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Cab firms agree to a price match
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Author:  Brummie Cabbie [ Thu Jun 02, 2011 8:23 am ]
Post subject:  Cab firms agree to a price match
Cab firms agree to a price match

Published on Tuesday 31 May 2011 10:30

Private hire firms in Halifax have agreed to match their prices for the first time from today.

The move means that the cheaper private hire companies will be hiking their fares to meet those charged by their more expensive competitors.

A standard journey will cost £3 for the first mile, with every mile after that charged at £1.40.

Sultan Mahmood, general secretary of the Calderdale Private Hire Association, said the move would make for fairer competition between firms in the face of rising fuel and insurance costs.

He said: “It will bring them all into line and personally I think it’s a good way forward.

“As taxi drivers, obviously we are seeing diesel and petrol prices increase and we are trying to keep our fares as low as we can for our customers.”

In January, Hackney carriage owners agreed not to increase their fares for the second year running.

Source; http://www.halifaxcourier.co.uk/news/lo ... _1_3431544
Author:  Brummie Cabbie [ Thu Jun 02, 2011 8:24 am ]
Post subject: 
Until a new guy on the block comes in and undercuts them all!!
Author:  Dusty Bin [ Thu Jun 02, 2011 8:31 am ]
Post subject:  Re: Cab firms agree to a price match
Brummie Cabbie wrote:
Cab firms agree to a price match



Illegal, and could conceviably attract a jail sentence :shock:

http://www.oft.gov.uk/news-and-updates/ ... 008/131-08
Author:  Brummie Cabbie [ Thu Jun 02, 2011 8:46 am ]
Post subject:  Re: Cab firms agree to a price match
Dusty Bin wrote:
Brummie Cabbie wrote:
Cab firms agree to a price match

Illegal, and could conceviably attract a jail sentence :shock:

http://www.oft.gov.uk/news-and-updates/ ... 008/131-08

I thought it might be, but I didn't have any specific reference.

But then I knew someone on TDO would 'pipe-up' with the correct reference sooner or later!!
Author:  bloodnock [ Thu Jun 02, 2011 10:05 am ]
Post subject: 
Is there a Differance between Price Matching and Price Fixing?? it all adds up to the same thing!
Author:  Dusty Bin [ Thu Jun 02, 2011 1:02 pm ]
Post subject: 
bloodnock wrote:
Is there a Differance between Price Matching and Price Fixing?? it all adds up to the same thing!


Depends whether there's collusion or not.

Supermarkets and filling stations often price match, but they don't collude.

Or so the say :D
Author:  Sussex [ Thu Jun 02, 2011 6:24 pm ]
Post subject: 
bloodnock wrote:
Is there a Differance between Price Matching and Price Fixing?? it all adds up to the same thing!

In this case no, and as the Bin pointed out 100% illegal.
Author:  Dusty Bin [ Thu Jun 02, 2011 10:16 pm ]
Post subject: 
Of course, the thing with price-fixing is that because it's unlawful it's usually done in private and it needs a huge MI5-style investigation to uncover it.

You don't get it splattered all over the press like some kind of advertisement :lol: ](*,)
Author:  edders23 [ Sat Jun 04, 2011 10:37 pm ]
Post subject: 
the supermarkets do a lot of "price matching" which usually results in a price increase it is a form of cartel but whenever they investigate the supermarkets seem to get away with it whereas other industries don't


I cannot see how this can be deemed to be in the public interest BUT someone has to complain for there to be an investigation but if there is the fines can be VERY heavy running to millions of pounds
Author:  Sussex [ Sat Jun 04, 2011 10:50 pm ]
Post subject: 
edders23 wrote:
the supermarkets do a lot of "price matching" which usually results in a price increase it is a form of cartel but whenever they investigate the supermarkets seem to get away with it whereas other industries don't

I cannot see how this can be deemed to be in the public interest BUT someone has to complain for there to be an investigation but if there is the fines can be VERY heavy running to millions of pounds

Where the/a law is being broken is when buyers/sellers conspire with one another to fix prices at a certain level.

In respect of the supermarkets they don't all sit around and discuss what's what.
Author:  Dusty Bin [ Sun Jun 05, 2011 5:01 am ]
Post subject: 
edders23 wrote:
the supermarkets do a lot of "price matching" which usually results in a price increase it is a form of cartel but whenever they investigate the supermarkets seem to get away with it whereas other industries don't


I cannot see how this can be deemed to be in the public interest BUT someone has to complain for there to be an investigation but if there is the fines can be VERY heavy running to millions of pounds


Indeed, but even actual collusion is very difficult to prove and make a case stick, as the OFT has discovered to its cost in the past.

But the supermarket scenario is more like what economists call an oligopoly rather than a cartel.

Say there are two filling stations in a small town and next door to each other, so customers can easily compare prices.

If one puts its prices up then it knows it will lose most custom to the outlet next door.

If one offers a discount then the other will just match it to keep its custom, so both end up losing.

So both know that if they put up their prices it's pointless, ditto reducing them, so they tend to price-match.

But they don't collude - if one does increase its prices because of increased oil costs or duty, then the other tends just to match it.

Another thing to watch out - and which can be related to oligopoly - is 'sticky prices', where because it's difficult to change prices all the time - a restaurant menu, for example - then they may not respond immediately to market conditions.

Of course, supermarket and filling station prices tend to be the opposite of sticky, but it's worth noting that taxi fares are a classic example of sticky pricing, because of the rigmarole required to change them.

Thus the public might have a similar gripe to yourself regarding taxi fares, but you can just explain the theory of 'sticky prices' to them :D
Author:  edders23 [ Sun Jun 05, 2011 3:41 pm ]
Post subject: 
I think an OFT investigation is likely though as collusion has surely taken place here
Author:  Dusty Bin [ Sun Jun 05, 2011 4:40 pm ]
Post subject: 
You mean regarding the PH firms?

I doubt if there's much to 'investigate' as such, given that it's splattered all over the press :roll:

Probably just get a warning, as happened 10 years ago.

That's assuming the OFT ever get to know about it. These things no doubt go on a lot, but normally the colluders have the sense to do things in secret and not to advertise the fact via the local press, so to that extent it's probably more likely to come to the OFT's attention.

OFT warns cab firms against price-fixing

PN 01/01 10 January 2001

Private hire taxi companies must not get together to set prices, the Office of Fair Trading warned today.

The move comes as the competition watchdog sent warning letters to members of the Bury Private Hire Association. It was reported that the members agreed to raise their fares to £1.60 for the first mile and £1.50 for each subsequent mile.

The OFT became aware of the alleged price-fixing from local newspaper stories and from a complaint. The Association is reported to have nine members.

John Vickers, Director General of Fair Trading, said:

'Small businesses like private cab firms are not excluded from the 1998 Competition Act. The Act outlaws anti-competitive behaviour such as price-fixing by all businesses whether large or small in most sectors of the economy. All allegations of this type will be investigated by the OFT.

'No assumption should be made at this stage that there has been an infringement of competition law in the Bury case. We will not be in a position to decide that until we have all the facts'.

NOTES

1. The warning only applies to private cab firms and not to taxis licensed by public authorities where fares are decided by the authorities.

2. Powers under the Competition Act 1998

The Act gives the Director General powers to investigate suspected infringements of the Act's prohibitions:

a prohibition of agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition in the UK (or a part of it) and which may affect trade within the UK (or any part of it); and

a prohibition of any conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK or any part of it.
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