OFT Report on Taxis: The Government’s
Response…
You will all no doubt
remember that the Office of Fair Trading
compiled a report on behalf of the
Government regarding the regulation of Taxis
and Private Hire in the UK. It is, of
course, important to remember that the
report focused on the taxi industry outside
London.
The
Government published their response on 18
March when Consumer Minister Gerry Sutcliffe
announced that the Government had rejected
the OFT’s key suggestions for radical
liberalisation of Britain’s taxi industry
and would merely tighten requirements for
councils. Although as I have stated, the
report focused on regulation outside London,
there are areas of importance to London and
the document does make for interesting
reading regarding the Government’s
thinking. Consequently I have endeavoured to
précis the salient points…
Competition
The Government
has agreed with the part of the report that
said consumers should enjoy the benefits of
competition within the Taxi market and
considered it to be detrimental to those
seeking entry to a market if it were
restricted. So HMG is strongly encouraging
all local authorities that still maintain
quantity restrictions, to remove those
restrictions as soon as possible.
No Governmental
Legislation
The Government also
believes that local authorities should be
given the opportunity to assess their own
needs rather than have legislation imposed
on them. However, they should publish and
ustify their reasons (if any) for
restricting the number of licences |
issued.
The response then went on to
add that they (the Government) agreed with the
OFT that quality standards have an extremely
important role to play in securing the safety
of the travelling public and that local
authorities should ensure the public are
provided with a high level of service.
But they
then went on to point out that these decisions
should still continue to be made by local
authorities and that there should be some
dialogue to ensure that there is scope for
more sharing of best practice.
Setting Taxi Fares
I am a little confused
with the final part of the document, which
states that where the local authorities set
Taxi fares, they should be a maximum. As the
OFT say, this is already the case in England
and Wales outside of London.
The Government agreed that the
situation in London should be clarified and
was grateful that the licensing authority for
the capital has agreed to make clear through
secondary measures, that fares set in London
are a maximum rather than mandatory as soon as
it is feasible to do so – but what on earth
does that mean? No doubt it is something we
will have to keep an eye on in the future.
As you can
see, the report was compiled by the OFT for
the Government but there will not be any
difference to the way in which we operate our
business in London. Fortunately, we all had
the opportunity to put forward our thoughts to
the OFT and they
obviously took notice
in regard to London. |
Zingo
I have just read the latest press release from
Manganese Bronze Holdings regarding the first
eighteen months of trading for one of their
subsidiaries, Zingo. There is no need for me
to inform you what Zingo actually does as I’m
sure that you are all well aware of their
function. However, I found it particularly
interesting to read that the company will now
be combined with LTI finance. Consequently,
the current MD of Zingo Mark Fawcett will be
standing down to be replaced by Michael
McRedmond who will lead the new Manganese
Bronze Services as MD.
As you
would expect, the Press Release explained how
Zingo had taken London by storm and how they
have changed the face of ordering a taxi by
telephone in London and that Zingo would
continue to go from strength to strength.
Well, all I can do is to congratulate them on
their success.
However, I felt it prudent to ‘poke’
the meringue to see if there was, in fact,
anything inside!
I obtained
a copy of Manganese Bronze Financial Results
and for the six months ending 31 January 2004,
MBH actually lost £1.9m and believe it or
not, Zingo – the same Zingo that has taken
London by storm - actually lost, yes lost
£2.5m in the same six months! It also appears
that Zingo are still losing £250,000 per
month.
After
reading the above, it becomes fairly apparent
why the merger has taken place, it is
obviously a cost-cutting exercise. So if being
successful is losing £2.5m in six months, I
just wonder how should Dial-a-Cab be referred
to?
Brian Rice
Chairman
Dial-a-Cab |
