REVIEW OF
TAXI AND HACKNEY CARRIAGE SERVICE
IN THE DUBLIN AREA




INTERIM REPORT


December 1997


OSCAR FABER


In association with
Goodbody Economic Consultants and
Irish Marketing Surveys


CONTENTS



INTRODUCTION
1.1 Background
1.2 Study Objectives
1.3 Report Format

EXISTING STRUCTURE OF THE TRADE
2.1 Legislative Basis
2.2 Supply of Taxi and Hackney Services
2.3 Structure and Mode of Operation of the Taxi Industry
2.4 Structure and Mode of Operation of the Hackney Industry
2.5 Regulation of the Taxi and Hackney Industry

SURVEY METHODOLOGY
3.1 Overview
3.2 Data Collection
3.3 Consultations

INTERIM SURVEY RESULTS
4.1 Overview
4.2 Taxi Rank Surveys
4.3 Household interviews
4.4 Mystery Fares
4.5 Taxi Log Surveys/Operator Records
4.6 Consultations

REVIEW OF THE TRADE
5.1 Introduction
5.2 Current Taxi Fare Structure
5.3 Proposed Fare Changes
5.4 Evaluation of the Proposed Changes to the Fare Structure
5.5 Recommended Fare Changes
5.6 Impact of the Fares Increase
5.7 The Licence Renewal Fee
5.8 Licence Numbers
5.9 Other Issues


SUMMARY AND RECOMMENDATIONS
6.1 Introduction
6.2 Data Collection
6.3 The Taxi and Hackney Industry
6.4 Existing Fare Structure
6.5 Cost Structure of Tax Trade
6.6 Review of Taxi Fares
6.7 Recommended Interim Fare Increases
6.8 Review of Number of Taxi Licences
6.9 Licence Renewal Fee
7. RECOMMENDTONS
APPENDICES
Appendix A Survey Forms
Appendix B Details of Survey Results
Appendix C Focus Group Summary Report
Appendix D Modeling the Annual Gross Earnings of Taxi Drivers

LIST OF TABLES

Table 2.1 Number of Taxi and Hackneys in the Dublin Area (1982-1996)
Table 4.1 Schedule of Taxi Rank Surveys - OctoberINovember
Table 4.2 Summary of Taxi Rank Survey Results
Table 4.3 Household Surveys: Level of Service
Table 4.4 Mystery Fares: Waiting Times for Telephoned Fares 18
Table 4.5 Mystery Fares : Waiting Times for Hailed Fares (taxis only) 19
Table 5.1 Comparison of Existing and Proposed Fare Structures 25
Table 5.2 Costs and Revenues of a Licence Holder Operating a Taxi for One Shift 29
Table 5.3 A Licence Holder Operating a Taxi for Two Shifts, and Using a Cosy 29
Table 5.4 Costs and Revenues for a Cosy 30
Table 5.5 Comparison of Taxi Fares across Cities 32
Table 5.6 Features of regulated taxi fare scales in England and Wales outside London 31
Table 5.7 Changes in Taxi Fares by Journey Type: Six Mile Journey 34
Table 5.8 Impact of the Fares Increase 38
Table 5.9 Comparison of Delays and Waiting times for Passengers and Taxis 39
LIST OF FIGURES

Figure 5.1 Ratio of Existing to Proposed Fare Structures 25
Figure 5.2 Changes in Taxi Journey Length Charge 1979-1996 (1979 100) 33


[snip]


6. SUMMARY AND RECOMMENDATIONS

6.1 Introduction
Oscar Faber in association with Goodbody Economic Consultants and Irish Marketing Surveys have been commissioned by local authorities in the Dublin region to undertake a thorough review of the Taxi and hackney market in the Dublin taximeter area. The study should inform future policy, both short and long term, licensing, fares and quality of taxis and hackney carriages.
This Interim Report has been prepared to indicate findings to date and make preliminary recommendations as far as possible on the existing fare structure and number of licences. It must be emphasised that any recommendations made at this stage must be fully justified in their own right and not prejudice the wide ranging review of the industry which is the overall objective of the study and which will be reported in March 1998.
6.2 Data Collection
The study commenced in September 1997 and in time for completion by March 1998. A considerable amount of data on taxi usage and supply is being collected during the Autumn through to January 1998 period, including Christmas. Irish Marketing Surveys were commissioned to undertake some of the surveys which include:
In addition, a consultation process has been undertaken via media advertising inviting written submission and interviews with relevant with organisations including:
Generally, the data on taxi usage has demonstrated that there is a serious shortage of taxis/hackneys available for hire at peak periods and late at night, which can lead to long waiting times for passengers. The quality and helpfulness of vehicles and drivers respectively, is generally well regarded, and users generally consider the service provided good value for money. On the whole, fares are not considered to be high and there are some indications that users would be prepared to pay higher fares for an increased level of service.

6.3 The Taxi and Hackney Industry

Taxi and hackney carriages are regulated in Dublin. Since 1997 the Dublin taximeter area is the area within the four local authorities, Dublin Corporation, Dunlaoghaire/Rathdown County Council, Fingal County Council and South Dublin County Council.

Taxis are able to stand at ranks or ply for hire on street, are subject to a maximum fare structure and must have a roof sign. Hackneys cannot stand or ply for hire on street. They are not subject to a maximum fare structure and cannot display a distinguishing sign on the vehicle exterior.

Drivers and vehicles have to meet licensing conditions to ensure they are fit for the purpose and can provide a safe means of transport.

Taxi licence numbers are strictly controlled. There are presently 1,974 licences and a further 200 wheelchair accessible licences are currently being issued. The licence fee is £15,000 although private trading of licences can realise £80,000 for a licence.

Hackney carriage licences are not so strictly controlled, but from time to time a moratorium is imposed, as at the current time. There are 3,100 current licences which have been fixed since August 1997.

Most taxi licence holders, whether owning single or multiple licences, use drivers (or cosies) to operate their vehicles when they are not being used by the licensed holders. This can mean that the vehicle is being operated for double shifis during day and night.

The costs of operating taxis differs as between licence holders and cosies. Our research shows that some drivers must work long hours to earn a living and this is particularly true for cosies.

The hackney trade is rather different. Costs are not as high, particularly start-up licence fees but trade is more difficult, particularly a booking for a return trip, given the inability to ply for hire. There is currently a moratorium on the issue of hackney licences for the duration of the study.

6.4 Existing Fare Structure

Dublin taxi fares have not changed since 1992. The consultants have compared typical fares, and fare structures in Dublin with several cities in the UK. This shows that generally fares in Dublin are on the low side compared with these UK cities and that certain elements (e.g. late night charges) of the fare structure result in fares being considerably higher in some UK cities.

We have examined taxi fares to see how they have changed over time in Dublin, compared to changes in the transport component of Consumer Price Index (CPI) and the CPI itself. Taxi journey length charges have increased since 1979 by just over 4%, compared to the CPI increase of 6.4% and transport prices by 7%. Including fixed charge taxi fares between 1985 and 1996, they have increased by between 10% and 13% compared to a CPI increase of 35%. Since the last taxi fare increase in 1992, transport costs have increased by between 3% and 12% and CPI by 8%.

6.5 Cost Structure of Taxi Trade

We have undertaken a review of the cost structure facing the taxi trade - a key determinant of whether fare increases are justified. Our conclusions are that:


This review shows that generally, apart from older drivers who may have already paid back their licence fee, and who can therefore earn substantial income, long hours are necessary to earn even the average wage, unless a cosy is used. For recent licence holders, a cosy is almost essential. For cosies much long and hard work is necessary to earn a living.
6.6 Review of Taxi Fares

We are still in the process of data collection and analysis and are not, therefore, able to reach conclusions on the major issues for the study. This includes whether and in what form fare and entry regulation should continue. We therefore must ensure that our interim recommendations do not prejudice options for our Final Report. Hence our fare proposals should be regarded as provisional. if we conclude ultimately that fare regulation should continue we would recommend an appropriate structure for Dublin. We have been asked to consider proposals from the taxi trade for a fare increase. We have carefully reviewed the cost structure of the industry and compared fare levels with those prevailing abroad. Our recommendation is that an interim rise in fares is justified.
6.7 Recommended Interim Fare Increases

Our interim fare proposals are designed to ensure:

Our proposals are as follows:

No changes are proposed in relation to:

6.8 Review of Number of Taxi Licences

With regard to the number of licences we are clear from surveys and consultation that there is a severe shortage of taxis at critical periods, notably peak periods and late at night. Even though we have much more data to collect and analyse we have no doubt that a similar pattern will be identified. We are, therefdre, confident that the number of licences needs to be increased.

However, as this is only an interim report, our findings are so far only based on partial data and we have not at this stage, undertaken the comprehensive review of the trade which is the overall objective of the study.

We, therefore, propose only a limited increase in the number of wheelchair accessible licences, similar to the number which are currently being issued. The terms and conditions of allocation of these licences should be as the current release and the licence fee should remain at £15,000.

We consider that this limited increase, together with the proposed fare increase will help to increase the availability of taxis at critical periods, and late at night. However, the interim increase will not prejudice the findings of our overall study or close off any options for the fundamental review which we are charged with examining.

6.9 Licence Renewal Fee

Licences must be renewed every two years and the renewal fee was increased from £100 to £450 in 1997. We consider it should cover the costs of administering the taxi service and no more. The current fee appears excessive on this basis.

The ultimate regulatory framework we recommend for the taxi industry will have administrative costs associated. Any licence renewal fee should reflect those costs.

In the meantime our interim recommendation is that the renewal fee reverts to £100.

7. RECOMMENDATIONS
The consultants make the following interim recommendations:

An interim taxi fare rise should be implemented as follows:


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