Decision Reserved On Issue Of New Taxi Licences

Press, Volume CIV, Issue 30822, 6 August 1965, Page 17

Decision Reserved On Issue Of New Taxi Licences

. Suggestions that from 16 to 50 new taxi licences should be issued for the city were made when counsel summed up before the iNo. 9 Transport Licensing Authority (Mr J. S. Haywood) yesterday in the inquiry’ into the adequacy and efficiency of the city’s taxi services.

The authority, who reserved his decision, heard conflicting views on the effect new licences would have on the earnings of cabowners and on goodwill payments for taxi licences. The inquiry was based on a recommendation from the Transport Department's senior investigating officer (Mr N D. Henderson) that a minimum of 38 new licences should be issued, and that up to 4/ new licences could be issued without causing hardship. Mr J. A. Bretherton, for prospective applicants for licences, said that Mr Henderson's report had not been seriously challenged, and the recommendation that 38 new licences be issued on present conditions was a realistic one Christchurch had more people per cab than other centres. It was an expanding city, with an international airport, and was the starting point for South Island tours Christchurch must expand more than Wellington or Auckland, which were cramped, and limited in their development. As on previous occasions. Mr Bretherton said, there had been evidence that taxi-own-ers made a modest living. The Authority had been asked to believe that about £llOO was the net annual profit. “To me, that seems extraordinary, as it is very little more than the award rate paid to full-time drivers,” said Mr Bretherton. “For this comparatively modest return, we are asked to believe that men will pay thumping goodwill of £2OOO or more for a licensed cab.” “Comfortable Position” The industry, he said, had been able to absorb the 25 licences issued in 1962-63 There was no evidence of owners being ruined, or of instability. Working hours

I showed a “fairly comfortable position,” owners working 8 am. to 5 p.m. with an hour off for lunch, in general. There was a small proportion of taxis on the roads after 8 p.m. It was a protected, sheltered industry. Goodwill was the best reflection of the real earnings, and if goodwills continued to rise, there would be good reason to believe that profits were being sustained. Applications for taxi licences were often made by drivers, who were in a good position to judge earnings. Hit-and-miss guesses had been submitted to the Authority, but, Mr Bretherton suggested’ he should consider issuing at least 30 new licences. Mr B. J. Drake, also appearing for prospective applicants, said that he agreed with Mr Bretherton's submissions. If payment of up to £2400 goodwill was challenged, it suggested that the buyers either ignored advice or were completely irresponsible.

“It challenges credulity that person after person is paying increased amounts in goodwill if all he is to get is a comparatively low net profit,” said Mr Drake. “Thirty more licences would be a realistic figure in relation to current earnings. A substantial increase is justified.”

The Authority could well consider issuing as many as 50 more licences, said Mr G. S Brockett, appearing for Kiwi Taxis, Lyttelton. Meeting Peaks Two points were clear from the inquiry, he said. One was the lack of flexibility of the industry in arranging doubleshifting of cars, and the other was the desire of operators to go home for tea at the peak of the Friday evening rush. The industry showed lack of control in marshalling its capacity to meet peaks. Peaks could not be met by more licences, he continued, but more licences were justified by the growth of the city, and the need for longer trips, reducing the actual

' number of jobs. The industry could give better coverage of the city, with better distribu- ! tion of stands. i “To issue 30 new licences would be like a lucky dip,” said Mr Brockett. “On the statistics produced at this inquiry, with the Authority’s knowledge of Christchurch, and the education of the public, the Authority could consider going as high as 50 new licences, which would be ample for good coverage. “I do not think Mr Henderson took intc account the prospective increase in the population, and its growing prosperity. The tourist industry itself should push the earnings of the industry substantially. The issue of 50 new licences at once would disrupt the industry, but they could be fed in over" the next three years.” Mr R. A. Young, for the Canterbu-y branch of the New Zealand Taxi Proprietors’ Federation, said that Mr Henderson’s recommendation had to be viewed in the light of other factors. “No Public Clamour” The Christchurch taxi service was at least the equal of that in other centres. There was no public clamour for more licences. The Henderson report generally was one of satisfaction with the service. An industry handling 2m calls a year could expect some isolated complaints. The test in the Transport Act was that cab services should be adequate. This did not meat that every call had to be answered on the instant. Traditionally, Chriistchurch had always had fewer cabs oer person than Auckland or Wellington. In 1962, when the city’s population was 224,000, there were 974 persons to a cab. The population had since risen 6.5 per cent to 238,000. On that basis, 16 more taxi licences would be justified. On the basis of a cab per 1000 persons, 18 new licences would be needed. But offset against this was

the fact that since 1962, cars registered in Christchurch had risen from 55,793 to 67,471, a rise of 20 per cent. Trasnport Board passenegrs had dropped 8 per cent over the three years, and rental cars had dropped from 397 to 343. Much had been made of goodwill payments, said Mr Young. The man who paid goodwill would make a very good operator, because he had so much at stake that he had to give service. Earnings were not excessive, and it was unfair to suggest that they had been suppressed for purposes of the inquiry.

“It is obvious that the industry can absorb more licences, but it will not be able to stand a substantial increase,” said Mr Young. “The industry cannot maintain standards unless its operators are assured of a reasonable living, and decent working standards. “It is most significant that not one new applicant out of the 100 or so has come along to give evidence that new licences are necessary. The only conclusion one can draw is that people are satisfied with the service.” Multiple Hiring For the Christchurch Transport Board, Mr J. D. Hutchison said that if proper rosters were arranged, and adhered to, peak problems could be minimised. He asked for control of an increase in illegal multiple hiring, and of the availability of cabs at times when the demand was highest. For the Transport Department, Mr D. L. Hogan said that Christchurch had 1018 persons per cab, while Auckland had 489, Wellington 471 and Dunedin 738. There were not enough taxis in Christchurch. Goodwill and Earnings In spite of the 25 new licences issued in 1962-63, he said, annual mileages had increased considerably, no effort had been made to establish services in outlying areas, and more licences could be issued without affecting reasonable living standards. “With high goodwills, you can assume that they go with a reasonable standard of living,” said Mr Hogan. “That had been proved beyond doubt.” He referred to evidence given by an accountant, Mr J, J. Cotter, to the effect that earnings were between £llOO and £l2OO a year. The figures should be disregarded, as to take 16 accounts from 230 was poor sampling. Defects in the figures made them too inaccurate to draw conclusions.

“There is every evidence to believe that owners will continue to get a reasonably good living if 38 new licences are issued,” he said. An increase in the number of private cars, on experience elsewhere, indicated an increased demand for taxis. Mr Hogan said that in issuing new licences, the Authority should keep the balance between the two companies. Mr Henderson had suggested that 15 of the new licences go to Gold Band, and 23 to Blue Star. Competition between the companies was desirable in the public interest in maintaining a good service—better than the public would get without competition. In reserving his decision, the Authority said that all were agreed that the only approach would be on a broad basis in the public interest.