Taxi Driver Online

Why the London taxi has not conquered the world
By Michael Skapinker
Published: December 8 2004 02:00 | Last updated: December 8 2004 02:00

My first thought as I slide into the back of a New York taxi is always the same: why do the world's most demanding consumers put up with this?


It is not the drivers I object to. In spite of their reputation, the New York taxi drivers I have used have known their way around, spoken passable English and been perfectly friendly. Perhaps I have been lucky. Many of the current generation of drivers are from the Indian subcontinent. I always ask whether they miss cricket. The homesickness and longing that crosses their faces is invariably followed by a warm conversation that lasts the rest of the journey.

No, my problem is the taxis themselves. Is there a more uncomfortable vehicle than a New York cab? Passengers are forced to slump low down, legs jammed, necks strained from trying to peer over the partition that divides them from the back of the driver's neck.

It is all the more galling when you have just arrived from London, the city with the best-designed, most comfortable taxis. Why aren't the streets of New York - indeed of every city - full of them?

The London taxi's failure to conquer the world makes an intriguing management case study. At first glance, it seems a classic case of British ingenuity stymied by a lack of ambition and commercial nous. Manganese Bronze, the company that manufactures most of London's taxis, is an undersized outfit that seems to stumble from one crisis to the next.

Last month, the company sold Zingo, a service for hailing taxis from mobile phones. The company spent £13m developing Zingo. It sold it for £1. Zingo helped increase Manganese Bronze's annual losses to £4.1m in the year to July, from £3.3m the year before.

In November 2003, Jamie Borwick, Manganese Bronze's former chairman who controls about 37 per cent of the company, voted Ian Pickering, the chief executive, off the board. The board re-appointed Mr Pickering half an hour later.

Yet the company continues to produce outstanding taxis. The old model, the Fairway, is extraordinarily durable. The average London cab is 13 years old. The most recent model, the TXII, is even more comfortable than its predecessors. You do not bang your head as you get inside, the taxi offers more legroom than a first-class aircraft seat and has no difficulty accommodating wheelchairs. It also comes with a left-hand drive option. So why did Manganese Bronze manage to sell only 168 taxis in the US last year, itself an enormous leap from the previous year's derisory 26?

To understand why London taxis struggle, you have to understand taxi regulation. Regulation explains why it has been so difficult to sell London taxis anywhere else, particularly in North America. Regulation also explains why, in spite of all its commercial problems, the London taxi has survived at all.

The reason London's cabbies drive the taxi is that they have no choice. The Public Carriage Office specified in 1906 that the city's taxis had to be able to turn within a 25-foot circle. Only the London cab can do this.

North American cities have different regulations. Taxis do not have to have tight turning circles, but they do need to pass strict emission tests. The London taxi has a diesel engine which struggles to pass.

Bruce Schaller, a consultant who publishes the indispensable New York City Taxicab Fact Book, says New York's rules make life even harder for the London taxi. All taxis entering service in New York have to be new and have to be taken out of service no more than five years later. (I have been less lucky here. Most of my cricket-loving New York cabbies seem to have got around this one.) These rules make it difficult for Manganese Bronze to argue that the durability of its taxis compensates for their high selling price compared with the Ford Crown Victoria, the predominant New York cab.

Larry Smith, however, believes that all these problems can be overcome. In 1998, Mr Smith, a Boston-based entrepreneur, sold his company, Finagle A Bagel, and flew off on his first visit to London. He told himself that if he saw a product that really appealed to him, he would make it the basis of his next business. He stepped off the aircraft, walked out of Heathrow airport, climbed into a London taxi and thought: this is it.

Mr Smith, whose company now has the right to distribute Manganese Bronze's taxis in North America, has found it hard going. He and his fellow-investors have spent $10m getting the taxis through their emission and crash tests and setting up a sales network. Life will get easier next year when Manganese Bronze starts producing the taxis with petrol engines for the US market. A small number of London taxis have already begun appearing in San Francisco, Detroit, Las Vegas and Ottawa.

Mr Smith thinks it may even be possible to overcome New York's restrictions. The ease with which disabled passengers can use London taxis could allow the cabs to stay in use beyond the five-year limit. The taxis' resale value could make them an economic proposition for drivers who buy them and then sell them in cities with less restrictive requirements.

To really succeed, however, Manganese Bronze needs to bring its prices down, which means adding foreign manufacturing sites to its factory in Coventry. It announced in February that it had signed a letter of intent with China National Bluestar and the Lanzhou Municipal People's government to make taxis in China. Those who thought they had heard this before had indeed heard it before. The company previously had an agreement with another partner, Brilliance China, that unravelled. Mr Pickering says he is more hopeful this time.

Mr Pickering says the company is talking to two companies about making its taxis in Mexico. Manganese Bronze would export kits for assembly in Mexico, from where it could supply both the local market and the US and Canada. We shall see. In the meantime, I will keep talking cricket. michael.skapinker@ft.com


regards

Captain cab