Lawrence
I remember this well. In fact I wrote as damning a piece in the Fairerview rebutting the report. I'm quite proud of it actually. It was written from the tradition of the trade which I was steeped in at that time. However, I now recognise that very tradition is deeply flawed.
When did I have this "Saul on the road to Damascus" conversion? Simply when I researched the scenario and was able to inform myself fully.
What was revealed to me was that the Act laying down the market conditions adopted by the Council was written in the very different economic world of the late 1970's. Then we had widespread government control, even intervention, in commerce. It was accepted as a necessary function of government. But our economy was crippled. Things needed to change.
And they did. Through privatisation Government withdrew from interventionist policies. The market was freed and private enterprise has allowed our economy to flourish. Sure there are still some things wrong, but there is no clamour to return to the old ways.
Meanwhile, the taxi trade in Edinburgh has remained unchanged, it's almost a "Brigadoon" type scenario. The Council instituted the restricted market around 15 years ago and, apart from a couple of releases of plates, has stuck stoically to it ever since. Why? Who knows? Because it's the norm and has been strictly defended by Corporate Services and Councillors who merely considered the matter sorted and on the back burner?
But it should have been modernised too. It should have changed in approach to ensure that the customers have the best possible service while satisfying the rights of drivers to operate their own taxis.
Perhaps the reason it hasn't changed is the strength of the lobby of vested interest groups, primarily owners. The Council gifted them Incorporation, presumably on some spurious argument about passing plates down among family groups. However, this allowed the licence plates to trade and therefore accrue a value.
Initially trading at £20,000, over the last three or four years these are now "selling" for £50,000. The rate of increase is around £125 per week, an astonishing return which will be maintained only in a restricted market. This is unjustifiable, unsustainable and morally bankrupt, particularly when a vulnerable public can't get reasonable access to a taxi on busy weekend nights. The need for Taxi Marshals shows this.
Because of the restriction, coupled with the ever increasing number of drivers coming into the trade and the restriction in the number of available shifts, owners are having a field day. Rentals are being hiked inexorably, now topping £350 per week (somewhere slightly below this level is more common, for the moment) and plate values are rising on the back of this - £10,000 alone since the 3maxblack case. (It's worth noting that continued adherence to restriction will cause licence plate "values" to rocket to ever more giddy heights.)
Higher rentals mean higher tariffs for the customer, more hours worked by the driver with clear implications for public safety, and more drivers forced to "hock" the family silver, pressured to buy into the "scam" in order to secure their own employment - placing them and their families in a precarious financial situation at least until they've repaid the loan for the huge plate "value" which the Act says doesn't exist, recently confirmed by Donald Anderson, doesn't. It's a dangerous game here.
In Dublin this game was played until plates were selling for £100,000, whereupon it crashed. This will happen here ultimately, sooner rather than later. We would argue it's now time for the Council to take the bull by the horns and deal with the situation now, before we have a Dublin style cave-in, at a much higher level, when the financial pain is much greater.
Incidentally it's worth pointing out the difference between the Dublin situation and Edinburgh's. Dublin effectively "de-regulated" not simply de-restricted. It was ill thought through, there were no quality controls which allowed every man and his dog to take a taxi licence (I believe many were taken just so that access could be gained to bus lanes) and the whole situation was a shambles.
Here in Edinburgh, this couldn't happen. We already have quality controls in place, we would argue for even more. We suggested some to Donald at our recent meeting. I could re-iterate them again if you are interested. This means that any increase in taxi licence plates through de-restriction in Edinburgh would be met from within the existing driver pool.
Effectively the number of shifts worked would be roughly the same, the difference being that more vehicles would be single-shifted. Any overlap would be catered for by drivers working through the peak periods to make up any initial deficit in their earnings. This will impact as a better service for customers at peak periods. A clear benefit to the public of de-restriction, and clearer streets for the police interest.
Of course, you may consider that all you need do is monitor the situation and arrange for plates to be added at intervals to ensure that the belt does not tighten again, keeping plate values down and rentals reasonable.
But this approach is flawed in a free market, where demand affecting supply is by far the most efficient mechanism to bring about a match. Indeed Court decisions point to the fact that the Council would need to keep itself fully informed continually with independently supplied information, on a monthly basis, in order to deny licences based on demand information. This is prohibitively expensive and unwieldy. In any case, why bother, when the free market supply and demand mechanism can more readily achieve the same result.
We have made representations to the OFT in respect of these matters. I expect them to form some part of the new report later this year. Following the original report we now have over 70% of UK local authorities de-restricted. This report will place the consumer first and encourage more to do so. However it will be more extensive, addressing the matter through free market theory in accordance with UK and European economic and trading laws.
The key to all of this Lawrence, is that de-restriction is inevitable. It is widely regarded as such throughout the taxi trade in the rest of Scotland and the UK. Aberdeen and Dundee have recently taken the plunge.
Indeed, the trade here in Edinburgh has never been more aware of the issues. It is now primed for change. The only exceptions are those vested interest owners, with a 1 : 3 ratio to drivers, seeking to protect plate "values".
There has never been a better opportunity to modernise the trade along free market thinking.
Regards
Jim
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