Part D – Understanding and improving industry performance (PDF ...

While there have been reports that some aspects of
service quality can deteriorate following liberalisation, it
is important to keep in mind three things: (1) in cases
where liberalisation resulted in a deterioration of service
quality, supporting quality regulations were generally
lacking; (2) an ‘oversupply’ of taxis does not equate to a
‘deterioration of quality’ – consumers benefit by having
to wait less for a taxi as supply has increased; and (3)
the inquiry is aware of no studies that show taxi service
quality in closed entry regimes is better than in open
entry regimes, all else being equal.
9.4.6. Lack of information
Few international jurisdictions have access to the
depth and detail of information that is required to fully
assess industry performance.
During the inquiry’s examination of international jurisdictions,
it proved very difficult to obtain a great deal of meaningful
data on the performance of the different taxi and hire car
industries. The type of information usually available only
covered static metrics, such as the number of taxis licensed
– and even this information was sometimes only available as
an estimate or not available at all.
The inquiry’s view is that aspects of the taxi industry that
are easily measured, such as the number of licensed
taxis, are often not good indicators of the performance
of taxi industry when compared with data that is harder
to measure, such as total numbers of trips, industry
revenue and waiting times for consumers. The inquiry
found that the information it considers important is not
collected systematically by regulators in each jurisdiction:
accordingly analysis of international experiences is often
based on anecdote and rhetoric.
New York is one of few international jurisdictions
examined by the inquiry that has a readily reliable and
fairly comprehensive source of information on the taxi
industry. The city’s Taxicab Passenger Enhancements
Project (TPEP) system, introduced in 2008 and fully
implemented in 2009, is mandatory in all New York taxis.
The program enables recording of approximately 30
different data elements (including driver ID, medallion
number, GPS location, pick-up and drop-off time, fares,
tipping and number of passengers). The New York Taxi
and Limousine Commission (TLC) is able to access these
elements directly from each cab for analysis. The TLC can
access the information in real-time via a web application,
with complete data files provided to the TLC on a weekly
basis. While the TPEP system’s primary purpose is to
enable passengers to pay with credit cards and improve
the information available to passengers in taxis, its
broader uses include enabling more effective enforcement
and compliance, monitoring traffic flows and dealing with
lost property.
The most notable use of the TPEP system is that,
after reviewing data gathered from the system the
TLC uncovered thousands of cases of taxi drivers
overcharging passengers through a meter scam to the
sum of approximately $8.3 million. 39 In response, the
TLC instigated a system where back-seat television
screens will alert a passenger when the meter is switched
to a higher rate. While the system has enabled the
TLC to strengthen its enforcement and compliance,
valuable information on such things as industry turnover,
distribution of trips and congestion is readily available.
The amount, quality and reliability of information collected
from New York taxis appear unprecedented in the global
taxi industry.
In Western Australia, the regulator obtains regular
performance data from the major metropolitan taxi
networks. Information gathered from the taxi networks
includes waiting time, jobs not covered, complaints
and information relating to passenger and driver safety,
such as number of in-cab emergency alarm activations.
This information is used to inform the regulator’s policy
decisions, specifically their licensing approach as
no more licences are released until set performance
standards are met. The performance of the industry is
also published in a quarterly report on the regulator’s
website and is available to the public.
The above examples underscore the value of meaningful
industry data in informing policy decisions by government,
as well as enabling more effective monitoring and
compliance. The inquiry believes that reliable and
informative data is critical to effectively implementing
and evaluating regulatory reforms – something that has
generally been lacking in other jurisdictions.
9.4.7. Competition and efficiency
Better taxi and hire car systems make more effective
use of competition and promote efficiency.
The way in which a taxi system is set up can have a
profound effect on the level of competition that emerges.
Experiences from international jurisdictions have shown
that some systems perform better in terms of facilitating
competition and efficiency in the taxi markets.
39 For example, see ‘Millions stolen from passengers in NYC taxi
scam’, accessed on 15 March 2012 at: www.rmtracking.com/
blog/2011/01/18/millions-stolen-from-passengers-in-nyc-taxi-scam/
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