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

The ACCC also noted that West Suburban’s
geographic coverage is largely complementary to that
of Silver Top.
Figure 11.2 Heat map of West Suburban Taxis
pick-up locations
In relation to the supply of taxi depot services to taxi
operators in the metropolitan Melbourne taxi zone,
the ACCC’s market inquiries suggested that there
was limited competition for drivers and operators
between Silver Top and West Suburban. 56
As the ACCC’s decision in 2009 lacks any further
details, it is difficult to tell what evidence was before it to
distinguish the two decisions. From the statements made
by the Commission, the inquiry surmises that:
• The concept of ‘closest competitors’ is given greater
credence in the second decision, with some weight
being attached to the market positioning of Silver Top
and Black Cabs (now 13 CABS).
• In 1995, it was argued that more concentration would
lead to less incentive for networks to compete for
taxi operators and that there was little competition
possible for customers given regulated fares and a
fixed quantity of vehicles.
• The complementarity of geographic coverage was a
relevant consideration in the 2009 decision, whereas
in 1995 the two firms were seen as competitors,
notwithstanding their strengths in particular
geographic areas.
Figure 11.3 Heat map of 13CABS pick-up locations
Figure 11.4 Heat map of Silver Top Taxis pick-up locations
At face value, the first and third points seem
contradictory. The first says that size in the market
(metropolitan Melbourne) is the important determinant
of competition, not geography (even though there is
significant evidence that Silver Top and Black Cabs were
stronger in particular geographic regions of Melbourne).
The third says that geographic factors are important,
as West Suburban’s operations are ‘complementary’ to
Silver Top’s.
Spatial analysis of NSP data, for each NSP over the
same period in 2011, demonstrates the importance of
established networks within a geographic zone. West
Suburban is shown to have a strong presence in the
western suburbs while Silver Top and 13CABS have
market dominance in other areas of Melbourne. The
following figures illustrate the pick-up locations of jobs
completed by each of the metropolitan networks with
darker areas indicating a higher number of jobs completed.
Figure 11.5 Heat map of Platinum Taxis pick-up locations
56 ACCC (2009), A Gange Proprietary Limited - proposed acquisition of
West Suburban Taxis Pty Ltd, www.accc.gov.au/content/index.phtml/
itemId/872435/fromItemId/751043 accessed 23 March 2012
Source: TII analysis of NSP supplied data
Understanding industry performance CUSTOMERS FIRST 241