regulatory reform london story aug 2011
TRANSCRIPT
Regulatory reform A London story
Geoffrey Riesel
Chairman & CEO
Radio Taxis Group
London UK
• First taxi in London hackney coach 17th Century
• “Hacquenée, French term for general-purpose horse 'ambling nag'.
• 1625 - only 20 available for hire, operating out of inn yards.
• 1636, the owner of four hackney coaches brought them into Strand outside Maypole Inn,
• First taxi rank appeared - established tariff for parts of London drivers wore livery, easily recognisable. 'Hackney carriage' still the official term used to describe taxis.
Brief History
Regulating the Trade
• 1636 Charles I proclamation enabled 50 hackney carriages to ply for hire in London. - Aldermen to make sure number not exceeded
• After Civil War, 1654 Oliver Cromwell set up Fellowship Master Hackney Carriages -Act of Parliament, taxi driving became profession - 200 hackneys allowed.
• Act replaced in 1662 under Charles II by new act, required hackney coaches to be licensed -restricted number to 400.
• 1688 number increased to 600, after six years by Act of Parliament to 700
Regulating the Trade
• 1711: 800 licenses issued; then another 200
• 1833 unregulated limits on numbers; no restriction on amount of taxis - only limit -driver & vehicle to be 'fit and proper„ -condition still applies
• Makes London licensed taxi trade oldest regulated public transport system in world
• Rivalry between licensed taxis and formerly unlicensed private hire vehicles has been around as long as the taxi trade
1851
• “Knowledge of London” introduced Sir Richard Mayne
• Great Exhibition in Hyde Park - complaints cab drivers didn‟t know where going
• Passing Knowledge - detailed recall 25,000 streets, six-mile radius Charing Cross
• Location - clubs, hospitals, hotels, railway stations, parks, theatres (including stage doors), courts, restaurants, colleges, government buildings and places of worship
• Blue Plaques, statues, London curiosities -examinations are one-to-one oral tests currently approx. four years to pass.
More recent history• No legitimate limitation on numbers
• Still an unrivalled standard of KoL(best taxi drivers in world – Hotels.com survey)
• But deficient administration for many years of knowledge testing has acted as unauthorized barrier to entry
• Ageing population less night drivers
Ageing population of drivers
• More taxi drivers over 70 years old (approx. 6.5%) than under 30 years old (approx. 1.5%)
• London Taxi industry not meeting demand
• If demand not met someone else always does
• Lots of examples, New York, Paris, London
More recent history
• Ageing population especially less night drivers – (age demographics)
• Ageing drivers also keep cabs longer “sweat assets”
• Adds to pollution more older cabs
Could this happen to you?
• Does your taxi industry meet demand?
• Private Hire 2nd standard - easy entry
• Labour force chooses easier option
• Private Hire in London fills unmet taxi demand –caused by unrealistic barrier to entry
London Taxi industry - great Standard
Poor administration of the system – artificial barrier to entry
• 10 years ago Taxi trade C.24,000
• Today Taxi trade C. 24,500
• 10 years ago mini-cabs 30,000
• Today Private Hire C.62,000
• Estimates of as many 30,000 touts
Threats to taxis-other factors
• Pricing a consideration in a slow economic market
• PH perceived as cheaper
• Taxis over the years serviced most of London
• PH has all but annexed everywhere in London but centre – now in centre too
No shortage of direct competitors to taxi London industry
(who flourish when taxi services have gaps)
• Heathrow Express – (although they are now a client too)
• Gatwick Express
• Easy Bus
• National Express bus
• London Underground
• Boris‟s bikes
Threats to the taxi business - London
Inertia in taxi industry
• Effect on standards – case studiesi. New York – radios banned in taxis, apprehension of
increasing medallions – a poor move?
ii. Sweden – deregulation meant both opportunities and threats
iii. Ireland – Dublin - suicides
• Limitation on numbers causes damage, industries must grow - in line with demand
Solutionsi. Balanced continuous growth – measured
against demand
ii. Protectionism always fails
iii. High Standard of driver entry means pride in job
iv. Deregulation causes too much damage
v. Answer for London? - need to modernise and streamline the testing method but keep its standard
vi. Radio bans cause more harm than good