Another open letter…
Taxi Driver Online responds to an article in the March 2005 edition of Taxi Talk magazine entitled ‘An open letter to licensing officers in regulated areas, although those in deregulated areas should take note’.
Although not stated explicitly, the article seemed to be an attempted critique of a document containing a list of local authorities currently restricting taxi numbers, information relating to plate premiums in more than 30 of these areas and some comment on policy issues.
Although Taxi Driver Online is not responsible for the content of the document in question, we have been pleased to carry it on our site for several months now, and to that extent take some responsibility for its contents, thus this response to the critique in Taxi Talk.
Moreover, the critique is a classic of the genre of the superficial, misleading and self-serving arguments made in favour of restricted taxi numbers, and to that extent we thought it worth spending a little time dissecting it in some depth, lest anyone should actually afford much credence to the substantive points being made.
My Dearest Licensing Officer;
I understand that you may have recently been furnished, with apparently groundbreaking information, from an anonymous source, who seems to want, to influence any future reports you submit to the local authoritys licensing committed on the issue of delimitation.
It is not clear why YLTOA considers the information ‘groundbreaking’. Most of the document’s content is factual, and to say that an LA is restricted and will be carrying out a survey in March (say) can hardly be characterised as groundbreaking. Where the document is original, however, is that it collates a substantial amount of information, entailing considerable research, into a single document, which is, to the best of our knowledge, unique. Similarly, we are not aware of any single source that provides information on so many plate premium values, and to the extent that even in a single location it is often difficult to obtain sufficient information to ascertain a reliable figure, this is again a significant achievement.
Thus the claim that the document contains ‘groundbreaking’ information seems little more than an attempt to misrepresent and belittle it. Like the fare tables in Private Hire and Taxi Monthly, the document per se may be groundbreaking, but not the information per se, which is in the public domain for anyone industrious and diligent enough to collect it.
As for the implied criticism of anonymity, the critique was, of course, penned by ‘Your Local TOA’.
The reasons why someone from another area, would wish to influence events and decisions made in this borough, are a slight mystery to me, I am certain the motives are also confusing to you, why should the licensing of taxis here, be of apparent importance to someone from outside our area, who almost certainly will never use them.
Here YLTOA seems to have only a tenuous grip on twentieth century reality, and in fact the mindset seems more mediaeval monarchy or Orwellian big brother than contemporary democracy with freedom of expression and other such ‘groundbreaking’ ideas.
So presumably we shouldn’t have an opinion on whether Charles Kennedy has a couple of days off the election campaign while his wife has a baby, we should keep our thoughts to ourselves in relation to how cockle pickers are treated in Morecambe Bay, and woe betide anyone who as much as entertains any thoughts at all on the victims of the Asian tsunami disaster.
Of course, this all might sound a bit tongue in cheek, but sadly it is difficult not to in responding to such ridiculous arguments. Indeed, YLTOA subsequently informs us categorically as to the criterion for the ‘best taxi system’, which presumably applies outside his own borough, and indeed perhaps throughout the whole world. Thus not just Chief Constable of the Thought Police, but the Messiah to boot.
It should also go without saying that the trade more generally is not short of people who have an interest in what happens throughout the country, for example the Taxi Talk editorial team and contributors, not to mention other trade journals and representative organisations like the NTA, NPHA and the T&G.
With reference to the citing of quality control over numbers control. Whilst quality control is all well and good, from an anonymous position many miles away, the practicalities on the ground are such that it is the local taxi users that will be expected to ultimately pay for the quality. Perhaps I should take away the spin from the term quality control, because what it actually means, in relation to the taxi profession, is a mandatory wheelchair accessible policy with age restriction. It is, of course, already recognised that the taxi profession does need to improve in terms of quality, hence the Go Skills body being established by the government.
Believe it or not, there’s a very plausible argument which holds that the public prefer to pay for quality rather than pay for the excess profits signified by plate premiums. Surely no member of the public would prefer to pay the same fare for a shabby twelve-year-old vehicle with a £40k plate attached as compared to a three-year-old vehicle with no plate attached, say?
Also, despite what YLTOA states, quality control can mean a number of different things, not just wheelchair accessibility and the age of the vehicle. Of course, many LAs are currently specifying age and accessibility criteria for new licenses, but the main impetus for this is the Disability Discrimination Act, and the fact of current delimitations merely provides a useful opportunity to implement the ethos of that legislation while awaiting its compulsory imposition. Of course, YLTOA is correct in that local taxi users will ultimately pay for accessibility, but this is more an argument against the DDA, and is only indirectly related to delimitation.
Bizarrely, YLTOA then acknowledges that the trade needs to improve in terms of quality, but the mention of the GoSkills body presumably relates to drivers rather than vehicles, so the relevance of this to the first part of the paragraph is unclear.
You are not only being requested to consider issuing more hackney vehicle licenses, it would seem that we are expected to be in a position to pay for the new vehicles as well, hardly the most economic idea in the world, given that our market share would naturally fall, would you not agree?
On the contrary, if the regulatory authorities had had sufficient quality controls in place initially then the idea of quantity controls would never have been necessary. Instead we have restricted numbers, excess profits and plate premiums, which benefit no one except the plate holders who receive them gratis from LAs, and/or wheel and deal in them, often making substantial profits.
Economist and author of several books John Kay said in the Financial Times:
And the value of the licence is a measure of the amount by which their passengers are worse off. If drivers did not have to pay this levy, there could be lower fares and better services. (28/1/2004)
Thus from a prominent economist with no evident axe to grind either way with regard to the taxi trade, we should surely conclude that, contrary to YLTOA’s implication, restricted numbers are hardly ‘the most economic idea in the world’.
In any case, YLTOA presumably misses the point that in areas specifying purpose built and/or accessible vehicles the vast majority of vehicles are brought into the trade new, since there are hardly many TX2s (say) purchased outside the trade and later bought second hand by people in the trade. Presumably YLTOA only ever purchases second hand vehicles, leaving others in his area, or in other locations, to buy them new.
It continues, extolling the benefits of a delimited taxi system, over the evils of a regulated one, quite often stating that taxi licenses are sold on a ‘black market’. I know you will be aware, but the very term, ‘black market’ implies that there is something underhand in selling a business from one person to another, it means ‘illegal goods’, of course is complete rubbish and shows an utter ignorance of the taxi profession in regulated areas. The phraseology used, is in my opinion an attempt to do nothing more than show the trade in a discredited light. It presumes we are operating illegally, which is not the truth at all.
It should be noted that the document has been updated on a regular basis, and several versions published before the Taxi Talk critique used the term ‘grey market’.
However, it should be noted that there are certainly black markets in taxi plates and illegal operating in this regard, most notably in some Scottish locations such as Dundee, where even the council acknowledged that up to half of all taxis could have been operating on illegally hired plates (where someone other than the licensee owns and operates the vehicle). The problem appears to be less widespread in England and Wales, but the problem does exist, for example as mentioned in a Local Government Ombudsman’s report:
The Ombudsman understood that the practice of plate leasing was not confined to this area and was a problem that other councils would need to deal with. (Report 01/B/457).
While YLTOA does have a minor point with regard to the black market terminology, to claim that this is ‘complete rubbish and shows an utter ignorance of the taxi profession in regulated areas’ is more than a tad ironic, and makes a bit of a mountain out of a molehill.
It is apparently stated, most owners who have purchased plates (businesses) will have had a substantial return on their investment. The term ‘will have’ implies that the author doesn’t actually know, it is therefore guesswork, would you want your future decided on guesswork?
On the contrary, surely the phrase ‘will have’ implies that the document author does know? YLTOA seems to be assuming that the document used a phrase like ‘may have’, but clearly does not appreciate the significance of the difference between ‘will have’ and ‘may have’, in which case the point is meaningless. Other than that, YLTOA sheds no light on why the claim amounts to guesswork, very possibly because the claim is true.
Any basic knowledge of the economics of plate purchases (which YLTOA does not seem to possess, as discussed below) will make it clear that all but the most recent plate purchasers will have made a substantial return. For example, the T&G’s response to the Office of Fair Trading’s 2003 report used a rate of return of 15%, so we can assume that it will be at least that, so even taking 2 years as a benchmark then a purchaser will have made a return of 30%, which is surely a substantial return by anyone’s standards. Thus, assuming that the majority of plates have been held for at least two years, the vast majority of plate holders could reasonably have been said to have made a substantial return on their initial investment.
We consider our business an ‘investment,’ however, it is nothing more than a working investment. It is not like a house, it is not like stocks and shares, it is my investment in a career. The terminology presumes that being a taxi proprietor in a restricted area is like having a license to print money. This is of course a presumption and a wrong presumption at that.
While YLTOA usefully makes it obvious that a taxi plate is not like a house or stocks and shares, it is not entirely clear what terminology is being referred to in the second sentence above. The document merely makes several statements of fact which YLTOA does not deny, and the ‘license to print money’ statement comes from YLTOA, not the document.
However, given the profits attributable to plate holders in many restricted areas, the phrase ‘license to print money’ is arguably not inappropriate, and is almost literally correct! For example, in high premium areas non-driving plate holders can easily make net profits well into five figures.
As for being a ‘working investment’, in Liverpool, for example, most taxis are not driven at all by the owner, thus this is an investment pure and simple, and a dictionary definition of the term is money expended in the expectation of making a profit, which is wholly appropriate whether the owner is working the vehicle or not.
Primarily, the local authority regulate fares, I am therefore at the mercy of the LA when it comes to my wages, it is not as if I charge more when my business is busy, and less when it is quiet. Indeed, my business is very often limited by time itself. During a busy hour, even with short fares, it is very difficult to do more than 4 or 5 hires per hour. How can it therefore be presumed that I am making a fortune.
The only one that seems to be presuming that Mr YLTOA is ‘making a fortune’ is Mr YLTOA himself. Perhaps he would have done better dealing in facts rather than meaningless claims clearly intended to exaggerate the statements made in the document.
In any case, while there may be a limit to how many jobs a taxi can do per hour, the point of restricted numbers is surely that the result is that there are more such hours than there would be otherwise. The other point that YLTOA conveniently ignores is that restricted numbers forces plateless drivers into the taxis operated by people like YLTOA, with the former paying an inflated rental to the latter for the privilege.
Thus what matters for an owner-driver is not the limitation on the number of jobs that can be done in busy periods, but how restricted numbers influences the average job count over the shift as a whole, and this is clearly upwards. Moreover, if the journeyman driver averages £25 an hour gross on Friday and Saturday nights (say), there is clearly ample scope to pay the driver, pay running costs and still see significant excess profits.
We are then told that if my vehicle has a night driver on it I can earn up to £10k per year, it fails to recognise that by ensuring my vehicle is double rather than single shifted, I am reducing congestion and ensuring the public are offered a 24/7 service, indeed it fails to recognize that my vehicle in being double shifted requires double the maintenance and costs more to insure.
Presumably the document failed to recognise that a vehicle with more than one driver incurs more maintenance and insurance costs because stating the obvious like this in such an analysis would increase the length of the text several-fold and result in a rather patronising document.
It is clearly easier to outline the additional rental income that an owner receives from hiring drivers, since such figures are relatively easy to ascertain by someone in the trade, and of course YLTOA does not deny the figures stated. Of course, quantifying the profit that an owner makes from these drivers is not so easy; for example, how is the cost of insurance attributed between the drivers – per mile, per income or the additional cost of insuring an extra driver, all of which are quite reasonable bases for computing the cost, but which would give very different results. Thus the document clearly did not attempt to look at the expenses side of the equation, and talked only in terms of income, and YLTOA is no doubt aware that profit equals income minus expenses, so why try to imply that the document somehow tried to hide the expenses aspect of the equation?
Granted, the costs that YLTOA refers to do increase with double-shifting, but this still leaves room for a healthy profit. For example, two costs that can be the most significant in terms of ownership, namely vehicle leasing fees and office dues, do not generally change with double-shifting.
The bottom line is that owners do not hire drivers out of charity or because of concern for the public, they hire drivers to make a profit.
The point about double-shifting reducing congestion is nonsensical. A taxi on the road 20 hours a day rather than 10 hours (say), will increase congestion, surely?
Even assuming that YLTOA is in fact referring to one doubled vehicle rather than two singled, the point is also nonsense, unless it is assumed that both the singled vehicles would always work at the same time, which, it should go without saying, is not borne out by experience.
With this level of ignorance I ask how such people can be taken seriously at all.
Quite.
It then reverts back to the plate value argument, it is obvious from this that whoever is the author, they have a real psychological issue with why taxi licenses achieve a value. However, is the value attached to a license as important as we would be led to be believed.
If YLTOA knew a bit about modern business then they might appreciate why people find taxi plate premiums worth discussing at length. This is particularly so when those with a vested interest in restricted numbers clearly don’t even like the topic of premiums being mentioned. Indeed, in its response to the OFT report, the National Taxi Association even tried to claim that they did not exist!
Thus the rather offensive references to a ‘psychological issue’ in relation to plate premiums is presumably born more of YLTOA’s paranoia relating to the fact that the issue should be raised at all (and indeed addressed in some detail), and his lack of awareness of the contemporary business and commercial world.
It is surely most important issue that the public has a 24/7 service, how important is the value of the license in this context? It is surely the service element that is key to both the local authoritys and hackney trades thoughts. If we do not provide a decent service, we will lose trade.
In fact the taxi sector has already massively lost trade in restricted areas insofar as in such locations vehicle numbers have generally been near static, while private hire numbers have increased hugely to fill the gap caused by substantial increases in demand for the combined trade’s services. Of course, this does not concern the taxi trade except insofar as it means that the excess profits and plate premiums are lower than they would otherwise be, but clearly lower is better than nothing at all. And the excess profits do not depend on providing a ‘decent service’, they depend on restricted numbers, pure and simply.
As regards trying to dismiss plate premiums because restricted numbers are claimed to result in a 24/7 service, even if this was true then it still hardly justifies licenses being granted by a public authority for a peppercorn rent and subsequently being bought and sold for tens of thousands of pounds.
However, the 24/7 claim hardly holds water anyway. It seems based on the assumption that there is no 24/7 service in all unrestricted areas (wrong) and that there is a 24/7 service in all restricted areas (wrong).
Moreover, using YLTOA’s logic there are presumably no 24/7 private hire firms in the country, since clearly there are no restrictions on private hire numbers. This is clearly untrue.
The fact is that drivers will not work if there is no demand for taxis, and likewise if there is demand there will tend to be a resultant supply, and both these statements apply irrespective of whether or not taxi numbers are restricted. Why on earth would a journeyman driver work in the early hours of Monday morning (say) in a small town in a restricted area if there is no or insignificant demand?
In any case, even if this argument did hold some water, what is the ethical case for forcing drivers to work particular hours under plate holder diktat, ably assisted by local authorities? And consumer rights are ultimately subordinate to basic workers’ rights in the economy more generally, so why should taxi plate holders be exempt from this – it’s unlikely that slavery will be re-established so that consumers can enjoy cheaper cotton.
In fact, when these people cite a 24/7 service as justifying restricted numbers, they are more probably alluding to having their vehicle operating 24/7, which maximises their profits, and this is clearly facilitated by restricted numbers.
It is cited, quite incorrectly, that plate values are determined by three factors, earning potential, rent, and stability.
Proceeding not to tell anyone how much money a hackney carriage in a restricted area can earn. Obviously the whoever wrote it does not know, furthering their ignorance, however, how could someone from outside the profession know what the earning potential actually is.
At the outset YLTOA referred to the author’s anonymity, but has now apparently assumed that the writer is from ‘outside the profession’. Thus this is presumably just speculation, perhaps on the basis that YLTOA assumes that anyone with a bit more nous than they have cannot possibly be a taxi driver. Or perhaps this is a more plausible assessment from an objective standpoint, since YLTOA is clearly not impressed by the author’s knowledge of the trade!
However, YLTOA clearly does not appreciate that the document’s discussion on plate premiums is an attempt to theorise some kind of valuation methodology and provide some comment on the implications thereto, thus the lack of actual numbers is not really relevant.
I would however point out that as previously stated, the number of hires a taxi can perform is limited by the time it takes to do them, even with short fares, it is only realistically possible to carry out a maximum of 4-5 fares per hour, again, our fares are set by the local authority. If the author has no evidence of earning potential, how can a calculation be drawn?
What calculation? There is none.
As regards the repeated argument about capacity constraints, again the point is that idle time is reduced with restricted numbers, and drivers are forced to work a plate holder’s vehicle at inflated rentals.
Again there is a level of ignorance here, you see not all taxis are rented out on a nightshift, some drivers prefer PAYE and operate on a percentage of the takings basis.
There is some truth in the first statement, since some taxis are rented out day and nightshift, indeed half a dozen or so drivers in one vehicle is not unknown. Again the example of Liverpool is instructive, since with the vast majority of drivers not owning a vehicle, clearly the vast majority are renting.
As regards the reference to commission-based remunerations, YLTOA is quite correct, but the relevance of this is unclear, since if the owner is earning excess profits from the labours of drivers then the exact basis of the latter’s remuneration is not the most important factor, it’s the end result that should be considered.
The reference to PAYE is also more than a tad irrelevant, since this is generally an unusual arrangement in the trade, and our experience in both rental and commission-based areas suggests that in many areas it is non-existent. Indeed, in the big bastions of restricted numbers, such as Liverpool, Manchester and Brighton, we would be very surprised to hear of any PAYE drivers at all, and we suspect that this is the norm rather than the exception.
The ONLY area where the document is correct, why should someone purchase a taxi business if they thought that the local authority may delimit taxi numbers.
Well they might well think it worth the risk if the delimit is merely a ‘may’ rather than a definite, since presumably they will be able to buy a plate at well below the value prevailing before such thoughts became known in the local trade.
However, the point is that although YLTOA earlier derided any attempt at theorising on plate values, his statement does in fact confirm one of the valuation factors that he had earlier dismissed, namely stability, or in other words the perceived risk that numbers will be delimited.
Despite the inaccurate presumptions, I believe you should be made aware of how taxi proprietors achieve a price for their businesses. Unfortunately, we are not as scientific, as the document would have you believe, there is no mathematical formula and unfortunately it is not exactly E=MC squared material. It is however, a formula that has passed on from taxi proprietor to taxi proprietor throughout the decades, its called ‘the whatever I can get for it’ calculation. It’s based on a system known as ‘pot luck’ and the formula is also known as ‘whatever the last person got for it, I’d like that’.
While YLTOA subsequently admits to here being ‘a little facetious’, it is worth pointing out that it is not necessary to be able to analyse plate premiums in terms of grand economic theories, since the market effectively does much of this for us, and we intuitively make decisions based on economics even though we don’t think of them in theoretical terms. For example, if a driver thinks he will be £10,000 better off per year by buying a taxi plate then clearly he will be willing to pay more for it than a similar driver in an area where he thinks he will only be £5,000 better off per year. Similarly, if an LA announces that it is reviewing its restricted numbers policy, and delimitation seems likely, then plate values will obviously fall.
Thus this simple example demonstrates the relevance of the three factors that YLTOA had earlier dismissed out of hand: earning potential, rent (which contributes to the first factor) and stability (namely the perceived risk attached to purchasing and holding a plate).
I am, of course, being a little facetious, any taxi proprietor would be happy to get back what they paid.
But even happier to make a huge unearned profit attributable merely to the LA’s restricted numbers policy. Indeed this seems to be the more usual scenario than merely getting back what was paid.
No complex sums, these things aint purchased to make money on, just to work and be assured a decent standard of living and offering the best possible service to users.
Once again the ‘work’ element is often misleading in places like Liverpool, given that only a minority of owners work the taxi. However, the claim that plates aren’t purchased to make money on is also hardly credible, since no one pays £40,000 (say) for a taxi plate ‘just to work’, since anyone could do that as a journeyman driver. No, they are purchased to make money on.
Great lengths are gone to, to advise you into having either an adequate taxi system or the best taxi system. I will advise you of the best system, as the author is merely presuming what is good and what is bad. Indeed the personal comments, whilst touching, are an obvious flaw.
So the author was merely presuming, but YLTOA, Supreme Being and fount of all knowledge, is about to outline for us the Holy Grail of taxi regulation. But insofar as YLTOA refers to evidence of a flaw, then we wholeheartedly agree.
The best system is having taxis available when the public wants them, not on a whim of a taxi owner may have been at work all night and too tired to take you to the station the next morning.
It’s that 24/7 argument again. Clearly it’s better having drivers working all night on the whim of an owner and tired due to working excessive hours to pay the inflated rentals which are the consequence of YLTOA’s preferred system.
The best system regularly monitors the taxi trade, telling the local authority, accurately, how many taxis are needed.
The current survey methodology certainly does not achieve that. For example, if an authority issues new licenses to meet unmet demand but will only issue them to existing drivers, then how will the unmet demand be met? It won’t, since supply remains unchanged.
More generally, restricting taxi numbers just pushes supply and demand into an alterative market (private hire) and so when demand for taxis is surveyed it is grossly understated because it has disappeared to another sector.
The best taxi trade is managed and not left open to the whims of a free market, a free market is in operation, anyone can buy a taxi business.
So Mr YLTOA’s local filling stations learn that the taxi trade is operating with licenses issued for next to nothing but are worth tens of thousands because the licensing authority restricts entry. So the filling stations get together and agree to charge the trade £1 a litre for fuel because of this. Frothing at the mouth, taxi proprietors cry foul at this price-fixing cartel. But the filling stations claim that a free market is in operation because they can still buy fuel. Or at least, that’s the obvious conclusion using YLTOA’s logic.
The best system is one that strives to improve and welcomes additional hackneys, after the correct justification has been carried out, the best system is managed, just as we are now. The best system will ensure a proper return to the operator after their service has been completed.
Of course, any ‘proper return’ to the operator after the completion of service depends wholly on the restricted numbers policy operated by the LA. Unlike proper businesses, there is no need to build up goodwill, or have to bother about things like service quality or pricing, the LA does it for them.
The reference to the proprietor is also revealing – as usual, YLTOA effectively completely ignores the journeymen drivers, who are just there to drive the vehicle 24/7 and pay the inflated rentals. In many areas these owners amount to only a fraction of the local trade, which they claim to represent. The real trade, at least in numerical terms, is the drivers – again, Liverpool is instructive, since three quarters of drivers do not own a vehicle.
The best system ensures a dedicated, full time, professional service, available to the public 24/7 and a commitment for many years to come. The authors taxi system would ensure a low-quality, un-dedicated, part time trade, with little commitment or care towards service.
But earlier in his article YLTOA said that it was already recognised that the taxi profession needs to improve in terms of quality.
In fact YLTOA’s earlier claim is the more credible, since his later attempt to link restricted numbers to quality represents one of the great fallacies in the trade. For example, in high premium areas like Woking and Blackpool, is there a high quality fleet? No.
Of course, quality is usually discussed in terms of vehicles, but it should go without saying the driver is just as important. For example, do drivers in restricted areas demonstrate any greater geographical knowledge than in unrestricted areas? For example, does the trade in restricted areas recruit drivers after training them to a higher standard than that specified by the LA? Again the answer is a resounding no – driver knowledge depends simply on the level of knowledge specified by the LA. Ditto things like dress and driving standards.
Also, the rhetoric about dedication, commitment and a part-time trade is sheer spin. In restricted areas such as Corby the trade is riddled with part-time drivers, and there no evidence to suggest that journeyman drivers generally are any more committed and dedicated to the trade in restricted than in unrestricted areas.
Of course, there is a degree of commitment and dedication at the plate holder level, but this is primarily a financial one, and thus in a place like Liverpool this relates mainly to non-working owners.
Unfortunately, the word service is not consistent with the desires of the author, if you can follow theories, I understand Einstein had one, the theory of relativity, in other words, for every action, there is a reaction.
Again, the service fallacy is posited. In actual fact the trade in many unrestricted areas knocks the socks of that in many restricted ones, as does sections of the private hire trade.
Indeed, as usual the example of London is conveniently forgotten. This is often characterised as the ‘best taxi service in the world’, but, guess what, it’s unrestricted! But of course the London trade’s reputation depends on quality regulation, pure and simply.
As for Mr Einstein’s theory of relativity, perhaps not. The owner is presumably referring to Isaac Newton’s third law of motion, which states that for every action there is an equal and opposite reaction.
If you license additional hackneys without justification, these new owner drivers will come from two areas, primarily private hire, presumably the same private hire that on occasion illegally ply for hire in this very borough.
No mention of the other source of new owners, namely existing taxi journeymen. Presumably the reason this is ignored is because it would make no difference to taxi supply, thus best not to mention it, because all that would happen would be that these people would be given the right to operate their own vehicle, which would never do, at least in the ‘do as I say, not as I do’ world of taxi plate holders.
YLTOA does have a point about illegal plying for hire by private hire drivers, but if one of these selfsame drivers wanted to become a taxi journeyman then he would no doubt be hailed as a hero and welcomed with open arms by taxi operators. But woe betide any that would like to operate a taxi as well!
The off shoot or reaction, following Mr Einstein’s theory, is people work when they know they can earn money, this is usually the busy weekend period, at other times, vehicle coverage is poor. This has been proved in many derestricted areas.
Instead of getting it wrong with irrelevant references to the laws of physics, perhaps YLTOA would have been better referring to the laws of economics such as supply and demand, since these seem a good bit more relevant to the discussion in hand than either Einstein’s or Newton’s theories. And indeed here he does in fact outline supply and demand in relation to the taxi trade, since when demand is low, supply will be low as well. But this hardly means that demand will exceed supply, since YLTOA’s statement is hugely contradictory – if outside the busy weekend period demand exceeded supply then lo and behold, those periods would become busy as well, so why would drivers work on Saturday night if weekdays (say) were even busier?
Of course, the laws of supply and demand will have already taken care of that, and any supply and demand mismatch will be greater on Saturday night simply because drivers need significantly greater wages to work at these times – if they could make the same on Tuesday morning (say) then they wouldn’t work on Saturday night, so some would start working the former and less would work the latter – that’s supply and demand in action.
As for YLTOA’s theory being proved in many restricted areas, we have never really seen anything other than anecdotal claims to support this, and given the strength of other anecdotal claims made in support of restricted numbers, this particular one can presumably be dismissed as at best unreliable. Indeed, the OFT reported that evidence pointed to supply increasing at all times in de-limited areas, and presumably the OFT’s evidence is a lot more credible than anecdotal claims, and of course the former rather than the latter would be required by the likes of Messrs Einstein and Newton.
Very often local authorities delimit just because of the weekend demand, unfortunately even after delimitation, demand at weekends still outstrips supply. It has been reported in numerous documents that if every licensed vehicle is at work and permitted to ply for hire, demand would still outstrip the supply of vehicles.
We cannot recall ever reading of such a claim in any document, which is perhaps why YLTOA is unspecific. Perhaps he means that even in unrestricted or derestricted areas demand for taxis exceeds supply at peak times. However, the fact that unmet demand is alleviated rather than eliminated by derestriction is hardly a justification for maintaining restricted numbers.
The trade supports justification of policy.
It would thus be interesting to see ‘the trade’ justifying restricted numbers then, because the contents of the Taxi Trade article singularly fail to do so.
Taxi Driver Online
13 April 2005
www.taxi-driver.co.uk
info@taxi-driver.co.uk
For a more comprehensive critique of restricted taxi numbers please download a copy of our ‘Myth and Reality’ paper from:
http://www.taxi-driver.co.uk/reality.htm
We strongly suspect that YLTOA has never read this document, but we urge him to do so. We would be pleased to include any critique of Myth and Reality on our website.
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