CEC’s restriction Policy
City of Edinburgh Council (CEC) operates a policy of restriction – over 74% of UK local authorities allow the market to set supply levels, Aberdeen recently and West Lothian the latest being the latest to delimit numbers and free up the market.
The council’s restriction policy is founded on it protecting its own vested interest as a public transport provider – it has increased its own day service fleet, expanded its night bus services, and set up and expanded its own “taxibus” airport shuttle service operating like, competing directly with and duplicating the taxi service – and protect trade vested interests.
(Note:- all matters concerning the trade are discussed and implemented through CEC’s Hire Car Licensing Consultation Group which meets in secret and whose minutes are not published for 3 months.)
CEC Licensing Practices
No licences have been issued since 2002 based on demand . The council has refused around 50 licence applications since 2005.
(Note:- 6 licences were issued as a result of court action being settled in the High Court, the applicants winning because CEC played fast and loose with application procedures. CEC is currently locked in legal battles in respect of outstanding licence applications.)
Around 100 individuals have waited on the council’s list of interested parties for nearly 17 years without being granted a licence.
The Civic Government (Scotland) Act 1982 (CGSA) prohibits the transfer of licences. CEC allows licences to be transferred through “Incorporation”. Although CEC claims licences have “No intrinsic value” they are being traded at up to £50,000.
Since 1982 the lesser regulated private hire have risen from a few wedding cars to a fleet of around 1000 “pseudo” taxis.
CEC commissions “independent” studies to justify its policy of restriction. These studies are flawed and have ignored sampling at peak periods, despite the Scottish Government’s “Best Practice guidelines” which recommend that they should.
(Note:- In 2005 CEC’s Regulatory Committee (RC) member, Cllr Chris Wigglesworth, while considering licence applications stated openly before witnesses that he “... wanted to go on record to say that the Jacob’s survey was flawed”. Despite this, the RC refused the licence applications before them. In 2007 the same Cllr Wigglesworth, now convener of the RC, stated that the demand survey information before the committee was only good for the limited number of ranks covered and that there “... may be demand elsewhere”. Despite this information being flawed, the RC still denied the licence applications before them - the applicants losing their £1205 application fee – these applications are now subject to legal appeal.)
CEC Restricting Competition
CEC, as principal owners of the local public transport service provision, are using the powers granted under the CGSA to restrict competition to its own services, irrespective of the demand level required by the marketplace – the customers.
While it appears that such requirements are not incumbent on government, this breaches every tenet of free market, anti-competition laws both in the UK and the EC and is assuredly a scandal.
Dangers of artificial restriction of taxis
This artificial restriction has resulted in an acknowledged low expectation of being able to hail a taxi at peak periods. Many now attempt to walk home, join the queues that build up at taxi ranks (the council now marshals these queues while failing to recognise them as an indicator of demand being unmet) or try to hail out of town taxis in an increasingly desperate attempt to get home. All of these reduce public safety, the direct responsibility of the council.
Recently, acknowledged by RC convener Cllr Colin Keir, there have been four instances of assaults/rape of young women who have been “persuaded” to get into a private hire/mock licensed car because of the difficulty hailing a cab.
Rather than improve the service provision Cllr Keir’s response was to require signage to be placed on the rear window of private hire licensed cars. This is inadequate – see letters to Evening News below.
Restriction Policy Winners
a) CEC
• CEC wins because it stifles competition to its own transport plan, its own transport service provision.
• CEC wins because it charges high licence fees, and refuses to reimburse when licence applications are refused.
• CEC wins because it protects the vested interests of the existing trade power brokers, who support CECs draconian control in order to protect their own narrow interests.
b) Taxi Licence Operators
• Taxi licence operators win because the artificial restriction hikes up taxi licence plate values to over £50,000 – although the plates effectively have no real value.
• Taxi licence operators win because the shortage of available drives for drivers forces up weekly rentals – to £350 and above.
c) Less regulated Private Hire
• Less regulated private hire wins because its fleet can expand without restriction – to around 1000 currently.
• Less regulated private hire can effectively do the same work as real taxis, but without the huge expense of using purpose built and wheelchair accessible vehicles.
Restriction Policy Losers
a) Drivers
• Drivers lose work to taxi alternatives - Walking, alternative vehicles etc.
• Drivers are forced to pay extraordinary high rentals – up to and beyond £350 per week.
• Drivers have insecurity of tenure.
• Drivers are forced to work inordinately longer hours to meet the extra costs burden cause by the high rentals from the shortage of taxis.
• Drivers speaking out about the restriction policy, or making application have been ostracised by the trade – to the point of being sacked by vested interest taxi companies.
• Drivers are less able to respond to the needs of the market, i.e. to be working when the demand levels are high while resting when the demand levels are low.
• Drivers have to endure an inability to own their own vehicle unless they are willing or able to pay the market rate of up to £50,000 for something the council agrees they can never own.
• Drivers are denied the right to determine their own work practices despite their commitment to the trade.
b) Customers
• Customers have to endure higher tariffs than necessary to fund the high licence plate “values” and hiked tariffs because of the artificial restriction.
• Customers have to endure a shortage of available taxis caused by the artificial restriction of taxis, making it difficult to hail a taxi at peak periods.
• Because of the artificial restriction of taxis, customers are placed at risk by having to seek alternatives to hailing a taxi at peak periods – walking, ranking, using unaccountable out of town hire cars and invitations to use unlicensed alternatives (4 recent assaults on young women).
c) The economy.
Particularly in times of recession the artificial restriction of taxis:-
1. Reduces the profit potential from sale and supply of vehicles.
2. Restricts the profit potential from the supply of vehicle servicing.
3. Reduces the potential for income from employment for semi and skilled drivers.
4. Reduces the profit potential from provision of training for new drivers.
5. Reduces the flow of cash in the economy.
Conclusions
The restriction of taxis serves only to protect the vested interests of the council and the trade. It conflicts against the interests of drivers, customers and the economy.
The buying and selling of taxi licences amounts to little more than a pyramid selling scheme where drivers are paying increasing amounts for licences with no real value – an ever increasing price assuring against the pyramid collapsing and loss being realised.
Overtime the level has steadily increased to an unrealistic £50,000. In Dublin, licences were trading for upwards of £90,000 before they were forced to de-restrict under the weight of demand from drivers striving to secure their own employment prospects and customers struggling to get a taxi. This is where Edinburgh, under CEC’s dogmatic direction, is heading.
Notwithstanding the commercial aspects for those wishing to own their own taxi, customers are particularly discriminated against because of the implications the restriction policy has for reduced public safety.
It may not be true to say that de-restricting the numbers of taxis will of itself solve issues of public safety, however CEC can not claim to be discharging their duty under the Law to ensure public safety unless and until they have done everything in their power to do so. Restricting the number of taxis available for the public to use, deliberately causing an artificial shortage at peak periods, falls well below the benchmark required by CEC’s statutory duty.
The way forward is for the CEC, in common with the overwhelming majority of other UK councils, and recently West Lothian, to delimit numbers as is the case in the London Model. Only adoption of that policy by CEC can bring resolution and ensure that customers, drivers and the economy all get a fair deal, freed from the restrictive greed of vested interest.
Explanation of Appendices
For background, please find following the article concerning the cases of assault/rape, my letter responding to the CEC’s “solution” of putting signage on private hire vehicles and an opinion piece arguing the case for de-restriction of numbers along the lines of the London Model.
Appendix I _ Article from the Evening News – 13th March
Crackdown on bogus minicab hire drivers after sex attack
Published Date: 13 March 2009
By CHRIS MARSHALL
ALL private hire cabs in Edinburgh are to be fitted with new signs telling the public they cannot be hailed in the street, in a bid to crack down on bogus drivers.
The move to tighten up the rules on minicabs comes a month after a teenage girl was allegedly raped by a man masquerading as a minicab driver.
The incident was the most recent in a small number of attacks, which have now led city licensing chiefs to introduce the new rules.
All private hire cars will now be required to carry branding, informing passengers the vehicles must be privately booked and not flagged down in the street.
Drivers will also be required to keep log books to prevent the practice of "seagulling" where they begin touting for business by cruising the streets.
Councillor Colin Keir, convener of the council's regulatory committee, said: "Over the thousands of journeys in the last year there have been four sexual assaults.
"We have a very safe set of fleets, both taxis and private hire cars, but we're not standing still and safety is our main concern.
"There will be a large sign on the back door of the vehicle which will say that it must be privately booked.
"This is something we have been discussing for quite some time. Private hire cars are not allowed to ply for trade in the streets – they are not taxis."
Raymond Davidson, secretary of the Edinburgh Taxi Association, said members of the trade backed the move.
He said: "It has been decided that private hire cars must have signs on both sides of the vehicle. I'm in favour of that – I think that is definitely one area of the trade that needs tightened up.
"Some passengers are not fussed about what kind of vehicle they get in and are just concerned with getting from A to B.
"This move will make sure they know they are getting into a proper licensed car."
Last year, a 26-year-old woman suffered a serious sexual assault after being picked up in the city centre by a bogus private hire car driver. It later emerged that the suspect, who had been living in Leith, had fled to Sudan.
Police are continuing their efforts to trace him.
Appendix II - Letter of response from Jim Taylor – published 21st March 2009
Private hire signs not good enough
ACKNOWLEDGING that there have recently been four sexual assaults in the last year, Councillor Colin Keir gives us the council's response of putting signage on the back door of private hire cars (News, March 13). Isn't this a dangerous and inadequate response to a serious problem?
What difference will signage make to a female under the influence of drugs or alcohol who knows how hard it is to get a real taxi – because the council artificially restricts the number – and will continue to be encouraged to take risks because she simply wants to get home?
And, how difficult can it be to place signage to persuade someone who desperately wants to get home, their guard dropped, that the vehicle is a private hire and at least licensed to some degree? Unless and until a council has done everything within its power to ensure the safety of the public it is responsible, culpable and accountable for any harm to the public. Artificially restricting the number of taxis falls well below this benchmark.
Doesn't this show us all just how powerful the vested interests are when even public safety takes a back seat?
Jim Taylor, Edinburgh, Edinburgh
Appendix III – Background opinion piece published in the Evening News by Jim Taylor
January 19, 2007
Taxi cap is a bad deal for us all
JIM TAYLOR
FORMER council leader Donald Anderson often informs us Edinburgh's economy is "burgeoning". Rightly, the city needs a transport infrastructure to match and the council's five-year transport strategy aims to deliver this. Curiously, the council's plan omits taxis, although they form a significant part of the travelling public's choice mix.
Council-owned Lothian Buses' expansion of its night bus service will be welcomed, particularly by those who experience difficulty hailing a taxi during peak periods. However, why does this taxi shortage exist?
In my 13 years driving taxis, fleet numbers have risen from 1030 to 1260 (static for four years) - private hire from around 100 to nearly 900.
While private hire soared by over 800 per cent, taxis increased only 20 per cent because of the council's policy to deliberately restrict them.
The council has refused numerous licence applications, spending tens of thousands of pounds of our money in legal fees defending its policy. With inexhaustible public funds it knows the prohibitive legal cost deters opposition.
Although claiming no significant unmet demand for taxis, the council is spending £582 million on trams to meet passenger demand and spent over £300,000 launching a taxi-bus service to the airport. These compete directly with taxis.
They are set against the backdrop of an expanding local economy, increased traffic through rail stations and the airport (recently opened to taxis), more hotel beds with higher occupancy rates from expanding tourism, and the introduction of marshals at taxi ranks to manage queues at peak periods because of an excess demand the council tells us doesn't exist.
The council's unreasonable restriction policy has driven licence plate "values" to over £50,000. Although legislation does not permit licences to be transferred, this is circumvented through the council's own policy of "incorporation".
Rentals for drivers who can't afford to "buy in" to secure their employment have risen to around £350 per week, their employment status no more secure than casual labour. With three drivers for every owner, the real prospect of unemployment discourages drivers from speaking out through fear of being ostracised.
However, granted their own licence, drivers could operate a brand new, fully funded, single-shifted taxi for as little as £190 per week - a huge saving, less hours at the wheel, more hours worked during peak periods and improved service for the public.
Isn't it time for change, for modernisation in line with the London model - no quantity restriction of taxis but with quality controls like "the knowledge"?
How is it acceptable, in a free market economy, for the council to compete against the taxi trade it also regulates and restricts? Doesn't this conflict of interest work against the interests of both taxi drivers and fare-paying passengers, who simply want access to taxis when they need them?
Isn't the council's policy to restrict taxi numbers and stifle competition unreasonable, unjustifiable, unsustainable and morally bankrupt?
• Jim Taylor is an Edinburgh taxi driver
http://news.scotsman.com/opinion.cfm?id=100052007
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