New changes could make taxi situation even worse…

Have you ever tried to get a taxi on a night out lately? They are as rare as hen’s teeth. Rather than do something constructive to address the problem, the Department for Infrastructure will worsen the situation with new legislation. From Clodagh Rice at the BBC:

Taxi operators have warned proposed licensing changes in Northern Ireland could have a “devastating” impact on the industry.

It comes after a Department for Infrastructure proposal to change taxi operators’ licensing regulations.

This follows court cases in England and Wales.

One of the implications of the proposals could be a 20% increase on average fare prices.

Stephen Anton from Fonacab, representing the Licensed Taxi Operators’ Association, told a Stormont committee there was a lack of understanding of the implications the proposals could have locally, which would mean higher prices and potential closures.

“If implemented, this could increase taxi fares by 20% and prevent those who are most in need from accessing taxi services,” he said.

“This also has the potential to close many operators down permanently.”

The committee heard that in 2014 there were 16,000 taxi licences, by 2021 that number had fallen to 8,500 and by December 2023 it was down to 7,500.

Mr Anton said that was the number of licences rather than the number of active drivers, which in January was estimated at about 5,000 drivers – a figure he said should be about 50% higher.

He said the proposed legal changes would result in taxi operators or drivers who have total annual fares of £90,000 or above having to charge VAT on all bookings.

“We have lost 50% of our drivers since Covid-19 and we have never recovered from that,” she said.

She added she found it difficult to keep drivers in the industry – with all of them over the age of 60, including her father who is 75 – and she warned further changes would be “devastating”.

“If this VAT element comes in, that will definitely call it a day,” she told the committee.

In July 2023, the UK High Court ruled in favour of Uber UK, which was seeking to oblige all private taxi operators to charge 20% VAT on their rides. This was after Uber was hit with a massive VAT bill of nearly a billion. Uber is saying that if they need to pay VAT, then so should other taxi companies, and this is the issue for other firms.

It seems that a few issues are going on here. The main one is the change in usage patterns. Taxis are most busy on Friday and Saturday nights; during the week, they can be quiet. They need to change the rules to make it easier for people to work part-time as taxi drivers. You can’t expect people to be full-time taxi drivers when you really only need them for 4 hours on Saturday nights.

I personally think there are too many barriers to entry, and costs are too high. Let’s face it, it is not the most complicated job in the world. You just need to bring someone from A to B safely. In other parts of the world, there is no shortage of Ubers and other systems. I was astonished when I was in London last year and booked an Uber; it was there in 2 minutes.

Here, the big local oligopoly firms understandably do what they can to block Uber’s entrance into the market, and the department facilitates this with its ineptitude.

I do see Uber’s downside. They take quite a massive cut of drivers’ fees, and there is the issue that when they dominate a market, it is bad for competition.

Here is my idea of how to fix the problem.

DFI work with one of our local tech firms to produce their own taxi app. It would have a fixed rate commission to cover running costs. Drivers are independent and can work as little or as many hours as they like. With no middlemen or depot rents, the drivers make more money, and everyone is happy.

The downside of this proposal is local mega operators will go ape sh*te to block it.

Instead, the most realistic scenario is DFI will do f*ck all, and the taxi situation just gets worse. The nighttime economy declines, more entertainment venues and pubs will close, there will be lower rates income for the councils, tourism will suffer, etc.

But on the plus side people like me are discovering it is less hassle to just drive into the town and don’t drink. You get to bed early and wake up with a clear head. Sure the bar owner does not make much on my fizzy waters but such is live.

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