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Who Me? Do Something? (Hargreaves on Taxis)

By johnboy 10 April 2007 10

Taxis in Canberra are a messy business because the ACT government chooses (with dubious legallity) to use the auction of taxi licences for revenue raising rather than simply recovering their costs. Artificial scarcity is used to keep prices high and taxis expensive and hard to find at peak periods.

Despite having already disastrously screwed the operation of the market the ABC reports that John Hargreaves is refusing to intervene and allow the new taxi player in the Canberra market, CabXpress, to give surplus jobs to Canberra Cabs.

Canberra Cabs of course is hoping that a public utterly disgusted with their own performance will swamp the fledgling service.

One might think that the public would want this basic overflow provision if we’re going to have multiple service providers, one might even think a prudent Government would have put it in place before bringing the competitor in.

But this is Canberra.

If you want to give CabXpress a go, their number is 6260 6011.

UPDATED: It gets better! The ABC reports that after years of inaction the Government is going to get tough on taxi standards, oddly enough at time when there’s a new player trying to establish itself for the first time.

What’s Your opinion?

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10 Responses to
Who Me? Do Something? (Hargreaves on Taxis)
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jemmy 9:10 am 12 Apr 07

What about a system like in London? I reckon a two-tier cab system is perfect for Canberra. Mini-cabs would be the equivalent of temporary casual staff.

Mini-cabs would cater for the peak-hour fluctuations and the regular cabs would handle the base load. Mini-cab prices would be set higher so that the regular cab operator is guaranteed of some income and so doesn’t leave the market. Mini-cab licences would be set cheap to allow easy entry and exit for operators. With cheap licences and high fares, you’d get the opportunity and incentive for some drivers to provide a real quality service.

jacross 4:54 pm 11 Apr 07

Oh I forgot to say that although prices would and should increase during periods of high demand, the absence of the Government lording over the taxi industry would mean greater competition. Greater competition between companies would flatten the prices as they race to equilibrium.

jacross 4:51 pm 11 Apr 07

I’m sure that would happen Caf, and I think it makes absolute sense.

A completely deregulated, free market would deliver to us a taxi utopia. The reason why the Government persists with Cab licenses is because despite the marketing, Governments are not in the business of high quality service provision.

johnboy 1:43 pm 11 Apr 07

Price regulation is a separate issue.

caf 1:11 pm 11 Apr 07

I’m not sure, that’s why I was asking – I guess I assumed that a policy that seems almost universally adopted would be that way for a reason.

The only one I can think of is that the big fluctuations in demand over the course of a day would mean that a completely deregulated taxi market would see fares at almost zero during the low-demand periods, rising to massively high levels during the high-demand periods (like the prices in the electricity spot market).

johnboy 12:14 pm 11 Apr 07

Name one?

caf 12:12 pm 11 Apr 07

There are, however, public policy reasons why the number of taxi licenses is kept limited, are there not? It’s not like the ACT is unusual in this regard.

la mente torbida 8:33 am 11 Apr 07

Interesting to note that, as a monopoly, Aerial foisted upon us what was probably a hideously expensive voice-recognition booking system. Yet this state of the art system cannot handle simple business-to-business web transactions.

CabXpress just need to make sure they are very honest as to waiting times, so that if they are swamped the public realises what is going on.

seepi 11:02 pm 10 Apr 07

I hear that aerial are now introducing a real person option to their booking system. Very coincidental timing, after they’ve insisted so loudly that the voice recognition system is fantastic.

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