Opinion: The DfT's latest initiative is a small step in the right direction.

The Department for Transport's recently launched consultation on Draft Best Practice Guidance for local authorities is a classic curate's egg - some parts encouraging, some less so, but the fundamental shortcoming is that, whatever the outcome of the consultation, the result can only amount to a sticking plaster on what is closer to a regulatory severed artery than a cut finger.

More about the limitations of 'best practice guidance' anon, but in the meantime a few words (although certainly not a full appraisal) about the minutiae of the draft's contents.

Restricted numbers
Following last year's House of Commons debate, which demonstrated some indication of ministerial enthusiasm for restricted taxi numbers and little evidence of criticism, the draft guidance appears to once again embrace the more condemnatory note struck by the Government in its response to the OFT's derestriction recommendation.

While the draft makes it clear that not restricting numbers amounts to best practice, for authorities continuing to restrict it underlines the need for regular reconsideration of the policy, and emphasises that the issue should be considered from the perspective of the travelling public - does the policy provide any benefit, would removing numerical controls benefit the public, or would it lead to a categorical deterioration of service?  The supply-side perspective is also considered - premiums in restricted areas often amount to tens of thousands of pounds, and this indicates that prospective market entrants are prevented from doing so by restricted numbers, and this is considered 'very hard to justify'.

While the rest of the draft largely reiterates previous guidance regarding the need to consult widely and publish the results and justification for continuing restricted numbers, the idea of 'latent demand' is perhaps underemphasised.  The draft refers to people who have responded to long waiting times by not using taxis.  However, perhaps the most important manifestation of this concept is not mentioned specifically, namely the huge growth in private hire numbers apparently resulting from the induced stagnation in taxi numbers.  Whether the draft is intended to embrace this within its wider definition of latent demand is unclear.

But perhaps the most radical element of the draft is that, as regards 'peaked demand', the DfT considers that the rush hour and pub closing time surges in demand should not be ignored in assessing unmet demand.  Current practice is to ignore such peak demand as 'not significant', but the DfT draft considers that it should be treated as significant because these are the most popular times for consumers to use taxis.  If adopted in the current survey methodology, this recommendation would radically alter the concept of 'significant unmet demand'.

Another interesting part of the draft is that it is considered not good practice for the local taxi trade to finance unmet demand surveys, as this could draw into question the objectivity of the results.  However, given the apparent recommendation that these should be financed from general licensing revenues, then this appears to change little of substance, since the trade will still in effect be paying for the survey, and it will be well aware of this.  Of course, the guidance could well mean that the PH trade should be financing the surveys as well (as currently happens in Brighton and Hove, for example), thus something of a kick in the teeth for PH drivers to be financing a survey which in effect is detrimental to them.

Vehicles
While there is little new of note in the draft concerning vehicle specification, the section on vehicle testing is more interesting.  The draft considers that yearly testing is appropriate (except perhaps for older vehicles) and also recommends an MOT-style level of stringency.  However, given that well-used vehicles in the trade can go nearly 'round the clock' in the space of a year, is once a year testing really enough, particularly given the onerous nature of taxi work (eg stop-start, urban, heavy breaking etc)?  Even one-driver vehicles can clock up 50,000 miles a year, thus several times the average annual mileage, on which the MOT seems to be based.  Also, a car tested only to MOT-standard can look very shabby indeed, since the test is not really geared to presentation, but is this appropriate for the trade, where surely some more onerous level of presentation is appropriate?  Surely most LAs already do take such an approach.

The draft also mentions that, apart from the MOT-style test, since taxis and PHVs provide a service to the public, some criteria should be set for the internal condition of the vehicle.  However, there are some trade-specific aspects of mechanical condition that are often included in addition to MOT items, such as greater emphasis on the efficient opening and closing of doors, which may deteriorate with constant use.

Vehicle age limits are also condemned, and the usual 'it's the condition that counts, not the age' mantra is repeated.  Of course, there is an element of truth in this, but these sentiments are perhaps more appropriate for the family runabout than a supposed business.  The point is that in the uncompetitive taxi rank market business is secured irrespective of vehicle age or condition, thus there is no incentive to buy better vehicles.  So while owners of older vehicles wouldn't pay the same to buy a ten-year-old vehicle as a three-year-old one (nor, we suspect, would DfT personnel), at the same time they normally expect customers to pay the same fares to hire their ten-year-old car as they would to hire more modern vehicles.

Of course, this is not an exact science, but the minimalist approach to regulation is arguably at the root of many of the problems that have beset the trade not just domestically, but also worldwide.  Given that many LAs successfully operate age limits already, that in many areas the easy availability of finance (presumably) has substantially improved local fleets recently in any case, and that many LAs seem to have no problem specifying brand new accessible taxis for new entrants to the trade, the light touch approach signalled by the DfT seems even more anomalous.  Low entry barriers mean higher numbers and lower earnings, thus in effect undermining standards as a whole - bad drives out good.  This is particularly the case regarding saloon cars, with a reasonable age limit an insignificant barrier compared to the forthcoming (presumably) DfT specification on accessible vehicles.

While some older vehicles are clearly better than newer ones, newer cars tend to be safer (both mechanically and regarding safety equipment) and qualitatively superior in terms of things like refinement, comfort, cleanliness, presentation and ergonomics.

Also recommended is the contracting out of vehicle testing to rectify any logistical problems and provide competition regarding costs.  However, this would probably lead to a lack of uniformity regarding test stringency (already evident even within LAs), and also increase the possibility of more shady practices.  The 'mystery shopper' suggestion to ensure proper standards does not seem practical - would LAs rig up a TX2 (say) for the purpose of a dummy test, particularly as more mundane enforcement measures are often largely ignored?

Vehicle identification
This section of the document is worth mentioning, perhaps not for the substantive issue (which is nevertheless very important), but because the draft document uses a different style for this issue, in that it describes the various options, outlines the pros and cons of each approach, then comes to a conclusion regarding best practice.  It's a pity that this more discursive approach could not have been adopted for more sections of the draft.

Taxi fares
It is usefully suggested that higher fares might be required in times of greater demand.  Of course, this is to an extent provided for already with regard to late night and holiday premiums, but this could perhaps be augmented still further, for example by using higher fares at rush hours and (the unmentionable) lower fares at other times.

As regards fare discounting, it is rightly made clear that encouraging this for rank and hail hirings could cause problems, but for the telephone market it is suggested that there may be greater scope for competition.  However, to the extent that most taxis generally serve both markets, there is clearly scope for the 'security problems' that the DfT wishes to avoid in relation to the rank and hail markets per se - if a drunk gets a pre-booked discount taxi into town then he might reasonably expect to obtain a discount going in the other direction from a street hailed taxi later, with the latter perhaps not offering any discounts.  Separating the two markets is not quite as straightforward as the DfT's dichotomy seems to suggest.

The DfT also wants to avoid 'confusion' regarding fares, but wouldn't it be better to adopt less intricate fare structures across the country, and also to ensure these are not set at a sufficiently high rate such that discounting (and thus conflict, both within the trade and in relation to the public) becomes widespread or even the norm, which effectively exploits consumers who do not know the market, and thus overturns the basic rationale for regulating taxi fares?  Also relevant in this regard is the light touch approach to quality mentioned earlier, which gives greater scope for the 'cowboys' to offer discount fares to some customers while charging strangers the 'full whack', thus a double whammy for the latter in terms of 'bog standards' and high fares.

The suggestion that taxi operators could promote discounts by advertising on their vehicles also to an extent contradicts the wish to avoid negotiations in the street, since such an approach would foster an ethos of discounting that the public would include the whole trade in.

Drivers
While perhaps reflecting the light touch ethos of the rest of the guidance, on the other hand the draft posits a range of possible driving and other training requirements that could usefully be considered by LAs.  This is wholly commendable, not just in terms of the evident lack of quality in many areas, but also from the perspective of social justice, since drivers working for less than the hourly equivalent of the minimum wage in some areas hardly concurs with the Government's measures regarding the economy more generally.

In relation to the more specific case of 'knowledge' tests, the draft is disappointing in that it does not really say anything specific about the desirability or otherwise of a compulsory test, which should surely be the basic requirement for aspiring drivers. Also disappointing is the usual distinction proffered between the desirability of knowledge tests for taxi and PHV drivers, since the latter can 'check the details of a route before starting the journey'.  Again, as with the fares issue discussed earlier, this dichotomy seems overly simplistic.  For example, PH operators may not provide details of the whole journey, and the customers may change their mind or require several drop-off points, which will not be outlined to the driver in advance.  In any case, the ability to check a map beforehand does not mean that the driver will remember the route during the journey.  And even if it's accepted that PH drivers should demonstrate less geographical ability, should customers be able to phone a 'taxi' firm not knowing whether a knowledgeable taxi driver or a rookie PH driver will turn up?

Taxi zones
A related issue is that of zoning, which the draft document recommends abolishing.  While there are clearly drawbacks associated with zoning (as outlined in the draft), on the other hand these can be no more detrimental than local authority boundaries per se.  Thus there can well be as great a rationale for abolishing the boundaries between adjacent LAs as there is for abolishing zones within a single LA.  By the same token, there can be a good rationale for zoning individual LAs where, for example, it covers a large rural area and taxis from one town converge on another for special events (say), causing problems with rank space and friction with 'regular' drivers.  Moreover, while in accordance with the DfT's draft it might be considered disproportionate to require drivers to pass a knowledge test relating to such a large area, if some sort of informal zoning was adopted for such a purpose, to then allow taxis to work anywhere in the area would clearly demolish the rationale for any knowledge test at all.

The essence of the problem here is that LA boundaries were not drawn up for the purposes of taxi regulation, thus to that extent they are often arbitrary, and while in some cases the regulated area could usefully be broadened, in others zoning the LA's area makes for a better regulated market.  This is clearly relevant to the vexed cross-border issue as well.

Conclusion
This brief(ish) discussion of the DfT's draft has thus far ignored the fundamental problem with the guidance, irrespective of its ultimate contents - the operative word is 'guidance' and this will be no real substitute for more root and branch reform, since it is abundantly clear that many LAs will not even adhere to their basic legal obligations (and those that suffer detriment because of this are not always in a good position to challenge the LA), never mind more 'waste of rainforest' from the DfT, which is a distant government department, unlike the vested interests in the local trade.

However, while arguably merely a sticking plaster on a gaping wound, the guidance is perhaps a small step in the right direction, and contains some useful suggestions as regards quality control, despite the often undesirable (except, of course, in relation to the nonsense of restricted numbers) laissez faire ethos evident in the document.

There is no more rationale for the mishmash of standards and fares in the taxi and PHV trade than there is regarding the qualifications and safety controls imposed nationally on the HGV industry, say. With one of the main promoters of Ireland's national taxi regulator soon to be ensconced at the Office of Fair Trading, perhaps we will one day see a 'taxi tsar' in the UK.

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