To the Right Honourable the Lord Mayor,

Aldermen and Members of the City Council

 Report Number 353/2001 : Proposed Fare Increases for Dublin Taximeter Area

 30 October 2001

1. Background

Following a meeting of the Joint Taxi/Hackney Committee of the four Dublin authorities on 10 April 2001 it was agreed that a major review of the taxi/hackney sector in the Dublin Taximeter Area would be carried out. Goodbody Economic Consultants were commissioned to undertake this review.

 On 18 October 2001 the Committee considered an interim report prepared by Goodbody Economic Consultants entitled ‘Study of the Impact of Liberalisation on the Dublin Taxi Market’.  The Report contains the interim findings of the consultants on the impact of liberalisation. It also contains detailed consideration of taxi fares and proposals for an increase in fares. The fare issue needs to be addressed because fares have been unchanged since 1998 and because the current fare structure cannot accommodate the required conversion to euros from 1 January 2002.

2. Main Findings Regarding the Impact of Liberalisation

 Since deregulation of entry into the taxi market in November 2000 the number of taxis operating in Dublin has risen from 2,722 to just over 6,500. Average weekly demand for new licences is currently running at approximately 40 per week.

 The main conclusions presented in the interim report in relation to the impact of deregulation are as follows:

·               The frequency of cab (i.e. taxi and hackney) use has increased over the period, with 49% of cab users making a cab trip at least once a week, as against 39% in 1997.

·               Cab use is mainly for social and recreational purposes (65%); business use is relatively low. The situation is unchanged since 1997.

·               Over 58% of cab trips occur on a Friday or Saturday, rising to over 71% if Thursday is included.

·               Demand for cabs is heavily concentrated in the midnight to 9a.m. period (43% of trips) and again from 6p.m. to 9p.m. (19 per cent of trips). Teenagers and young adults make over half (52%) of their trips in the post-midnight period.

·               The distribution of trips by trip distance was very similar to that of 1997. In both years, almost 50% of trips were less than 5 miles in distance. There is some evidence, however, that the longer trips are becoming more prevalent. One third of trips are in excess of 7 miles compared to 21% in 1997.

·               Cab occupancy levels are relatively high. Two thirds of all cab trips have more than one passenger. Cab sharing is highest among young users. Nearly three-quarters of cab trips by 15 to 24 year-olds have more than one passenger.

·               Only 9% of consumers disagreed with the view that cabs are easily available at peak periods. However, this is an increase of 4 percentage points on the 1997 figure. In contrast, there is an increase in the proportion of consumers agreeing strongly that cabs are easily available, from 13% in 1997 to 18% in 2001. Thus, there are mixed views as to whether availability at peak times has improved overall.

·               In 2001, 48% of persons waited for less than five minutes, a considerable improvement compared to 25% in 1997. The scale of the average reduction in waiting is relatively small, with the largest shift being in the numbers having to wait 5 to 10 minutes.

·               Just under half of all taxi users considered that the service has improved, with only a small minority of 5% indicating that the service had disimproved. However, business users were less convinced that services had improved: only 16% detected an improvement.

·               Businesses are finding it more difficult to get cabs, with the proportion reporting no difficulties falling from 30% per cent to 19%. Almost all of the disimprovement relates to the 4p.m. to 6p.m. period, with the proportion reporting difficulties rising from 46% to 60%.

·               Over two-thirds of people surveyed believe that deregulation was a good idea, with 14%disagreeing.

·               Over half of all cab users consider that they are getting good vale, with 30% taking the opposite view. Fewer users now perceive cabs to be bad value compared to 1997.

·               For cab users in general, reduced waiting times is the most important factor in promoting cab use (26% of users) followed by availability and price (20%). For business users, cheaper fares are less important, ranking after waiting times and availability.

The results of all the survey work undertaken as part of the review of the impact deregulation, including the results of the rank surveys, will be available in November and Goodbody Economic Consultants will present their final report to the Joint Taxi /Hackney Committee in early December.

3. Main Findings Regarding Taxi Fares

 The main findings in the Goodbody report in relation to taxi fares are set out below

 ·               Hiring charges in Dublin are commensurate with levels in other major cities but journey length charges are lower. This has the effect of making all journeys except for very short ones far cheaper in Dublin than other major cities.

·               Additional charges for the extra passengers and luggage are higher in Dublin with many cities authorities not permitting such charges.

·               Night time charges in Dublin are far lower. In cases where an additional fixed charge is permitted for unsocial hours, Dublin charges are also at the lower end of the scale.

·               Other city authorities also permit a soiling charge and the Dublin charge is in line.

·               Many UK cities have a distance charge whereby, after a certain distance, the mileage rate increases by an average of 20%.

·               Overall costs for the taxi drivers have risen 10.5% since 1998. A comparison of costs in August 2001 and 1998 is set out in the table below:

In preparing their proposals for a fare increase the Consultants concluded that taxi drivers should be compensated for increases in costs since the last fare rise in 1998. They suggested that taxi fares should also be structured to ensure an adequate supply of taxis at all times. (They noted that at present there are supply problems during the periods of peak congestion, after midnight and for lengthy journeys where there is little prospect of a return fare.) With regard to the overall fare level, this means that it should be set so as to ensure that people enter the trade in sufficient numbers to ensure adequate supply. This in turn means that the financial return from taxi operation must be in line with that from competing occupations. One means of achieving this is to ensure that there is a broad correspondence between the return to taxi driving and average industrial earnings and that taxi drivers do not have to work excessive hours to earn a reasonable income. Finally, they noted that there is scope for further progress in simplifying the fare structure.

To address the issue of supply in congested conditions, they proposed that the time based charge be increased very significantly (i.e. from €11.43 (£9) to €18 (£14) per hour). With regard to the issue of night time service, they proposed that an increased mileage charge would operate at night time (i.e. between 10p.m. and 8a.m.) on Sundays and on public holidays. With regard to simplicity of the fare structure, the Consultants recommended that the general approach should be to abolish elements of the structure that do not have an economic rationale. They noted that the luggage charge was high and over complicated and they proposed that it should be confined to a maximum of two additional pieces of luggage. This represents a compromise on the last taxi fare increase proposal, which provided for the complete abolition of the luggage charge. Other existing standing charges for pick-up, by telephone /radio, for additional passenger, for airport pickup and soiling remain unchanged.

4. Proposed Taxi Fare Structure From 1 January 2002

The report recommends a new fare structure in euros which, if agreed by the elected members of the four Authorities will come into be effect from 1st January 2002. A comparison of the new fare structure and the existing fare structure in euros is set out in the table on the next page.

A comparison of taxi fares for different journeys is set out in the table below:

5. Proposed Interim Taxi Fare Increase from 1 December 2001

It is further proposed that an interim increase of £0.80 per journey be granted to the industry with effect from 1^st December 2001 pending conversion of meters to be euro compliant and changed to take account of new fare charge from 1^st January 2002. The impact of this increase is set our in the table below:

The Joint Taxi/Hackney Committee recommended that these proposals be placed before the four local authorities.

 If approved the additional £0.80 journey charge will be effective from 1^st December 2001 with the new fare structure as proposed coming into effect from 1^st January 2002 as meters are recalibrated to operate in euros.