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PostPosted: Wed Feb 15, 2012 1:02 am 
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Is the deregulatory argument failing?


On the face of it the odds against me look pretty daunting. The law commission have some very educated people, whereas I have a couple of CSE’s courtesy of Caldew School, Dalston and membership of the ‘Dennis the Menace’ fan club circa 1978.

The above being said, one should never underestimate the mind of a psychopath, at least that’s what Dr Spencer Reid said on Criminal Minds, and he is a genius for heaven’s sake.

During the October 2011 Annual General Meeting of the National Taxi Association (NTA), the Law Commission, told delegates “open competition in a capitalist economy is the best way of delivering goods and services”. Delegates were more or less advised if they base any opposition to taxi reform on the economics, the reply will simply not be listened to, preference should be given to arguments surrounding the issues of congestion and emissions.

Effectively what the NTA membership were being advised was in respect of deregulation, the economic argument was something they, we, you, need to get over. If a case for regulation was to be made it must be on grounds of congestion and emissions.

Obviously congestion and emissions are serious issues, they must be, the law commission and every bearded eco-lunatic seem have told us so.

But congestion could be solved like they appeared to do in Sutton in Ashfield a couple of years ago, albeit by abusing the powers of immediate suspension and suspending 30 odd drivers for over ranking……but hey! What’s little bit of legislation abuse between friends? I mean its only cab drivers ain’t it (section 52 of the road safety act was brought in to give the power for councils to suspend for serious matters……not those that would under ordinary circumstances create a £25 fine).

The DFT subsequently booted, the then head of the buses and taxis section, sideways into another role and any advice which may have been coming never actually materialised, although I’m pretty sure if it had materialised it would have been the best ‘god-damn’ advice this world had ever seen’. I mean, to advise local authorities they should use a particular power only under certain circumstances, may have taken all of ten minutes. Yet they have failed to do this, leading to quite dramatic consequences in Sutton in Ashfield and other areas.

Emissions are quite a serious problem – leading to obvious problems in polar bear housing. Yet as we are finding in many areas, this is already being addressed by local authorities. What better way to improve the age of a cab fleet other than bring in an emissions policy, which is actually an age limit (frowned upon by best practice guidance) by stealth.

Yet as the law commission, local authorities and everybody else surely know, the removal of taxis from the emissions problem would have roughly the same effect as taking a single flea off the back of a hedgehog. Indeed, the passage of time and eventual change of vehicles will have much the same effect anyway.

Not that I’m the suspicious type. Indeed, if you people actually read what I regularly write you’d be perfectly well aware that emission and pollution and congestion are all considered in local transport plans. Perhaps this is the dark alley down which some are being led? So, yes emissions and congestion are serious issues, but nothing that a spot of disproportionate local licensing changes, sprinkled with a dollop of over enthusiastic policing wouldn’t solve. And the chances are, if I’m thinking like this, the law commission and others are likely to be thinking the same way.

I must admit, I am seriously concerned with the remit the law commission seems to have been given. The deregulatory approach, and their position in respect of control of numbers would appear to have very little to do with what they are supposed to do, which is of course, reform the law. Taxi numbers are and always will be a highly contentious issue, it is a political statement, by becoming embroiled in a political argument the law commission are seemingly allowing themselves to be drawn into the political arena which from documents shown to me doesn’t appear to be something they’re entirely comfortable with.

It has been one of my own constant gripes about government interference that they fail to understand us. I guess any industry or trade feeling threatened would indeed say that……they do, I read it recently in a paper from the late 1970’s titled “the economic reasons for price and entry regulation of taxicabs”.

The virtues of the free market have been pumped into us since the Thatcher era, subsequent political regimes haven’t, to their ultimate disgrace, veered away from this course, it was only a matter of time until the taxi trade came up in their sights once again.

Deregulation / delimitation of taxi numbers mean different things to many of us. Ultimately it revolves around some poor ‘smuck’ entering the taxi trade and very soon finding out he not only cannot afford to feed his family, he also has difficulty in making his business pay for the one thing which is truly essential to any cab driver……the taxi itself.

The free market dictates the survival of the fittest, there’s even an expression for it, Darwinism; in other words, it’s tough baby…….yes you’ll be told, you should have done some research, you should have put a bigger deposit down, you should have listened to other cab drivers……need I go on?

Of course, when a poor cab owner goes out of business he isn’t subject to some RBS type bailout, the ‘Too big to fail’ philosophy doesn’t come into play at 32 Arcacia Road, yet it personifies how the capitalist system and how deregulation appears to truly work, concentrate on big business, not the humble working cab driver.

Naturally, the above three paragraphs, coming from someone like me, an incumbent already in the market has the stench of self-interest and any other fixation the pro-deregulatory lobby can fire in my direction. After all, if I suggest buying a taxi in a deregulated taxi market is a very risky venture and could lead to extreme personal hardship which may well not only destroy a person’s life, but their family life too, I am effectively crucified by the pro deregulation lobby because that doesn’t really matter, what matters to them is unfettered entry.

If I point to certain facts, such as the public haven’t benefitted through deregulation because fares haven’t dropped (evidence suggests the contrary, although I’ll write more on this later), I am vilified, furthermore, if I suggest the deregulated taxi market leads to a greater dependence upon private hire operators hiring out radios, I am castigated too, after all, those entering the market should make their own choice as to how to run their business, and there’s nothing to stop anyone organising their own radio circuit in the free market game.

In any issue, particularly the entrenched often polarised views surrounding taxi deregulation we have propaganda on both sides.

Public perception the obviously key – the propaganda departments of the pro-deregulatory lobby are very keen to steer away from the word ‘deregulation’ – not that you can seriously blame them, the word is after all synonymous with market failure. Some say was lack of regulation in banks that led to the current recession – many see the failures of the privatised rail system, a still heavily subsidised rail system, as one where the speculators have profited to the determent of passengers and passenger safety. The deaths at Hatfield and Greyrigg bear testament to rail privatisation. I will also mention the deregulated bus services, which are still heavily subsidised – in private hands, not for service but for the profit of shareholders – if a route doesn’t make cash it is swiftly dropped.

You see, this is in many ways an ideological debate, with the word ‘deregulation’ causing so much public concern, the word ‘delimitation’ is said to be a far more accurate phrase. The propaganda being, a council is merely ‘delimiting’ numbers control, they still retain order through regulation. The obvious counterpoint is a previously a council ‘regulated numbers’ therefore the expression ‘deregulate numbers’ is more apt.

Indeed, even James TH Button goes to lengths to persuade readers away from the deregulatory phraseology in his book.

Of course, for a bloke about to lose his cab all this play on words is a kind of insult.

I mentioned in an earlier article that it was fairly obvious our regulators didn’t actually trust the market too much, certainly in respect of cab fares, the theory of supply and demand dictates – when demand outstrips supply – the cab driver could be at liberty to charge a premium for his services – but it’s their free market, not yours so this isn’t going to happen.

Going on from this, it only seems fair to examine precisely why bodies such as the Law Commission, the Office of Fair Trading and indeed Capitalist theory don’t wish to see taxi numbers limited. Am I correct in assuming they are intent upon waging economic warfare upon the taxi trade and their tools are the free market?

Well the law commission appear to have been told to do a hatchet job. The OFT in a seriously bad work of fiction also effectively failed to convince government to veer away from local authority control – yes they managed to get best practice worded against regulation of numbers, but that was about it. I am convinced someone within the DFT is playing god – and with my Scooby doo fixation – they’d have got away with it too if it wasn’t for those pesky councils.

Unfortunately for the benefit of new readers I will have to mention certain matters I have written about in the past, so please, stick with it.

We are all very aware why we have regulations in place. Driving and owning cabs are positions of trust, the driver should be of good character and trustworthy, the owner if not a driver, should be similarly vetted as the vehicle he provides the driver, or drives himself, should be maintained and in good condition to carry passengers.

I will mention fares, although we are all hopefully aware as to the very sound reasons fares are regulated for the protection of the public – however we shouldn’t be under any illusions as to whether or not they’re set for our advantage.

When I read of a meeting between the OFT and DFT during November 2009 where the idea is suggested that local authorities should be pressurised into lowering cab fares I really get quite irritated. Is that what this is all about? Being forced to lower prices? They don’t have a clue and they don’t actually care.

A perfect example is in Murkyside. The cost of hiring a cab in Wirral, which only last month re-regulated taxi numbers, for a two mile journey, will cost the exact same amount as hiring the same, long time regulated, Liverpool cab (both fares will cost me £5). In actual fact, the same journey in a Carlisle licensed vehicle, a deregulated Carlisle vehicle, would cost 50p more.

Further to the above, the NPHA have now produced figures assessing cab fares in regulated areas and deregulated areas. Regulated areas have lower cab fares than their deregulated brethren – across the board.

Why is this? Why do regulated areas have cheaper cab fares than deregulated ones? Well unless the DFT, OFT and Law Commission are completely stupid they should be aware that competition with private hire (whether we like it or not) goes a long way towards keeping prices down. Obviously, this is a subject worthy of an article in its own right, so I’ll leave it at that (for now).

The fare set by the local authority is a maximum in what a driver can charge customer within the prescribed distance. The reality is you are set a minimum fare in respect of the running and operating of the vehicle with associated running costs taken into consideration, there is surprisingly very little basis for profit (how could there be?).

You are in effect charging a maximum minimum fare, to which you are perfectly entitled to charge even more minimally.

In addition to the above the fares are applied across the board so every cab in an area has a uniform fare, it could be the fact a person is working in a district with a mixed fleet of saloon and WAV type vehicles, the fare is the same, even though the running costs, on which the fares were based, differ vastly from vehicle to vehicle.

The same economic theory of free entry presumably applies to the regulations in place for entry, very often local authorities have different policies for new entrants compared to market incumbents, this discrepancy is obviously to the economic disadvantage of the new entrant.

Over the years the cab trade has consistently failed to come up with a simple analogy as to why entry to the taxi market should be regulated. During 1996 a document titled ‘The revolving door’ by Stephen Paul Dempsey of the College of Law, Denver University in the USA used a simple comparison with a piece of common land which was used by herdsmen.

He suggested that adding extra steers to the land would not only have an effect on the land, it would in turn affect each and every herdsman. This can be borne out by hard economic fact.

Additional taxis in the marketplace will not encourage and have never resulted in additional passengers. Therefore the net result of additional taxis is to deprive other taxis of custom.

The market for taxis is limited by the number of passengers. The product we offer which is of course transporting passengers, isn’t one where there can be any true technological leaps in respect of the end product. Even in 1847 the passengers only desire was to get to their destination, the fact they are today transported by a motorised taxicab is immaterial, the result is the same.

If someone enters the taxi market supplying their goods, there will not bring any new innovation and the goods they supply, through regulation, are the exact same goods as everyone else is supplying. Because fares are regulated, in the interest of the passenger, the goods supplied from the new supplier will be at the same price, the only way he can succeed is to take business away from other suppliers.

From a purely social perspective the person entering the market can only succeed by disadvantaging others, to quote someone else, a rat feeding on another rat.

Wayne Casey

You can follow Wayne on twitter @UK_NTA

Wayne’s views are not necessarily those of the National Taxi Association


http://www.national-taxi-association.co.uk/?p=2609

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PostPosted: Wed Feb 15, 2012 8:28 am 
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captain cab wrote:
Is the deregulatory argument failing?

Depends on what you want made regulatory.

Do we want the gov to control the price of cars, tyres etc?

Do we want more council red tape than we have at present?

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PostPosted: Wed Feb 15, 2012 10:25 am 
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Sussex wrote:

Do we want more council red tape than we have at present?



Depends what people mean by red tape.

CC

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PostPosted: Wed Feb 15, 2012 12:25 pm 
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captain cab wrote:
Sussex wrote:

Do we want more council red tape than we have at present?

Depends what people mean by red tape.

CC

This is what I mean by red tape.

Image

Totally unnecessary.

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PostPosted: Wed Feb 15, 2012 5:48 pm 
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Brummie Cabbie wrote:
captain cab wrote:
Sussex wrote:

Do we want more council red tape than we have at present?

Depends what people mean by red tape.

CC

This is what I mean by red tape.

Image

Totally unnecessary.


:lol: :lol:

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PostPosted: Mon Feb 20, 2012 5:48 pm 
Brummie Cabbie wrote:
captain cab wrote:
Sussex wrote:

Do we want more council red tape than we have at present?

Depends what people mean by red tape.

CC

This is what I mean by red tape.

Image

Totally necessary.



=P~ :-"


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