4. Developing the Taxi Transformation Plan - SPAD

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A review of taxi operating costs and revenues has been undertaken which indicates that drivers are currently receiving a return in line with average income, (see section 2.10). The last fare review was carried out in 2009 which resulted in a 35% increase but fares are not reviewed regularly. It is preferable to review fares regularly in light of a number of factors including: Operating costs - changes in fares need to reflect the changes in the costs incurred to provide the service to avoid negatively impacting supply or quality. Affordability – ensuring fares are set at a level which will not significantly restrict demand. Driver revenue – the drivers/operators must be able to make a return in line with their level of effort in providing the service. Ensuring fares increases are in line with these three elements helps ensure vehicles are maintained and drivers are not overworking which in turn helps ensure a quality service. An index has been developed based upon the model used by TfL in London. The index works by obtaining data from various sources to produce year-on-year percentage changes for a range of components. The costs per mile are identified each year and the percentage change applied to each element of the fare card. Individual drivers and operators will of course have varying operating costs differing depending on their operating characteristics. Therefore the taxi cost index does not claim to represent the absolute operating costs but looks at the percentage change in average costs between two points in time. The index recommended includes: Maintenance (parts, service, maintenance and insurance) Finance (vehicle repayment or rental cost) Fuel cost (based on average mileage) Change in average earnings (to allow for driver wage increase in line with general increase across the population and also a measure of affordability) Summary of Recommendations - Regulation Adopt market led approach with enhanced quality standards and tightened licensing requirements to balance the supply and demand Begin regular data collection on supply and demand in order to inform ongoing policy. Set out enhanced industry standards. Requirements to obtain operator licence in addition to current driver and vehicle licence. Adopt a framework to regularly and consistently review fares. Page 40
4.4) Initiative 2 – Vehicle Standards 4.4.1) New Vehicle Class A third class of vehicle between the budget and executive classes would be introduced in order to encourage quality in the fleet. The vehicle will operate on its own fare structure and looks to address some of the requests of the industry and public, namely, GPS, Credit & debit facility, Radio communication, MPV vehicle, >80 cm luggage area, >20 cm leg room, >1.3m seat length, Airbag, Auto-transmission, disabled friendly (with modifications). The aim is that drivers/operators will be encouraged to register for the new vehicle when they replace their vehicle and quality in the fleet will be improved. A further fare class will be introduced to offset and incentivise the increased purchase/operation costs. The existing Budget and Executive classes will be maintained at this time though through the enhanced data collection recommended in Initiative 1, the demand for these services can be reassessed in the future. As the differentiation between the qualities of the fleet in each class reduces, there will be less clarity over the markets each class serves and potentially less need to maintain separate classes. 4.4.2) Age Limit The Budget vehicle fleet is of variable quality. The current age limit is 10 years with 8% of the fleet over 8 years old and over 50% of the fleet 6 or 7 years old. In the next 2 years there is potential for the proportion of the fleet over 8 years to substantially increase. In order to raise quality the age limit for vehicles to be licensed as taxis must be reduced. It is recommended that the age limit should be set at 8 years old as this will continue to allow vehicles to be purchased on 7 year finance schedules. This requirement should be brought in for all new vehicle licence applications. In addition to the removal of the older vehicles this may discourage the trade of 2 nd hand taxis at 6-7 years of age. It is recommended that a further method incentivise vehicle renewal prior to the age limit is to introduce a vehicle scrappage incentive in cooperation with the vehicle manufactures. This would encourage old vehicles to be traded in and fleet renewal would occur more quickly. A scrappage incentive will be investigated further with vehicle manufacturers. The Executive fleet are currently all under 6 years old however as the fleet ages there is potential for quality to reduce. It is important to ensure that vehicle standards for the executive and new third class also specify an age limit of 8 years. If appropriate SPAD can choose to continue to license older vehicles under an “exceptions” policy which would incentivise drivers and operators to maintain their vehicles to the highest standards and if at 8 years the vehicle was of a sufficiently high standard it could continue to be licensed for periods of 6 months at a time. This type of policy works well in many United Kingdom provincial local authorities as well as New York and encourages high levels of vehicle maintenance. Page 41
Page 2 and 3: Contents 1. Background ............
Page 4 and 5: List of Abbreviations AM Hour Avera
Page 6 and 7: P&R RTPI RUC SMS SPAD TDM TDMP TfL
Page 8 and 9: 1. Background SPAD (Suruhanjaya Pen
Page 10 and 11: 1.2) Objectives The objectives of t
Page 12 and 13: The TTP proposes the following seve
Page 14 and 15: 2. Assessment of Current Conditions
Page 16 and 17: Population and employment densities
Page 18 and 19: Table 2.3: Budget Taxi Class - Lice
Page 20 and 21: The applicants could apply for the
Page 22 and 23: Table 2.6: Current Operator Require
Page 24 and 25: While standard fares are charged by
Page 26 and 27: Table 2.9: Current Vehicle Operatin
Page 28 and 29: certain times of day. In addition,
Page 30 and 31: Table 2.10: Public Transport Users
Page 32 and 33: 3. Looking to the Future of Taxis 3
Page 34 and 35: Table 3.2: Comparison of Driver Req
Page 36 and 37: Taxi/Population (1000s) Figure 3.2:
Page 38 and 39: It is clear that in the internation
Page 40 and 41: 3.6) Where Do We Want To We- For Th
Page 42 and 43: Developing the Taxi Transformation
Page 44 and 45: High Low 4.3) Initiative 1 - Regula
Page 48 and 49: 4.4.3) Vehicle Standards/Specificat
Page 50 and 51: 4.5.2) Enforcing Existing Driver Re
Page 52 and 53: drivers receiving positive feedback
Page 54 and 55: Summary of Recommendations- Access,
Page 56 and 57: Operator‟s feedback detailed in C
Page 58 and 59: Phasing and Delivery 5
Page 60 and 61: Increasing SPAD Policy Influence Le
Page 62 and 63: PROPOSAL Likely Cost Likely Benefit
Page 64 and 65: Table 5.3: Vehicle Policy Intervent
Page 66 and 67: Table 5.5: Network/External Policy
Page 68 and 69: 5.4) Phasing and Implementation Bas
Page 70 and 71: Summary 6
Page 72: Table 6.1: Summary of the LPTMP Aga

4. Developing the Taxi Transformation Plan - SPAD

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