Regulatory reform london story aug 2011


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Regulation in taxi business, a LOndon storo

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Regulatory reform london story aug 2011

  1. 1. Regulatory reform A London story<br />Geoffrey Riesel<br />Chairman & CEO<br />Radio Taxis Group<br />London UK<br />
  2. 2. Brief History<br />First taxi in London hackney coach 17th Century <br />“Hacquenée, French term for general-purpose horse 'ambling nag'. <br />1625 - only 20 available for hire, operating out of inn yards.<br />1636, the owner of four hackney coaches brought them into Strand outside Maypole Inn, <br />First taxi rank appeared - established tariff for parts of London drivers wore livery, easily recognisable. 'Hackney carriage' still the official term used to describe taxis. <br />
  3. 3. Regulating the Trade <br />1636 Charles I proclamation enabled 50 hackney carriages to ply for hire in London. - Aldermen to make sure number not exceeded <br />After Civil War, 1654 Oliver Cromwell set up Fellowship Master Hackney Carriages -Act of Parliament, taxi driving became profession - 200 hackneys allowed. <br />Act replaced in 1662 under Charles II by new act, required hackney coaches to be licensed - restricted number to 400. <br />1688 number increased to 600, after six years by Act of Parliament to 700 <br />
  4. 4. Regulating the Trade <br />1711: 800 licenses issued; then another 200<br />1833 unregulated limits on numbers; no restriction on amount of taxis - only limit - driver & vehicle to be 'fit and proper‘ - condition still applies <br />Makes London licensed taxi trade oldest regulated public transport system in world<br />Rivalry between licensed taxis and formerly unlicensed private hire vehicles has been around as long as the taxi trade<br />
  5. 5. 1851<br />“Knowledge of London” introduced Sir Richard Mayne<br />Great Exhibition in Hyde Park - complaints cab drivers didn’t know where going<br />Passing Knowledge - detailed recall 25,000 streets, six-mile radius Charing Cross<br />Location - clubs, hospitals, hotels, railway stations, parks, theatres (including stage doors), courts, restaurants, colleges, government buildings and places of worship<br />Blue Plaques, statues, London curiosities - examinations are one-to-one oral tests currently approx. four years to pass.<br />
  6. 6. More recent history<br /> No legitimate limitation on numbers<br />Still an unrivalled standard of KoL(best taxi drivers in world – survey) <br />But deficient administration for many years of knowledge testing has acted as unauthorized barrier to entry<br /> Ageing population less night drivers<br />
  7. 7. Ageing population of drivers<br />More taxi drivers over 70 years old (approx. 6.5%) than under 30 years old (approx. 1.5%)<br />London Taxi industry not meeting demand<br />If demand not met someone else always does<br />Lots of examples, New York, Paris, London <br />
  8. 8. More recent history<br />Ageing population especially less night drivers – (age demographics)<br />Ageing drivers also keep cabs longer “sweat assets”<br />Adds to pollution more older cabs <br />
  9. 9. Could this happen to you?<br />Does your taxi industry meet demand?<br />Private Hire 2nd standard - easy entry<br />Labour force chooses easier option <br />Private Hire in London fills unmet taxi demand – caused by unrealistic barrier to entry <br />
  10. 10. London Taxi industry - great Standard Poor administration of the system – artificial barrier to entry<br /> 10 years ago Taxi trade C.24,000<br /> Today Taxi trade C. 24,500<br />10 years ago mini-cabs 30,000<br />Today Private Hire C.62,000<br />Estimates of as many 30,000 touts<br />
  11. 11. Threats to taxis-other factors <br />Pricing a consideration in a slow economic market<br />PH perceived as cheaper<br />Taxis over the years serviced most of London<br />PH has all but annexed everywhere in London but centre – now in centre too<br />
  12. 12. No shortage of direct competitors to taxi London industry(who flourish when taxi services have gaps)<br />Heathrow Express – (although they are now a client too)<br />Gatwick Express<br />Easy Bus<br />National Express bus<br />London Underground<br />Boris’s bikes<br />Threats to the taxi business - London<br />
  13. 13. Inertia in taxi industry <br />Effect on standards – case studies<br />New York – radios banned in taxis, apprehension of increasing medallions – a poor move?<br />Sweden – deregulation meant both opportunities and threats<br />Ireland – Dublin - suicides<br />Limitation on numbers causes damage, industries must grow - in line with demand<br />
  14. 14. Solutions<br />Balanced continuous growth – measured against demand<br />Protectionism always fails<br />High Standard of driver entry means pride in job<br />Deregulation causes too much damage<br />Answer for London? - need to modernise and streamline the testing method but keep its standard<br />Radio bans cause more harm than good<br />