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4. Developing the Taxi Transformation Plan - SPAD

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High<br />

Low<br />

<strong>4.</strong>3) Initiative 1 – Regulatory Framework<br />

<strong>4.</strong>3.1) Supply and Demand<br />

The regulatory framework should seek to balance supply with demand for taxi services in order<br />

to ensure that movement and economic growth is not restrained and <strong>the</strong>re is not over<br />

competition resulting in a reduction of quality. There is currently no barrier to market entry in<br />

<strong>the</strong> GKL/KV region o<strong>the</strong>r than <strong>the</strong> purchase or rental costs associated with <strong>the</strong> vehicle. This<br />

along with <strong>the</strong> deficiencies in o<strong>the</strong>r modes of public transport has seen a level of taxi provision<br />

which is far higher than in <strong>the</strong> o<strong>the</strong>r cities considered as part of <strong>the</strong> international<br />

benchmarking exercise.<br />

The lack of available data on current demand makes it difficult to identify a <strong>the</strong>oretical<br />

optimum level of supply. However <strong>the</strong> characteristics of <strong>the</strong> market, (deterioration of quality,<br />

general abundance of vehicles and reluctance to use <strong>the</strong> meter) along with <strong>the</strong> benchmarking<br />

exercise suggest <strong>the</strong> market is beginning to become unbalanced and is actually over supplied.<br />

If this trend continues <strong>the</strong> market may fall fur<strong>the</strong>r out of balance with a potential increase in<br />

congestion and environmental impacts in addition to fur<strong>the</strong>r deteriorating quality of service.<br />

However in order to correct this we would not advocate controlling <strong>the</strong> number of vehicle<br />

licences or indeed removing licences to reduce <strong>the</strong> current number.<br />

The TTP recommends a market led approach is adopted along with enhanced quality standards<br />

and tightened licensing requirements. Indeed this emphasis on quality regulation ra<strong>the</strong>r than<br />

numerical regulation is <strong>the</strong> World Bank‟s favoured approach along with <strong>the</strong> method that is<br />

successfully employed in cities such as London and Dublin. The recommended quality<br />

improvements are set out under <strong>the</strong> fur<strong>the</strong>r relevant objectives.<br />

Figure <strong>4.</strong>2: Supply Demand Relationship<br />

Demand<br />

Under Supply<br />

Increased public waiting time<br />

Public dissatisfaction<br />

Limited mobility<br />

Economic development restricted<br />

Market Equilibrium<br />

Balanced supply and demand<br />

Market Equilibrium<br />

Balanced supply and demand<br />

Over Supply<br />

Congestion<br />

Over competition<br />

Reduction in quality<br />

Reduced driver revenue<br />

Low<br />

Supply<br />

High<br />

Page 38

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