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Is the end in sight for the Canberra Cabs monopoly?

By johnboy - 5 March 2006 24

The Canberra Times (who have an excellent amount of interesting local stories this Sunday) have a good story by Markus Mannheim on plans to fine the generally unloved Canberra Cabs if their services don’t improve.

Canberra Cabs defence of itself is really quite amusing…

Canberra Cabs chief executive Mark Bramston attributed the recent problems to chronic staff shortages, unprecedented demand, a difficult roll-out of new technologies, and ongoing roadwork on Kings Avenue, which has impeded traffic from the airport.

Difficult new technologies? Meaning they stuffed up? And the Kings Avenue roadworks which I cross every evening in rush hour seems to be going quite smoothly to me. But wait, it gets better.

But he defended the company’s service record, saying it processed more than 200,000 jobs a month and had a complaint rate of just 0.02 per cent.

And how are we to make our complaints, wait for hours on hold? If .02% are putting pen to paper and writing a letter then we can only wonder how many are quietly seething.

He said the company was investing in new technology to help cope with peak workloads, but had struggled to recruit enough staff for its call centre

Sounds like a clear cut case of failure by management.

Most delays were because the growing use of mobile phones and phones that withheld their numbers, which could not utilise the automated booking system, he said.

Hmm, that one’s only been coming for 20 years.

Mr Bramston also claimed impatient customers had contributed to the system gridlock by double booking jobs.

Ah, right. It’s the customers to blame. The customers of which only .02% are unhappy, because they’re so overjoyed with the dealings with Canberra Cabs that they want to call up again!

Apparently rather than bringing in competition (as Steve Pratt rather sensibly suggests) the government is looking to hit Canberra Cabs with fines. An interesting approach when the company appears to be suffering from under-investment.

The ABC is also covering the Steve Pratt plan. Competition isn’t the only answer however, the taxi licence fees might be a great little earner for the government, but they’re always going to cripple the service given to the public at their current rate.

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24 Responses to
Is the end in sight for the Canberra Cabs monopoly?
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wagga_wagga 8:55 am 18 Nov 06

Trying another operator is a useful trial. If someone wants to take the risk.

However with banks you only end up with oligopoly where they all charge fees and cut services in tandum.

Also I remember Compass airlines finding it unrealistic to compete in a market that is a natural monopoly.

However by merely increasing the presence of Queanbeyan cabs, you are getting existing cabs, entering our market much cheaper – they have already paid their startup costs. The cost of having a Queanbeyan cab in Canberra is in effect their marginal cost.

The problem is not the number of cabs, but rather there is no market mechanism to ensure they cover all of the demand. Cabs tend to congregate where prospective fares are maximised. Other passengers get serviced only when convenient.

Canberra cabs would want the issue to dealt with by introduction of another full competitor, as they would feel quite confident of killing them off relatively quickly. However they do not want alternative supply of car services from existing alternatives such as Queanbeyan, ACTION, hire cars or ComCar.

ant 8:34 am 18 Nov 06

Sunday Canberra Times: I like the sunday paper, it’s the only CT I’ll bother reading.

Taxi mob: typical defensive whiney response you get from too many Australian businesses, blaming the customer and pulling in red herrings. What Kings Ave roadworks? I battle through the airport traffic mess twice a day and the mess is generated BY the airport and BBP. Roadworks my arse.

Action buses: they cut out the airport bus in 78. And there is some kind of funny-looking bus, isn’t there? Maybe they need a few more buses, and smaller ones to make more frequent runs.

Open it up to Qbn Cabs, at least they don’t go around tailgating everyone.

shauno 2:15 am 18 Nov 06

Look that argument doesn’t wash.

Its not up to the govt to decide on the market potential for taxi services. Let private enterprise sort that one out by almost total deregulation minus the obvious HSE matters or should say OH&S in aussie.

Anyway I have it on good authority that there is in fact another operator about to open up in Canberra after the Jan slow down period so FEB March i think.

wagga_wagga 10:30 pm 17 Nov 06

Simple competition will not solve Canberra’s taxi problem as, unfortunately, the size of the market makes it a natural monopoly. Also as we want high quality taxi cars, entry capital requirements are high.

However regulated competition, for example allowing Queanbeyan greater access to Canberra trips and radio services, within chosen times, plus routing ACTION right to the terminal building may be worth experimenting with.

Maybe temporary daytime only or night-time only plates could help adjust the market. This could provide cheap entry for new entrants as the permancy premium would be wiped-out.

I have seen acres of taxis piled up at the airport because the average ditance from there is high. Taxi’s tend to avoid suburban zones if trips are shorter.

Maybe the government could regulate fares so that all taxi departures from the airport are at a lower tariff. This may reduce the airport servicing syndrome.

The current service for disabled passengers is just appalling, and many disabled people are on low incomes. They will always need a subsidised service.

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