20
Experiences with regulatory changes in the taxi industry Jon-Terje Bekken Institute of Transport Economic Norway [email protected] www.toi.no Thredbo 9, Lisbon
Experiences with regulatory changes in the taxi industry
Jon-Terje BekkenInstitute of Transport Economic
Norway
Thredbo 9, Lisbon
2
Conceptual framework
• Different market segments– Taxi ranks, hailing, telephone-booking, contracts– Also different size between cities and countries
• Different market organisation and competition– PHVs vs Taxis, Centrals vs fleets vs “independent
operators”
• Differences in the regulations– Different approaches, strengths and combinations
Not easy to make generalisations
Percentage of trips paid for by the public sector. Source: Bekken 2003
Less than 10% 10%-25% More than 25% Figures N/A Case-study cities
Berlin, Helsinki, Vienna
Brussels, Amsterdam, Dublin, Oslo
Stockholm Geneva, Budapest, London, Madrid, Paris
Countries (average)
Germany Belgium, Finland, the Netherlands, Hungary,
Sweden, Norway
Austria, France, Ireland, Spain, Switzerland,
Great Britain
3
Entry regulations in Europe.Strict quantity regulation
– With strict quality requirements: Norway, (Germany), (Finland), Denmark
– With lean quality requirements: Belgium, France, Spain
No quantity restrictions– With strict quality requirements: Austria, Sweden,
(Germany), (The Netherlands)– With lean quality requirements: (Hungary), Ireland
However several have deregulated the last two decades
4
Fare regulation in EuropeNo fare regulation:
– Sweden (centrals), Norway (major cities), UK (some places)
Maximum or fixed fares:– Belgium, Finland, Hungary, The
Netherlands, Ireland, Norway, Switzerland, UK, Austria, Germany, Ireland, UK (London), France, Denmark
5
The overall trends
• Focus on quality regulations not quantity regulations
• Maximum fares still retained or strong focus on improved information
6
Tre
nd
tow
ard
s q
uality
sta
nd
ard
sTi
ght q
ualit
y re
quire
men
ts(E
U d
ir 96
/
Lean
qua
lity
requ
irem
ents
Qu
alit
y an
d s
ervi
ce
req
uir
emen
ts f
or
op
erat
ors
No entry control
Quantity control (market access)
flexible quantity control Tight quantity control
Netherlands
Sweden
Hungary
Norway(Oslo)
Ireland
London
Austria
Brussels
Berlin
Paris
Finland
Geneva
Madrid
7
Some experiences with deregulation• Ireland (entry)• Sweden (fares and entry) • Norway (fares)• The Netherlands (entry and fares)
8
Ireland
Entry deregulated - From tradable licences to free market overnight
• Increased supply (3x in 2 years)• Increased availability• Reduced utilisation• Increased problems of
“unacceptable behaviour”Tightened some quality aspects later
9
Ireland - supply exploded
Effects of the deregulation in Dublin
0
2 000
4 000
6 000
8 000
10 000
Pre deregulation Short term effect (1 year)
Medium term effect(2 years)
PH
Vs
, T
ax
is
0
10
20
30
40
50
60
70
Pe
rce
nta
ge
of
ho
urs
s
urv
ey
ed
wit
h a
wa
itin
g
tim
e l
es
s t
ha
n 5
min
Taxi licences PHVs Hours surveyed with a waiting time less than 5 min.
10
Sweden
Deregulated fares and entry in 1990:• Fares increased initially • Supply increased (most in cities)• Reduced utilisation• Increased cost of subsidised trips in
rural areas - reduction in cities
Tightened many quality aspects later
11
Sweden changes overnight
8000
9000
10000
11000
12000
13000
14000
15000
16000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Taxi
veh
icle
s, t
axi o
per
ato
rs
0
50
100
150
200
250
300
Nu
mb
er o
f b
ankr
up
cies
Taxi operators Taxi vehicles Bankruptcies
12
Norway
Fares deregulated in major cities• General fare increase• More differentiation (higher night
fares lower daytime)• Informational problems
Plans to deregulate entry as well
13
The Netherlands
• Stepwise deregulation• From regulation on most aspect to
“free” market• Increased supply• No increase in demand• Fares still regulated• The stepwise approach worked
well
14
The Netherlands – more cabs but smaller companies
31 % 34 % 33 %
23 %
-16 %
11 %
-31 %-26 %
-40 %
-30 %
-20 %
-10 %
0 %
10 %
20 %
30 %
40 %
The Netherlands Rural areas Urban areas 4 largest cities
Increas in number of taxis 1999-2001
Increase in the number of taxis per company 1999-2001
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Market characteristics Numbers of vehicles Fares Level of service
Ireland(Entry deregulated)
The taxi rank- and hailing segments dominate (Dublin).
Massive increase. (+200% in Dublin, + 100% on average).
Still regulated. Reduced waiting time for customers nationwide. Primarily at taxi ranks. Small
improvements in telephone booking segment.
New Zealand(Fares and entry
deregulated)
The telephone-booking segment important in particular outside
urban areas.
Massive increase (+160% 1989-2001 on average). Marginal
decrease in taxis numbers as well as availability in rural areas.
Decline in real terms increase in nominal terms. Fares increased in
real terms in rural areas.
Reduced waiting time. Far greater range of services.
Sweden(Fares and entry
deregulated)
The telephone-booking segment dominates.
Large share (56%) of trips subsidized (primarily in rural
areas).
Increase immediately after deregulation, stable thereafter. No long term increase in rural
areas. The efficiency has decreased.
Immediate increase (real terms), stable thereafter. The major
increase occurred in medium cities and rural areas. The cost of
subsidized trips increased in rural areas and decreased in cities.
Reduced waiting time, no change in consumer satisfaction.
Norway(Fares deregulated
in some areas)
The telephone-booking segment dominates nationwide.
Large share (20%) of trips subsidized (primarily in rural
areas).
No change due to deregulation. Immediate increase (real terms), stable thereafter. Greater fare
differentiations (most prominent in large cities).
The supply at night and in weekends has increased due to the increased revenue potential caused by fare
differentiation.
The Netherlands(Entry deregulated, maximum fares)
The taxi rank segment dominates in the largest cities, telephone
segment elsewhere. Large share of public subsidized trips, primarily
in rural areas.
Significant increase in the number of taxis, primarily at taxi
ranks.
Increased the first year and fell the second year (real terms).
Increased availability most pronounced at taxi ranks in the weekends. Taxi
usage has only increased marginally in urban areas and decreased in rural
areas.
USA Very different, however street work dominates in urban areas.
Massive increase (+18 to +127%)
Increasing Unchanged
Canada Very different, however street work dominates in urban areas.
Increase N/A Increased availability, reduced quality.
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Deregulation summarized (1)• Increased availability (cities), but reduced
utilisation– Reduced waiting time for consumers – Increased costs per trip
• Fares adjust, but not necessarily reduced – lack of competition and previously over suppressed– No surprise??– Fare differentiation (more related to demand)
the great advantage
17
Deregulation summarized (2)• Regional differences must be considered
– Rural areas no continuous supply curve– Cities with a transparent industry– Metropolitans with externalities
• Dispatching Centrals play an important role– Information, recognition, branding,
competition– Enforcement, self-discipline– Cost efficient supply – same supply with less
taxis
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Fares Oslo taxi
Tariff When? Where? FaresTAXA 1 Weekdays Starting
tariff:€ 3,69
06-17 + €/km € 1,63 + €/hour € 0,00
TAXA 2 Evening 17-22 Starting tariff:
€ 4,29
Saturday 06-15 + €/km € 1,88 + €/hour € 0,00
TAXA 3 Night Mon-Th (22-06) Starting tariff:
€ 4,52
Saturday 15-22 + €/km € 2,01Sunday 06-06 + €/hour € 0,00
TAXA 4 Weekend night Starting tariff:
€ 5,24
Friday + Saturday + €/km € 2,3322-06 + €/hour € 0,00
TAXA 5 Public hollidays Starting tariff:
€ 5,95
+ €/km € 2,62 + €/hour € 0,00
Fares Taxi 2 - Oslo
Tariff When? Where? FaresTAXA 1 Weekday daytime Starting
tariff:€ 3,57
Mon-fri 110-14.30 + €/km (0-4km)
€ 1,54
+ €/km (>4km)
€ 1,37
TAXA 2 Mon-fri 06-10 Starting tariff:
€ 4,29
Mon-fri 14.30-18 + €/km (0-4km)
€ 2,00
Saturday 06-18 + €/km (>4km)
€ 1,49
TAXA 3 Mon-fri 18-24 Starting tariff:
€ 4,64
Sunday 06-24 + €/km (0-4km)
€ 2,13
+ €/km (>4km)
€ 1,73
TAXA 4 Mon-fri 00-06 Starting tariff:
€ 5,24
Friday 18-24 + €/km (0-4km)
€ 2,35
Saturday 18-24 + €/km (>4km)
€ 1,81
TAXA 5 Saturday 00-06 Starting tariff:
€ 5,60
Sunday 00-06 + €/km (0-4km)
€ 2,67
+ €/km (>4km)
€ 2,04
TAXA 6 Public hollidays Starting tariff:
€ 6,15
+ €/km (0-4km)
€ 2,24
+ €/km (>4km)
€ 3,20
Fares Norgestaxi Oslo
Tariff When? Where? FaresTAXA 1 Weekdays Starting
tariff:€ 3,81
06-17 + €/km € 1,43 + €/hour € 0,00
TAXA 2 Evening 17-22 Starting tariff:
€ 4,64
+ €/km € 1,88 + €/hour € 0,00
TAXA 3 Night Starting tariff:
€ 4,88
Saturday-Thursday + €/km € 1,9822-06 + €/hour € 0,00
TAXA 4 Weekend Starting tariff:
€ 4,88
Saturday+Sunday + €/km € 1,9806-22 + €/hour € 0,00
TAXA 5 Weekend night Starting tariff:
€ 5,60
Friday+Saturday + €/km € 2,2822-06 + €/hour € 0,00
TAXA 6 Public hollidays Starting tariff:
€ 5,95
+ €/km € 2,43 + €/hour € 0,00
Is fare information enough?
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The Swedish fare information requirements
Fares Taxi StockholmTariff When? Where?
Weekdays Starting tariff: € 4,509-15 + €/km € 0,84
+ €/hour € 32,04Not covered by Starting tariff: € 4,50
Taxa 1 or Taxa 3 + €/km € 0,99+ €/hour € 32,04
Friday 21 - Saturday 05 Starting tariff: € 4,50Saturday 21 - Sunday 05 + €/km € 1,28
Public holidays + €/hour € 40,71City Centre toAirportCity Centre toAirport
TAXA 3
Fares
Fixed faresFixed fares
TAXA 1
TAXA 2
Comparable fare*
-
€ 27,43-
€ 20,87€ 22,37
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Fares Oslo taxiTariff When? Where?
Weekdays Starting tariff: € 3,6906-17 + €/km € 1,63
+ €/hour € 0,00Evening 17-22 Starting tariff: € 4,29Saturday 06-15 + €/km € 1,88
+ €/hour € 0,00Night Mon-Th (22-06) Starting tariff: € 4,52
Saturday 15-22 + €/km € 2,01Sunday 06-06 + €/hour € 0,00
Weekend night Starting tariff: € 5,24Friday + Saturday + €/km € 2,33
22-06 + €/hour € 0,00Public hollidays Starting tariff: € 5,95
+ €/km € 2,62+ €/hour € 0,00
TAXA 3
TAXA 4
Fares
TAXA 1
TAXA 2
TAXA 5
Comparable fare 0-4km
€ 24,64€ 28,57
€ 20,00€ 23,10
€ 32,14
Fares Norgestaxi OsloTariff When? Where?
Weekdays Starting tariff: € 3,8106-17 + €/km € 1,43
+ €/hour € 0,00Evening 17-22 Starting tariff: € 4,64
+ €/km € 1,88+ €/hour € 0,00
Night Starting tariff: € 4,88Saturday-Thursday + €/km € 1,98
22-06 + €/hour € 0,00Weekend Starting tariff: € 4,88
Saturday+Sunday + €/km € 1,9806-22 + €/hour € 0,00
Weekend night Starting tariff: € 5,60Friday+Saturday + €/km € 2,28
22-06 + €/hour € 0,00Public hollidays Starting tariff: € 5,95
+ €/km € 2,43+ €/hour € 0,00
TAXA 4
TAXA 5
TAXA 2
TAXA 1Fares
TAXA 6
TAXA 3
Compareable fare*
€ 24,71€ 24,71€ 28,38
€ 23,39€ 18,12
€ 30,29
Fares Taxi 2 - OsloTariff When? Where?
Weekday daytime Starting tariff: € 3,57Mon-fri 110-14.30 + €/km (0-4km) € 1,54
+ €/km (>4km) € 1,37Mon-fri 06-10 Starting tariff: € 4,29
Mon-fri 14.30-18 + €/km (0-4km) € 2,00Saturday 06-18 + €/km (>4km) € 1,49Mon-fri 18-24 Starting tariff: € 4,64Sunday 06-24 + €/km (0-4km) € 2,13
+ €/km (>4km) € 1,73Mon-fri 00-06 Starting tariff: € 5,24Friday 18-24 + €/km (0-4km) € 2,35
Saturday 18-24 + €/km (>4km) € 1,81Saturday 00-06 Starting tariff: € 5,60Sunday 00-06 + €/km (0-4km) € 2,67
+ €/km (>4km) € 2,04Public hollidays Starting tariff: € 6,15
+ €/km (0-4km) € 2,24+ €/km (>4km) € 3,20
TAXA 1Fares
TAXA 6
TAXA 2
TAXA 3
TAXA 4
TAXA 5
Compareable fare*
€ 17,26
€ 38,11
€ 19,17€ 21,90€ 23,33€ 25,95
Weekdays 11-14.30(Diff 16%)
Public hollidaysDiff (27%)
Saturday at 4PM(Diff 29%)
Weekdays 06-17(Diff 11%)
Seeing these
kind of sch
edules – w
ould you ”go shopping”?
And what a
bout these
kind of compara
ble fare
s?
