Chamber of Commerce
16 December 1997
The taxi service in Dublin is failing to meet the demands of a public transport system. Despite increased economic activity, demographic changes, and increasing night life activity in the city, the number of taxis remains severely restricted. The demand for taxis has increased significantly leading to a growth in the hackney market and substantial increases in the transfer value of taxi plates.
The issuing of new licenses is only a partial solution. A restructuring of the taxi service is required to meet current and future demands and allow taxis to become a more integral part of Dublin’s public transport solution.
The Chamber recommends the following measures:
Dublin is being suffocated under the weight of an inefficient and outmoded transport system which is not keeping pace with developments in the economy. Immediate action is needed, not just to deal with Dublin’s transportation problems in the short term, but to set in place systems which will meet future long-term demand.
The taxi/hackney service is a key element of our public transport system which is in need of immediate action. This element of the public transport system has a potentially important role in encouraging people to move away from the use of private cars, one of the mainstays of the Dublin Transport Initiative. They are flexible and immediate in a way which bus and rail transport is not and so their potential as part of the public transport mix is significant.
It is clear that this service is not meeting current demands. This is illustrated by the lack of service at peak and increasingly off-peak times and the growth of the hackney market over the last five years. The taxi service has not developed to meet the changed socio-economic and demographic profile of Dublin, such as increased population, disposable income and commercial activity, the growth of tourism and the unacceptability of drink driving. According to a recent report from Trinity College, the current shortage of taxis is costing the Dublin public over £12 million per annum.
Past policies have created a situation where it is now extremely difficult to find a solution which is equitable to both those who earn their livelihood from driving taxis and satisfactory to the citizens they are in business to serve. The issue has become politically charged and there has been a general reluctance to implement any measures which will restructure the service to meet current and future demands.
This paper sets out recommendations which will allow the taxi service to meet current and future demand and contribute effectively to the region’s transport network.
Restrictions on taxi plate numbers were imposed in 1978. This has resulted in a “transfer value” which has reached approximately £80,000 per plate and an inability of taxi service to meet demand certainly during peak times and increasingly in traditionally off-peak times. This has led to a substantial increase in the numbers of hackneys. There are currently 1974 taxi plates with a further 200 coming on stream. In the Dublin region hackneys outnumber taxis by approximately 3:2 with an estimated 3000 current hackney licenses in operation. While taxis can pick up fares from ranks and street hailing, hackneys are restricted to base calls. Despite this restriction, hackneys have effectively exploited the inability of taxis to meet demand. The argument that the market is not large enough to support new taxi licences is belied by both the high cost of taxi plates and the significant growth of hackneys. However, simply issuing new licenses or converting hackneys to taxis will not resolve the immediate problem
The licensing of both taxis and hackneys now comes under the remit of the local authorities. In a political context, granting local authorities licensing and renewal power was primarily driven by a policy of giving them more authority and a new means of generating local revenue. As a result, the announcement in June that taxi licences would increase from £100 to over £450 reflects a perception of licensing as a revenue generating instrument rather than an integral part of public transport. While there is an argument that renewal fees should be increased, it should be implemented in a reasonable and fair manner. By comparison, hackney licences, admittedly more restrictive than taxis, cost £1000 with a £100 annual renewal fee.
The current restrictions in taxi plate numbers, despite the growth in greater Dublin’s population has resulted in an anti-competitive, protected market which is not only contrary to free trade, but fails to meet the demand of those it is meant to serve. It is clear that new taxi plates must be issued.
The success of the hackney market, despite being restricted to base call fares, is in meeting demand which the taxi service cannot through lack of supply and a less dedicated approach to serving base calls. In effect, due to the current restrictions, hackneys have actually taken business from taxis, particularly corporate accounts which have grown with Dublin’s increased commercial activity during the period since the taxi market was regulated. However, simply allowing hackney’s to pick up from the street would only provide a quick fix solution. In order to meet current demands and expand the current taxi market, a much wider, long-term view must be taken.
While convinced of the need to radically restructure the taxi/hackney service, the Chamber favours an equitable solution which will benefit both the users and those who currently earn their living on providing the service. In the interests of fairness this balance must be met and those who have invested in the taxi service, through purchasing plates, should not be penalised for their efforts.
A solution lies in the experience of the road haulage industry. In 1978 - 1986 this industry was radically restructured in order to provide a less regulated and effective service. The strategy was a phased redundancy of operator owned licenses over an agreed period of time. At the end of this period, all licenses were revoked and new ones were issued with ownership remaining with the licensing authority. As part of the restructuring, each existing license was matched with a further six licenses during the phasing out period. This afforded license holders the opportunity to recoup their existing investment. Further, the different types of license, of which there were many at the time, were changed to one simple type. Initially the scheme met with resistance but its success is due to open negotiation and consultation between Government and road hauliers which allowed a fair and equitable solution to be made
In order that a long-term effective solution is found to the current situation, the Chamber proposes a complete restructuring of the current system. Based on the success of the road hauliers and the experience of other European cities, the Chamber proposes that the following measures are implemented.
The restriction of taxi licenses to 1974 since 1978, does not reflect the demands in Dublin which have arisen from such factors as the growth in population and disposable income, the increase in commercial activity and the unacceptability of drink driving. The deregulation of other industries in Ireland has shown that market forces not only self regulate numbers involved in that industry but provide opportunities for expanding the market. In response to the current restrictions on taxi plates the hackney market has grown to supply some of the demand not being met by the taxi service. However, this is not a solution to the problems of supply and quality of service. The current differentiation between taxis and hackneys is an outmoded inequitable and slightly ridiculous system which creates confusion and has the potential to lead to abuse. The deregulation of the industry will provide an even playing pitch. It will involve the initiation of a single license which will be awarded, without any restrictions on numbers, on qualitative criteria.
Free access into the taxi market would provide increased employment opportunities and with the implementation of training programmes could be particularly beneficial to long-term unemployed
The responsibility for taxis and hackney’s is divided between three bodies. The Minister for the Environment has overall responsibility for policy and making regulations under the Road Traffic Acts including the taximeter area and the fixing of maximum fares charged therein. Local authorities have the power to grant number of licenses and draw up taximeter areas. The Garda Commissioner is responsible for enforcing the above regulations and the inspection and verification of taximeters.
What is clear is that there is no central control. Responsibility is fragmented and it seems that this is one reason why the taxi situation has been allowed to reach the present untenable status. The establishment of the Office of the Director of Traffic in Dublin Corporation is welcomed and it is hoped that through liaison and monitoring, it will provide part of the solution to the current administrative fragmentation. However, in order to provide a long-term solution to the current crises, the Chamber recommends that an independent body, outside of political influence but responsible to Government, should be established. This organisation would take full responsibility for the taxi service and would liaise with representatives of local authorities, Garda Síochána, taxi and hackney representatives, commercial representatives and service users.
In order to find a fair solution for those who have invested in taxi plates, a phasing out period over a suggested three year duration would be implemented. During this period. each existing taxi plate holder would be issued with a second plate to allow them to recoup their initial investment. After the deadline, an unlimited amount of licenses would be available with open entry into the market.
Qualitative criteria for eligibility for licenses would be established. These would include tax clearance certificates where necessary, experience/knowledge. Annual renewal of licenses would be subject to controls of mileage and receipts.
In order to encourage higher standards, vehicle inspections would be necessary every six months with regular spot checks carried out either by inspectors employed by the independent body or the Garda Siocháná. Licence holders would uphold a passengers charter which would guarantee high service and standards to the user.
Taxis have tremendous potential as part of the public transport mix. An efficient taxi service can attract private car owners in ways which rail and bus services cannot. Taxis are immediate, i.e., there is no reliance on scheduling and therefore are geared towards customer needs. They are flexible, journeys are dictated by the customer from door to door. If we are serious about exploiting the potential of taxis and integrating them into the public transport network, further measures must be implemented.
Bus and rail services are heavily subsidised. Taxis should benefit from preferential rates. The effect of this should be used to encourage use of taxis rather than private transport, through the passing of benefits to the customer. The burden of providing a public service should not be on the licensee. The Chamber suggests that the following benefits should be introduced with the new license structure:
In order to make using taxis more attractive there are several measures which could be implemented.
The introduction of a selection of accepted vehicles would have the advantage of:
The current situation regarding peak time demand could be further alleviated through the extension of existing public transport services. The transport needs of Dublin’s citizens during such times as Thursday, Friday and Saturday nights, the Christmas period and large sporting and cultural events should be reflected in increased services. When the night bus service was first mooted, it was debated whether there was a demand for such a service. This, even with a service which does not pick up fares along the route, has been proved to meet a definite public need. This system should be further extended with late night darts and commuter trains.
In the meantime, there is a strong case for de-regulation of public bus routes after 11.30pm, through the granting of licences to private bus operators to provide services. At present, Dublin Bus has an effective monopoly on these services, but only provides a very limited service. The introduction of private bus operations after 11.30pm would alleviate the demand on taxis and contribute to the public transport solutions.
This paper outlines a means of restructuring the taxi service which would allow for its further integration into the public transport network, meet current and future public demands while also allowing for present taxi plate holders to recoup their investment.
The taxi and private hire vehicle situation has become intolerable. Past policies have created a situation where demand is not being met either on a quality or quantity basis. Further, the recent action by the taxi federations which held Dublin to ransom on election day, shows scant regard to the cities populace and was the last straw for many citizens. A solution must be implemented immediately, one that will consider future demand and needs of the greater Dublin region rather than providing a quick fix until the next crises.
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