2. LAS PATENTES DE SEGUNDO USO
2.6. Las Patentes de Segundo Uso en la Comunidad Andina
2.6.3. El Decreto Ejecutivo 1344 A
The countries and cities we have chosen have very different regulatory regimes. Table 4.1, shows the major regulations which are effective at a national level in the different countries.
It is striking how different regulatory regimes are between the countries. This underlines the fact that regulatory regimes must be tailored to fit different market characteristics and that there is no such thing as a perfect organisation of the taxi industry and/or a regulatory regime that would fit every locality.
Table 4.1: Major regulations, currently effective on national level
Direct barriers to entry Indirect barriers to entry Fare regulations Country Regulatory level
Market access Quality standards on operators Quality requirements on taxi drivers Other requirements Ireland Local authority
great discretion
Entry deregulated
Substantial licence fee Licences valid in one area only
Must have a valid taxi driver licence. No further restrictions
Written exam.
Criminal record check. Taxi drivers licence renewed annually
Vehicle requirements with an annual test
Maximum or fixed fares apply. Local authority decide the fare level
New Zealand National legislation,
regional enforcement Entry deregulated DC (association) affiliation required37 Written exam
Demerit point system applies also for the associations Criminal record and transport offences checked
Written exam Demerit
point system for drivers
Annual test of vehicle, taximeter must be checked every 6 months
Fares not regulated, however the associations decide the fare for affiliated taxis
Sweden National Entry deregulated, all operators must pass the quality standards
The EU directive on road transport operators applies
Written exam. Criminal record check. Medical certificate. Working time requirements
Annual test of vehicle. Strict rules on roadworthiness and safety apply
Fares deregulated. Independent operators free to decide structure. Otherwise DC decides. Strict requirements on fare information
Norway National legislation, regional
enforcement
Entry regulated. Local authorities decide the market size. DC affiliation required
Must have a valid taxi driver’s licence and be a taxi driver as main occupation.
The EU directive on road transport operators applies
No exam
Criminal record check Medical certificate
Local area knowledge test in urban areas
No particular taxi vehicle test except the ordinary biannual vehicle test. Taximeter with printer required
Fares deregulated in some urban areas. The DCs decide the fares for all affiliated taxis.
The Netherlands
National Entry deregulated
No licence areas apply
Written exam Criminal record check Complaint handling service
No exam
Criminal record check Medical certificate Working time requirements
Annual test of vehicles (roadworthiness and taximeter)
Maximum fares apply
USA Local Very different approaches locally. A nationwide survey showed 64% having entry control, while 76% had fare regulations
Canada Local Very different approaches locally
4.1.2 Different regulatory changes have been implemented in different countries
Just as striking as the difference in the current regulation are the different
regulatory changes implemented in the different countries. Table 4.2 summarizes the major regulatory changes in the different countries.
Table 4.2 Summary of regulatory changes
Direct barriers to entry Indirect barriers to entry
Country
Market access Quality standards on operators Quality requirements on taxi drivers Other requirements Fare regulation
Major goal of the changes Ireland Quantity restrictions removed Second hand value of licences wiped out Enhancement foreseen Enhancement foreseen No change Unchanged (Fixed by local authority)
Reduce the mismatch between supply and demand (Increase availability)
New Zealand Quantity
restrictions removed Enhanced DC affiliation introduced. PHVs and taxis equally treated Mainly unchanged
Enhanced Removed Part of the general deregulation of the economy.
Reduce the difference between taxis and other passenger service vehicles (PHVs and others) Sweden Quantity restrictions removed. Licensing areas merged Enhanced some years after deregulation Enhanced some years after deregulation Enhanced some years after deregulation Enhanced some years after deregulation
Create a more efficient industry. Reduce the mismatch between supply and demand Increase price competition
Norway Unchanged
Some licence areas merged
Enhanced Unchanged Unchanged Removed in some urban areas Increase competition and supply The Netherlands (Stepwise deregulation) Quantity restrictions removed. Licensing areas merged National standard requirements introduced National standard requirements introduced Enhanced National maximum fares introduced instead of local fixed fares
Strengthen the role of taxi as a complement to other modes of public transport. Increase the use of taxis USA (Reregulation on several aspects later) Quantity restrictions removed in most of the deregulated cities Usually enhanced after some years. In particular fleet sizes and other operating requirements are introduced Usually unchanged Usually unchanged
Mainly removed Primarily based on the advantages of free competition. Also to increase supply, level of service and reduce fares. In some cases to reduce the bureaucracy
Canada Different
approaches
Enhancements Enhancements Unchanged To increase safety and the quality
Illustration 4.2 highlights the main regulatory changes each country has
undertaken. As illustrated, the paths chosen for regulatory changes vary just as much as the regulations themselves.
Most countries, apart from Norway, have deregulated the actual barriers to entry. Ireland stands out as an extreme with neither significant direct nor indirect regulations regarding market entry and requirements imposed on operators. On the other hand, Ireland has kept relatively strict regulations on fares, which have been extensively deregulated in countries such as Norway (Oslo), New Zealand and Sweden.
Strict regulation on
the number of
operators
Flexible rule on numbers variable
No regulation on number. Strict requirement on
o
p
erators
No direct
regulation on the market size. No indirect barriers.
Actual barriers to entr y Minimum or maximum fares No regulation of fares Fixed fares
Different degree of flexibility when fares are regulated
highly flexible low flexibility
Fare regulation The Netherlands Sweden Oslo Ireland New Zealand Calgary Seattle TØI report 658/2003
Illustration 4.1: Main regulatory changes
The regulation of the UK taxi industry differ between the local authorities. Thus, we have not included the UK in this figure. However, figures reported by the OFT shows that 95 per cent of the local authorities regulate the fares while 45 per cent regulate the number of vehicles. It does not seem as if quality standards on operators are a big issue. Indirect barriers to entry, such as taxi driver requirements are widely experienced.
In sum, no two deregulating experiences are exactly the same. Various measures have been adopted, and few countries or cities in the study have introduced a free market in the purest sense. Those who have actually have tried something close to total deregulation have later reintroduced some kind of regulation, especially with regard to vehicle and service standards. The question is, consequently, not a simple matter of regulation versus deregulation, but rather what kind of regulation, where and to what extent.
It is also worth mentioning that not all countries have the same regulation for the entire industry. In some countries different approaches has been taken in different market segments. This has been most pronounced when it comes to the regulation of fares. In both Sweden, New Zealand and some Norwegian cities, fares are deregulated. However all cabs affiliated to the same DC are required to have the same fare schedule. This has increased the transparency and competition between the DCs and made it possible for customers to shop around.
The presence of a PHV industry also seem to be a way to tailor the regulation to different market segments. This is particularly related to fares. The customers are most likely to be exploited when catching a cab curbside or from a rank. Thus, some countries maintain strict fare regulation on these segments while allowing the PHV sector to compete in the segments where customers are in a stronger position to shop around.