How did you quash the 2000 Puppy Dog Model? That seems to be the current catch phrase around the US, meaning that there are many indians but no chiefs.
Actually, if we think about for a bit, the 2,000 Puppy Dog Model (2kPDM) is very much alive and very much the opposite. All are chiefs! Remember, an I/C is exactly that - independent, president of his own one-person or one-vehicle company. An I/C is free to do or not. It's basically a situation where everybody is a boss, with nobody in charge. Consistency of service is a myth.
Each of these I/C's has already paid the price to get behind the wheel. The pressure is on to recover not only the lease payment, but also something to bring home to feed the kids. In such an environment, a city cannot possibly be served well. Many residential districts will not be served at all, except by phone reservation.
Each I/C, basically free to roam, is certain to focus attention on those parts of the city where customers are most likely to be found. And so also every other I/C, all converging on the same areas. The feeding frenzy analogy is not far from the truth.
Chicago is niaively issuing large numbers of new, additional licences, perceiving that by doing so, outlying residential districts will be better served. So long as I/C's are behind the wheel, full city service cannot and will not ever materialize. It is simply not realistic to expect an I/C to willingly go out to a remote residential district to sit and wait for customers to appear as if by magic.
Chicago's initiative would make a whole lot of sense if the industry was organized along more traditional pyramidal structure as it once was 'leventy-7 years ago. Drivers were employees, and the company organized itself to serve the city in most all areas. Those drivers in the more lucrative areas of the city effectively generate enough revenue to cross-subsidize the reduced revenue from drivers serving less lucrative areas.
The net effect for the owner of the taxicab company is a profitable business. The critical ingredient is that such company revenue is directly tied to the service provided to the paying customer. If service levels are great, the company will thrive and grow. If not, evaporation results.
This is quite contrary to the leasing/IC environment where the owner gets his guaranteed revenue up front regardless of the level of service provided by I/C drivers flying under his colours. Some large fleet owners do try to introduce some measure of performance standards, but they do so at risk of losing their driver I/C status if the feds perceive a questionable level of control.
A Co-Op type organization where a group of independent owner-operators band together to achieve economies of scale in administration and dispatch, is yet another story. The company is not in the taxicab business, it is in the dispatch business, as most likely reflected in its income tax return and articles of incorporation.
In a Co-Op type organization structure, the 2,000 Puppy Dog Model rules supreme. Each and every shareholder is an I/C and each and every off-shift driver is most often also an I/C. The combination all too often results in a rather unruly array of puppy dogs.
I have never disagreed that in many circumstances leasing is certainly good for the owner, and given a healthy relationship between the owner and the I/C, it can be good for the I/C also. However, from the viewpoint of a city's transportation infrastructure, it is not well served at all by the 2,000 Puppy Dog Model.
And certainly, the general public paying the fare in the back seat are all too often not well served at all. Ideally, a restoration of the more traditional company structure is highly desireable, but can it ever happen? Or have the tax laws and current economics made it impossible?
From an InterNet discussion 9 March 1998
Since you people keep referring to this 2000 puppy model, could someone please explain the full concept to those of us who have not seen it.
In the 2+ year history of TAXI-L, this issue emerges from time to time. Sometimes referred to as atomization. I am not the author of the term - 2,000 puppy dog model - but it does go a long way to describing the evolutionary direction the industry is taking.
'leventy-7 years ago, the industry was basically organized along traditional pyramidal organizational structure. A company, owned by an individual, owned a fleet of vehicles, held licences in its own name, employed its drivers, operated its own dispatch, often had its own body shop, gas pumps, and had a central focus of management direction, control and supervision.
Over time, driven largely by changes in the tax laws in both Canada and the USA, the pyramidal structure gradually disappeared in favour of leasing and the independent contractor. By leasing his plate/vehicle to an I/C, the licence holder escapes many of the high overhead costs associated with employee status.
But the price of escaping these high costs is the relinquishment of control over the I/C driver, who is basically free to do as he wishes out there.
As a consequence, where once the industry was a single market opportunity, with all resources focused on the paying passenger in the back seat, we now have 3 distinct markets at work out there, often at cross purposes.
We now have a market in licences which have accidentally acquired an artificial real property value. We have a market for licence holders leasing their plate for a fixed guaranteed revenue regardless of the quality of service to the passenger in the back seat. And we have a market for a real driver actually providing a personalized transportation service.
John Lanigan gave us a very fine analysis of this phenomena some 6-8 months ago, where he identified and documented these 3 distinct markets. Perhaps John could be persuaded to repost his analysis.
So, with 2,000 I/C's out there, it's a bit like turning loose 2,000 puppy dogs. But there's nobody out there to round them all up, to get them pulling together as a team, serving the general public with consistent high quality service.
The typical result is not unlike what happens when its feeding time for a bunch of puppy dogs. Think about for a minute. Sometimes referred to a feeding frenzy.
Since the licence holders work very hard to preserve the less costly I/C status, the central control is increasingly being left to the regulatory authority which is gradually becoming the personnel department for the industry. Something they are ill equipped for.
Unfortunately, the regulatory authority, being a creature of civic government, is budget driven, is not in command of its own destiny. All too often its resources are determined far more by central management accountants with very sharp pencils and well worn erasers.
When these budget controllers see the same number of licences being administered over a long period of time, there is a high probability of denial of budget increases for any reason. The simple fact of hugely expanded span of attention escapes the comprehension of those who have never experienced it.
The "2,000 puppy dog model" is not a derogatory term. It's just the way it is. Nobody has ever disputed that the I/C status can be beneficial to many individual drivers, and to many individual licence holders. But is it good for the industry? Is it good for the paying passenger in the back seat? Is it good for a city's local transportation infrastructure which often has difficulty understanding and dealing with the I/C phenomena?
Up on our web site, there is frequent discussion of this phenomena in a document that may be accessed by pointing your favorite browser to:
http://www.taxi-l.org/essays.htm
Seattle is one city trying hard to come to grips with atomization. Read about it in their report, also on our web site. Point your favorite browser to:
http://www.taxi-l.org/seat0396.htm
From an InterNet discussion 1 March 1998
Please accept my most sincere thanks and appreciation for all the kind words and thoughts that emerged in recent days to my plaintive appeal for reasons why TAXI-L should continue. Always nice to receive some positive feedback.
I also extend my apology for falling victim to the very thing I abhore - personally directed flaming. As most of you know, I never flame anybody publicly. That is, until now. I should not have done that and I do offer my sincere apology for letting my emotions get the better of me in a moment of offended passion.
That does not excuse me or anybody for venting criticism and frustration against some one person in particular. Such public criticism rarely ever serves any particular good. Over the years I've said it repeatedly that if we have something nice to say about someone, then shout it from the roof tops. But if something unpleasant, do so behind closed doors, one on one, and do so in less than one minute.
Within the array of observations emerging during the last couple days were a number worthy of repeat:
Getting Cabbies together is like herding cats.I am so glad to hear what other cab drivers opinions and how they do
their business. I'm glad to see the cab drivers all around the world.how many cabbies do you really believe get involved -- even at this
level -- with the external forces impacting their lives and their
livelihood?Everybody cusses "them" without any real grasp of who "they" are. The
little companies carp about the large companies, and the large ones
wonder why the little ones don't just go away. Cabbies wonder why
they have to adhere to all those regulations, and the regulators
wonder why cabbies don't just quietly obey the rules.you gravely under estimate the impact of taxi-l and your own quite
outstanding commitment to and impact on the welfare of taxi drivers.
Within the worldwide taxi industry, drivers do of course outnumber by a huge margin. So also within TAXI-L, open to all within the entire industry, it is inevitable that drivers will outnumber.
But TAXI-L is not *for* drivers. It is not *for* licence holders. It is not *for* taxi management. It is not *for* regulators. It is not *for* historians. It is not *for* any one particular segment of this industry.
TAXI-L is for all within this industry who are associated in some way, including interested users. It was never established as an open forum to air personal beefs, pet peeves, dirty laundry, personal criticisms, or direct attacks on any particular segment of the industry and/or its regulatory agencies. Such conduct should never, ever be condoned.
TAXI-L is for reasoned, respectful discussion among and by all participants, with due respect for all. None of us ever promised we would be infallible, an impossibility. But, please remember that within our worldwide group, there are many among us who might be offended by critical remarks, likely unintended, but a fact of life result.
We have much to learn from one another, and much to understand about one another. It is unfortunate this industry is not a single cohesive industry, operating under a single focus of management, direction, control and supervision. John Lanigan analysed and documented this phenomena rather well a few months back.
The 2,000 puppy dog model continues to thrive and multiply. I have never disputed that within this model, individual drivers can sometimes benefit. But is it good for the industry? Is this model good for the paying customer in the back seat? What business is this industry in?
Is this industry in the business of protecting artificial licence values? Is it in the car rental business with fixed, guaranteed revenues regardless of the quality of the service provided to the paying passenger in the back seat? Or is it in the business of actually providing a personalized transportation service to general public.
If indeed the latter, as we so often say we are, then why do we expend huge resources on those things that do not contribute to the principle purpose of our existence? What needs to be done to focus industry wide attention, resources and commitment on the real purpose of the whole of the industry - the paying passenger in the back seat.
I'll ask it again, "What needs to be done to make it fashionable once again to take a taxi?"
That of course begs another question, "Why is it not fashionable today to take a taxi?" It once was; just look at our historical literature painting a glamorous, honorable picture of this unique industry.
The bleak picture I perceive and paint is of course not universal. There are some among us who do try hard to focus management attention on the paying passenger as the principle reason for their existence, and they are to be commended. Unfortunately, they are in a minority and they need all the support they can get in the face of colleagues who do not think likewise.
We have seen far too many reports in news and elsewhere of the severe fragmentation, atomization, and hostility within this industry. One wonders how it is that the paying passenger in the back seat gets any positive attention at all. If we are ever to make it fashionable to once again take a taxi, then that paying passenger must be the single focus of positive attention.
From an InterNet discussion 21 February 1998
It has been asked just what is "atomization" of the taxicab industry?
'leventy-7 years ago, this unique industry was typically organized along traditional corporate models. The company owned the vehicles, held the licences in its own name, employed, trained, supervised, rewarded the drivers, etc. The regulatory authority had only to deal with a handful of strong business managers and his span of attention was quite reasonable and tolerable.
Leasing and the ubiquitous independent contractor have crept into the industry over time. As a consequence of inattention back in antiquity, organization of the regulatory authority has not kept pace with this evolutionary development. All too often the regulatory authority is still staffed as if the "good olde days" were still in place.
Cliff is absolutely correct in his observation that regulatory authorities can't handle talking to a vast array of independent owner-operators, each a president of his own company, each correctly perceiving he has the right to consume the time of the regulatory authority at his convenience.
Atomization is the consequence of an evolutionary process whereby an industry once organized along traditional corporate pyramidal structure, has devolved down into a flat organizational structure whereby everybody is a boss but nobody is in charge. Where at one time a regulatory authority's span of attention was with a handful of strong business managers, it has dramatically cascaded and subdivided down into a huge array of independent contractors.
I've seen this movie and can speak from harsh experience. My day was typically filled with relentless fire-fighting, trying to deal with countless one-on-one situations. My workload typically ballooned into a horrific 16 hour day, 6 days a week, simply because I was unable to do during open office hours the things my job description called for. These things only got attended to after hours and weekends.
The tragedy of this situation is that even if the regulatory authority had been alert and attempted to develop an organizational structure in synch with evolution of the industry, severe impediments emerged from the folks controlling his budget. Most regulatory authorities are not in control of their own destiny. Far too often, they are managed to death by central ivory tower bookkeepers, auditors, analysts, committees, et al, driven by a well known force known as, "We shall have economy, no matter what the cost!".
As the industry devolved into an atomized organizational structure with a huge array of bosses under little if any central focus of direction and leadership, numerous "incidents" started emerging. Far too often, little was done by the industry to endear itself to civic administration, which began to see the industry as a problem that just won't go away.
It was absolutely predictable that under this typical set of circumstances, regulatory authorities would dig in their heels and require the local industry to organize itself and speak collectively through designated representatives. It was otherwise becoming impossible for them to do their job.
Seattle is one of the few regulatory jurisdictions attempting to grapple with this situation by putting into place an array of regulations that basically is requiring the industry to rebuild itself back into some form of modest pyramidal organizational structure. It is not an easy task for anybody. Everybody is feeling pain in this process.
It is inevitable that in most municipalities, the regulatory authorities and their political masters will eventually throw up their hands in abject frustration and impose legislation and regulations aimed at restoring some measure of centralized leadership and direction. The phenomena of atomization is leading this once proud industry into an eventual path of self-destruction.
Step back and think about it. While there is no question that atomization has been widely beneficial to many individual owner-operators, is it beneficial to the industry? Is it beneficial to the travelling public? Is is beneficial to have a situation characterized by large numbers of bosses without any really significant central focus of leadership and direction? The 2,000 puppy dog model would seem to apply.
From an InterNet discussion 25 November 1997
In common law, a taxicab business permit authorizes operation of a taxicab as a vehicle for hire service. The implicit critical ingredient within that authority is 'service'. It's really quite simple - the revenues generated by that authority must bear a direct relationship to the quality of service provided. If service is poor, revenues will be correspondingly poor. If service excellence dominates, then revenues will increase.
This fundamental principle of common law falls apart if the regulatory environment allows leasing and licence value speculation, albeit by official government inattention back in antiquity.
The leasing environment basically fosters a situation where the revenues generated by the permit are virtually fixed and guaranteed regardless of the service level. This is fundamentally wrong and in total defiance of common law and common sense.
A 'company' authorized to provide a vehicle for hire service to the general public can and should measure demand, service levels and market opportunities; acquire, maintain and dispatch sufficient vehicles to meet variable demands according to calendar and events. A company can set standards, train its drivers to provide consistent service levels; monitor, discipline and reward its drivers, advertise and market its services, build and maintain a consistent image and status, expand its market base, and make it fashionable to take a taxi.
Single vehicle independent owner operators tend to benefit from the freedom and opportunities of operating a small business. They are free to operate when they want to, provide service levels of individual choice, market their service as best they can, and expand their service base as best they can.
A Co-Op is still nothing more than a collection of single vehicle independent owner operators who have banded together to make possible some economies of scale in dispatch and administrative support services. Individual owners, and in some cases, individual drivers, do enjoy some benefits of a Co-Op organizational environment.
Unfortunately, the Co-Op tends to suffer from a number of serious shortcomings, particularly if leasing, and in some cases cascading sub-leasing is allowed to flourish; a leadership vacuum as it suffers from far too frequent annual Board of Director changes; and daily horrific internal interference with daily administrative practices. There are just too many bosses, each owning a piece of the company, each perceiving an imbedded right to give direction, reward and discipline.
Both Co-Ops and individual owner operators, in the eyes of the general public they purport to serve, suffer from a profound flaw. Everybody is a boss, but all too often, nobody is in charge. Who's in charge should not ever be a mystery. Not unlike sending thousands of puppy dogs out there on the streets with nobody out there to round them all up and getting them all pulling in a common direction consistent with service excellence expectations.
This fosters an atomization of the industry making it virtually impossible for anybody to supervise or regulate. No regulatory agency can ever have enough resources to effectively carry out all the supervision necessary to achieve some minimum service level standard.
Suppliers are understandably reluctant to try to do business with the taxicab industry if the dominant organizational structure is one of individual owner operators. When dealing with a company which owns and operates a fleet, decision makers are few and impact on the marketing effort tolerable. It must be an absolute nightmare for suppliers to try to do business with thousands of individual owner operators, particularly where costly leading edge technology is the target product or service.
The travelling customer must be the focus of attention. Revenues must reflect service levels. Economies of scale in administration, dispatch, driver safety, driver training, marketing, advertising, image and status and the entire array of elements that make the taxi industry work are best served in a traditional 'company' type structure where the vehicles are all owned by the company, drivers are employed, and licence transfer is prohibited.
The customer must be the travelling public, not some intermediate structure isolating and insulating the permit holder from the ultimate customer. The purpose, spirit and intent of a permit is to facilitate a personalized transportation service to the general public. The revenue stream starts with the paying customer in the back seat, and all efforts of the total company must focus squarely on that single market opportunity.
I do not dispute that there are individual benefits to various elements of the industry from each organizational structure, but on balance I believe a traditional 'company' organizational structure, owning the vehicles, employing the drivers,measuring the demand, marketing the service, all these good things, is most appropriate to best serve the intent of a taxicab business permit, and best serve the travelling public in the provision of a critically important element in the local transportation infrastructure.
Anything else defeats the purpose, spirit and intent of a permit, and fails the test of service excellence in the eyes of the paying passenger in the back seat.
From an InterNet discussion 9 November 1997
As a consequence of regulatory inattention back in antiquity, we have today in most regions of the world where taxi industry has a market for licences, a market for customers, and market for drivers. My real concern with this situation is not so much what we have in reality, but what I believe we should have - a single market of travelling customers.
The cash flow begins with the customer and that is what the taxicab business licence is issued for. It was never intended nor even perceived that one day a single taxicab business licence would one day evolve into three separate and distinct markets, operating largely independently of one another to the detriment of the paying customer.
I do not disagree that my perception of this perfect world is tantamount to tilting at windmills, but I would like to think that the worldwide taxi industry will one day begin a painfull migratory process back to a traditional corporate organizational structure aimed at a single market opportunity - service excellence in personalized transportation with total company efforts focused on the paying customer in the back seat.
What is needed is an overhauled regulatory environment aimed at consistently high quality customer service. By imposing entry standards, the result is in effect a barrier. Frankly, I'm both puzzled and delighted to note that "The Knowledge" (in London, England) continues to be a requirement in the face of what must be enormous pressure to terminate or at very least minimize, as we see in most every other city worldwide.
London appears to stand alone in sustaining this requirement of outstanding knowledge and skill, where most every other city worldwide has capitulated. Compare the reality of a 2 year minimum training program (The Knowledge) against a modest couple weeks at best in most every other city.
I'm very much in favor of imposing standards of excellence in all aspects of this industry rather than simply limiting entry by the easy-to-administer quota system. I really believe that anyone who wishes to get into this industry may do so, so long as these standards of excellence are satisfied. This industry should not ever be perceived as an employer of last resort.
From an InterNet discussion 17 September 1997
The issue of censorship is difficult when dealing with the InterNet which basically knows no boundaries. In theory, it someone in the USA speaking out on sensitive local issues should have the freedom to do so, regardless of where the information is stored, more so if stored on a database in another country.
Unfortunately, the reality is that any site on the InterNet is locally accessible by anybody anywhere. TAXI-L (physically based in Canada) had a case about a year ago when a participant in the USA spoke out on a local issue and subsequently lost his job because the management of his taxicab company took offense at his remarks.
Similarly, at least two regulators on TAXI-L, one in the USA and the other in Australia, have been similarly censured for their contributions to discussions on sensitive issues. One lost his job. Although we continue to have a number of regulators on our mailing list, all have basically been issued gag orders by their political masters.
This is fundamentally wrong, but the reality is that no matter where the information is stored, accessibility is truly unfettered. Legally, the author is protected from court action relative to removal of the information, but is not protected by the wrath of those who have local authority and control.
Emulation of constructive dialogue behind closed doors is something that the InterNet does very poorly, for it leaves behind the equivalent of an audit trail. Things people say verbally behind closed doors stays there. Things people say on the InterNet leaves behind a permanent record in archives which can come back to haunt us.
When I travel occasionally, I try to visit local taxicab companies and sample local service. On one such trip some months ago, I noted on a large bulletin board in this company's internal watering hole a number of documents pinned on it that were extracts from contributions by TAXI-L participants. Some were outspoken comments on sensitive issues. I can easily imagine that a similar situation exists worldwide.
It is a sad commentary that the worldwide guarantees of constructive free speech can inadvertently cause much local heartburn for contributors who are not bulletproof. Most have jobs and families that need protection. There aren't many of us who can speak out freely to a worldwide audience without suffering local negative consequences.
From an InterNet discussion 5 September 1997
In common law, a taxicab business permit authorizes operation of a taxicab as a vehicle for hire service. The critical ingredient in that authority is 'service'. It's really quite simple - the revenues generated by that authority must bear a direct relationship to the quality of service provided. If service is poor, revenues will be correspondingly poor. If service excellence dominates, then revenues will increase.
This fundamental principle of common law falls apart if the regulatory environment allows leasing and licence value speculation, albeit by official government inattention back in antiquity. The leasing environment basically fosters a situation where the revenues generated by the permit are virtually fixed and guaranteed regardless of the service level. This is fundamentally wrong.
A 'company' authorized to provide a vehicle for hire service to the general public can and should, in theory, measure demand, service levels, and market opportunities; acquire, maintain and dispatch sufficient vehicles to meet variable demands according to calendar and events. A company can set standards, train its drivers to provide consistent service levels; monitor, discipline and reward its drivers, advertise and market its services, build and maintain a consistent image and status, expand its market base, and make it fashionable to take a taxi.
In theory, single vehicle independent owner operators benefit from the freedom and opportunities of operating a small business. They are free to operate when they want to, provide service levels of individual choice, market their service as best they can, and expand their service base as best they can.
In theory, a Co-Op is still nothing more than a collection of single vehicle independent owner operators who have banded together to make possible some economies of scale in dispatch and administrative support services. Individual owners, and in some cases, individual drivers, do enjoy some benefits of a Co-Op organizational environment.
Unfortunately, the Co-Op tends to suffer from a number of serious shortcomings, particularly if leasing, and in some cases cascading sub-leasing is allowed to flourish; a leadership vacuum as it suffers from far too frequent annual B of D changes; and daily horrific internal interference with daily administrative practices.
Both Co-Ops and individual owner operators, in the eyes of the general public they purport to serve, suffer from a profound flaw. Everybody is a boss, but all too often, nobody is in charge. Who's in charge should not ever be a mystery. Not unlike sending thousands of puppy dogs out there on the streets with nobody out there to round them all up and getting them all pulling in a common direction consistent with service excellence expectations.
This fosters an atomization of the industry making it virtually impossible for anybody to supervise or regulate. No company or regulatory agency can ever have enough resources to effectively carry out all the supervision necessary to achieve some minimum service level standard.
Suppliers are understandably reluctant to try to do business with the taxicab industry if the dominant organizational structure is one of individual owner operators. When dealing with a company which owns and operates a fleet, decision makers are few and impact on the marketing effort tolerable. It must be an absolute nightmare for suppliers to try to do business with thousands of individual owner operators, particularly where costly leading edge technology is the target.
The travelling customer must be the focus of attention. Revenues must reflect service levels. Economies of scale in administration, dispatch, driver safety, driver training, marketing, advertising, image and status and the entire array of elements that make the taxi industry work are best served in a 'company' type structure where the vehicles are all owned by the company, drivers are employed, and licence transfer is prohibited.
The customer must be the travelling public, not some intermediate structure isolating and insulating the permit holder from the ultimate customer. The purpose, spirit and intent of a permit is to facilitate a personalized transportation service to the general public.
I do not dispute that there are individual benefits to various elements of the industry from each organizational structure, but on balance I favor the traditional 'company' organizational structure as being most appropriate to best serve the intent of a taxicab business permit; best extablish highly desireable central focus of management, supervision and control; and best serve the travelling public in the provision of a critically important element in the local transportation infrastructure.
From an InterNet discussion 2 September 1997
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