes the form of  the Council's Hire Car Licensing Consultation Group (HCLCG).  This "representative" body is not democratically elected and does not enforce standards of consultation and reporting back to the trade.  Operating in secret through closed meetings, matters are discussed and decisions are taken and, unknown to the trade in general until it is too late.

The first those who work in our trade know of any discussion and decision about the serious matters directly affect them, and their livelihoods, is generally when the minute of the previous meeting is published three months later prior to the next one.  Matters done and dusted.

This is intolerable and tantamount to a system of "regulatory capture", with Council assent, where the vested interest groups are allowed to operate as a cartel, irrespective of market conditions, and which ensures scarcity of licence plates.

Self-employed drivers are considered casual labour, an over supply of which increases rentals and drives up plate premiums.  Higher rentals in a slow market mean drivers having to work significantly longer hours just to stand still.

We propose replacing the wholly unsatisfactory HCLCG with a new organisation, democratically elected from the register of taxi operators and drivers, and funded from licence fees.

Its remit could be fully consulting members, reporting back to them, determining the direction of the trade through consultation and debate, conducting negotiations on the trade's behalf with the Council as Regulating Authority, and assisting with legal support for members in all aspects of their dealings with the Council through a separate contributory fund.

So, what angle are you working? What's in this for you?

The real question is what's in it for us? As things stand, we don't really have a trade we can call our own.  Unless the taxi trade in Edinburgh is prepared to change for the betterment of those currently excluded, we won't have one in the future either.  It'll be everyone for themselves, and they can only lose.

Then the gloves will be off.  Individuals will do whatever necessary to promote their own interests above the rest of the trade.  Dog eat dog, there will be no real winners.

For sure, the way the trade operates just now, the future doesn't need us.

How do you see the future?

In the next 5 years the bubble is going to burst for the taxi trade and the people in it.  Scotland is facing a demographic time bomb, the population is falling.  The Westminster government is "importing" approximately 180,000 immigrants each year, the effects of which are already being felt south of the border.

Traders are being driven out of business by the influx of labour from the new East European EU member countries. Indeed, the transport industry is already tapping into this cheap labour resource.  There's no reason to believe our taxi trade will be exempt from this influence.

De-restriction is certain to come to our taxi trade.  At the last count 238 local authorities have already de-restricted in the UK, 49 since the OFT report was published alone.  This leaves only around 105 still to do so.  With the case of TAXIFAST v Plymouth Council looking set to go all the way to the European Court, the forces for change are irresistible.

Coupled with the ready availability of cheap labour already mentioned, and the advances in technology, a precarious future is assured unless we take control of our own trade - unless we have in place the quality controls to avoid another "Dublin".

What effect will technology, have on the way taxi services are delivered to the customer?

We have to be aware that advances in technology are going to have a radical affect on the way our market will operate from now on.  For instance, Satellite Navigation is already being widely used.

Its comprehensive capability renders the topographical instruction and test redundant.  With limited knowledge, anyone can effectively get a customer from a to b.  This capability is already being used to encourage private hire to mushroom and erode our market share.  It demonstrates the vital importance of the quality control mechanism already mentioned.

Due to the availability of hand held computer technology the call, hail and rank markets will become indistinguishable.  Standard mobiles, smart phones and hand held computers - with their talk, text and email capability - will readily allow the user to conveniently summon a taxi without having to hail from the street, stand on taxi ranks or depend on an operator to receive the call.

As things stand, the danger is it's only a matter of time before multi-national conglomerates force this change upon us and dictate our conditions of employment.

So, where do you suggest we go from here?

It comes down to what I said before.  It's imperative that we who invest our labour and capital in our trade, take control of it.  There's no room for control by Council bureaucracy or by vested interests working to a hidden agenda.   We've got to urgently recognise the inevitability of de-restriction, take control and reshape our trade to meet the challenges ahead.

In short, it's the taxi trade's call.  Its choice.  It needs to decide collectively where we go from here?

A quality trade, providing a quality service? Or a trade struggling to make ends meet, forever at the whim of an overbearing Council protecting the hidden agenda of the cartel it leads?

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