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

More documents

Recommendations

Info

New Zealand is an example of a taxi system that facilities competition. Taxi networks are allowed to compete for spaces at taxi ranks at high demand places such as airports and hotels. This creates an effective market for competition between taxi booking networks: taxi networks want to build up their businesses and will compete for taxi rank spaces on private company land – this translates to higher quality services at ranks as taxi networks that deliver high quality are more likely to be awarded the rank space. 40 The inquiry also considers that the different regulatory structures applied between taxis and hire cars can impact on the level of competition and efficiency in a particular jurisdiction. In London, private hire cars (or ‘minicabs’) appear to fill in the gaps where taxis are unable to meet demand and increasingly are able to compete directly with the taxis (or ‘black cabs’). While minicab drivers can only perform prebooked work, they do not have to pass the more difficult test ‘The Knowledge’ that taxi drivers must pass. So whilst minicab drivers must hold a London Transport and Private Hire Licence showing that they are fit for purpose and undergo a topographical test to obtain their licence, they can become licensed in about 12 weeks. Thus, liberal entry conditions have led to the predominance of these vehicles, particularly in suburban areas. Minicab fares are also generally cheaper than taxi fares. Addison Lee in London is a leading example of minicabs providing consumers with a competitive alternative to taxis and distinguishes itself through its advertising, modern technology and vehicles. Addison Lee has been allowed to flourish in London, becoming the largest minicab hire car operator in the city with over 2,400 vehicles (see Addison Lee case study in chapter 14). In New York City, taxi availability had been a major problem in the outer boroughs beyond Manhattan and the New York airports. With general taxi services almost nonexistent in these boroughs, a sector of hire cars illegally servicing the rank and hail market flourished. As a result, in December 2011, city officials announced plans to allow livery cabs (hire cars) to legally pick up street hails in the outer boroughs and in upper Manhattan. 41 An important point to note here is that, as the number of hire car licences is not restricted, hire cars were used to fill the service gap caused by a restrictive taxi licensing regime. The London and New York examples demonstrate that the regulatory environment that dictates the interaction between taxis and hire cars plays an important role in the competitiveness and efficiency of taxi and hire cars services. If the regulatory environment is set correctly, it can benefit consumers by providing more services and lower fares. 9.4.8. Emerging potential of technology Technology has the potential to increase competition and efficiency. Developments in technology can potentially increase competition and efficiency in taxi markets – making the case against liberalising entry and fares less compelling than it ever has been. As noted above, jurisdictions that liberalised entry often experienced increased entry and an increase in fares, with the magnitude of these effects considered somewhat less than efficient. For example, liberalisation in Ireland resulted in significant entry, while the Netherlands and Sweden experienced significant fare increases. However, these experiences occurred during a time when limited means existed to promote efficient markets – specifically, the technologies and information systems available were considerably less advanced than today. The OECD noted that one possible reason for licence and fare deregulation resulting in a fare increase may be inefficient information and lack of transparency on fares. 42 Significant advances in technology in recent years mean that the experiences of liberalisation must be examined in a new light. Modern technology now enables the transfer and capture of information in real-time, better enabling information to be distributed between industry participants and market consumers. Furthermore, this technology is now becoming mobile (such as through smartphone applications), potentially reducing the prevalence of spatial and temporal monopolies that once existed in the taxi market. In this sense, technology can allow the rank and hail market to exploit the same information available in the pre-booked market, such as information on fares and availability prior to accessing a taxi. This gives customers and drivers a greater amount of real-time information about service options and promotes fare and service competition. 43 Advances in technologies can also potentially improve vehicle utilisation by giving drivers improved real-time access to demand characteristics, enabling them to make more informed choices about market participation. 40 For example, see Newswire website, accessed on 14 March 2012 at: www.newswire.co.nz/2011/03/taxi-stand-deals-make-life-tough-forcabbies/ 41 New York Times, ‘Deal struck to broaden taxi service in the City’, accessed on 15 March 2012 at www.nytimes.com/2011/12/21/ nyregion/deal-is-struck-to-broaden-taxi-service-in-new-york-city.html 42 OECD (2007), Op. Cit., p.236 43 See case study on Addison Lee, chapter 14 Understanding industry performance CUSTOMERS FIRST 175
Additionally, ‘cloud computing’ – the ability to share resources, software and information over a network – provides the potential for technology to overtake traditional networks. Dispatching to drivers could potentially be serviced from central ‘cloud’ networks maintained remotely via computer servers, without the need for taxis to be connected to a physical dispatch network. Such a connection could enhance efficiency by enabling the connection of many taxis to a network without the physical barriers associated with a physical network affiliation. There is an increasing awareness that efficient allocation of taxi services via transparent and real-time information on taxi supply, demand and price in the rank and hail market can become a reality in deregulated markets. These emergent technologies, not available previously, mean that the potential for effective competition is significantly higher than previously. Inquiry findings è Given the above considerations, the inquiry considers that open entry regimes for taxi markets are desirable. While the immediate aftermath of liberalisation can be disruptive, open entry regimes, when implemented correctly, can significantly benefit consumers in terms of better availability of taxis, wider service choice and improved service standards. è Removal of entry controls has been achieved successfully in many of the jurisdictions examined by the inquiry. These successes reinforce the importance of dealing with quality and safety issues appropriately in taxi markets and ensuring proper enforcement of regulations relating to safety and quality. In this sense, it is critical to remember that in any reform of the taxi industry, including removing quantitative restrictions on licence numbers, the government and/or regulator must be acutely aware and responsive to ensuring that proper controls are in place that are specifically directed towards delivering improved services and safety to taxi consumers. 176
Page 2 and 3: Part D Understanding industry perfo
Page 4 and 5: The number of licences is restricte
Page 6 and 7: 9.2.2. Quality and safety controls
Page 8 and 9: Case study New Zealand’s experien
Page 10 and 11: Case study Singapore’s unique reg
Page 12 and 13: Case study London’s quality contr
Page 14 and 15: A report commissioned by the inquir
Page 16 and 17: Another possible explanation for hi
Page 18 and 19: From these comparisons, we can obse
Page 22 and 23: Chapter 10. 10. Taxis, hire cars an
Page 24 and 25: 10.1.2. Substitution with public tr
Page 26 and 27: Nonetheless, there are market mecha
Page 28 and 29: 10.2.2. Detriments from restriction
Page 30 and 31: On the other hand, some submissions
Page 32 and 33: 4. The regulatory burden of decidin
Page 34 and 35: Country licence releases and the pu
Page 36 and 37: 10.2.3. Are there offsetting benefi
Page 38 and 39: The inquiry conducted research into
Page 40 and 41: 10.2.4. Valuing the effect of licen
Page 42 and 43: It would also be possible to implem
Page 44 and 45: Inquiry findings è The detriments
Page 46 and 47: In its 1999 report, KPMG argued tha
Page 48 and 49: 10.3.4. Effect on taxi operators an
Page 50 and 51: The practices raised with the inqui
Page 52 and 53: Historically, the zones generally r
Page 54 and 55: Merging the taxicab markets of two
Page 56 and 57: A further summary of these data is
Page 58 and 59: 10.5. Regulation of taxi-cab fares
Page 60 and 61: • It exposes taxi operators to a
Page 62 and 63: KPMG argued that these restrictions
Page 64 and 65: 10.7. Vehicle regulations Taxis and
Page 66 and 67: Advertisements The policy to remove
Page 68 and 69: In recent years, NSPs have increase
Page 70 and 71:
Some respondents argue that the mar
Page 72 and 73:
Driver obligations to the NSP NSPs
Page 74 and 75:
There are nine accredited secondary
Page 76 and 77:
From 1953, the use of two-way radio
Page 78 and 79:
11.4.2. Mandatory network affiliati
Page 80 and 81:
The inquiry considers that there is
Page 82 and 83:
Walters FM also said: Until such ti
Page 84 and 85:
The ACCC has been called on a numbe
Page 86 and 87:
The ACCC also noted that West Subur
Page 88 and 89:
This also means that other NSPs and
Page 90 and 91:
Metropolitan NSPs charge affiliatio
Page 92 and 93:
Figure 12.1 Average fare costs, met
Page 94 and 95:
11.8.3. Affiliation with more than
Page 96 and 97:
However, unlike most other goods an
Page 98 and 99:
12.3. Characteristics of the paymen
Page 100 and 101:
A further key feature of two-sided
Page 102 and 103:
Case study Cabcharge penalised for
Page 104 and 105:
To compete with Cabcharge, the newe
Page 106 and 107:
12.5.1. Removing regulatory barrier
Page 108:
In addition, given the well establi
show all

Part D â Understanding and improving industry performance (PDF ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?

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