Defending the taxi cartel

The new taxicab regs are soon to take effect. From the first of August, cabs will have to have video cameras and be on 24-hour monitored dispatch. I'd suggested that security had bugger all to do with the regulatory move and that it was just an effort at cartelization by the Taxi Federation.

And now we hear rent-seeking Taxi Federation head Tim Reddish whining that jitneys may have found a loophole: if they register as private hire, they're exempt from the camera regs.

But many taxi companies are struggling with the extra cost of the measures, so are becoming private hire services in a bid to save money, the Taxi Federation says.

In a bid to stop rogue operators, federation executive director Tim Reddish has written to Transport Minister Steven Joyce warning that "the natural flow-on from this will see the emergence of an "under the radar' mini-cab type operation that will have the potential to decimate the legitimate and fully compliant taxi industry".

Under operator licensing legislation, private hire cars must not be metered – instead carrying passengers at an agreed price – and they must also be prebooked.

But an article in the federation's industry magazine says taxi companies are ditching their approved taxi operator status and switching to private hire to avoid the new measures.

"Taxi companies ... convert to private hire in the belief they can do much the same thing without complying with existing taxi laws, let alone tough new rules on security cameras, dispatch systems and duress alarms."

Have no fear, the government will act to protect the cartel:

Transport Agency spokesman Andy Knackstedt said most private hire operators were legitimate services like limousines and wedding vehicles, but the agency was "focusing our attention" on the small number of services "competing illegally with approved taxi organisations by accepting casual hires without the prescribed requirement for a prebooking".

A separate operator in Palmerston North was prosecuted and fined $6632, with a month's suspension of his commercial drivers' licences.

"Where we find evidence of such illegal operations we will undertake prosecutions."

Mr Joyce said he was looking into the industry's concerns.

HT: @HerrSchnapps

The safety regs are less a barrier to entry than nonsense taxicab medallion systems that limit the maximum number of cabs in an area; fortunately, the cartel hasn't yet successfully argued for those in New Zealand. I think Joyce is too sensible to be swayed by that blatant of rent-seeking; the safety regs came in on the back of a couple of nasty incidents of violence against cabbies and the usual "Something Must Be Done". It would be harder to get public support for full cartelization.

There's an awesome spot in the market for the private hire company that figures out an Android/iPhone dispatch system: it could totally satisfy the regs and would beat standing at a corner or looking for a taxi stand. Unless the Taxi Federation prevents that kind of competitor from emerging.