Lucrative hackney carriage plates fetch up to £35k
THE national consumer watchdog has called for the end of restrictions on the number of taxis in Southampton.
The Daily Echo can reveal the limit has led to a lucrative trade of taxi "plates" - worth up to £35,000 - which earn "Mr Bigs" thousands, even though they don't drive.
The National Consumer Council (NCC) says the limit on taxis means longer queues at ranks - which in turn tempt revellers to risk unlicensed cabs or even drink-and-drive.
The safety concerns were put to Hampshire Constabulary which said it was a "local authority matter".
The NCC says deregulation would also end the lucrative trade of hackney carriage plates - money that could be spent on improving cars or reducing fares.
In Southampton, the number of hackney carriages - taxis that can be pre-booked or hailed in the street and at taxi ranks - is limited to 263 by the city council. However, there is no limit on private hire vehicles - which can only be pre-booked - and more than 400 operate.
The Department for Transport said removing quantity controls was "best practice" and that policy should be decided "in the interests of the travelling public".
Southampton is one of 97 councils to have ignored the advice, along with Portsmouth and Bournemouth.
Almost 72 per cent (246) of the 343 authorities in England and Wales - including Eastleigh, Gosport and New Forest - have removed restrictions in the past two years.
The council last issued new hackney carriage plates in 2001 when 44 were handed out in a lucky dip, but with just 263 on the road their value increases every year.
The Daily Echo can reveal that one Romsey businessman owns at least 12 hackney carriages which he rents out for thousands of pounds a week.
It's understood that plates have sold for as much as £35,000 in Southampton and that the current average price is about £30,000.
According to council records, plates have transferred between owners 89 times in the past 12 months.
The council receives no money from handing out the plates or from these sales - it only requires that it be notified of the new owner's name.
NCC senior policy advocate Steve Brooker: "Taxis owners are only willing to pay these sums because they think they can make enough profit to justify their investment.
"The money taxi owners spend on getting their plate is money being taken away from their passengers. This money could be better spent improving the quality of their cabs or reducing fares."
The owner of a single plate can make £430 a week renting their taxi to "journeymen drivers", according to John Davies of Taxi Driver Online.
By multiplying the weekly rental charge by 52, a hackney carriage owner who keeps his car on the road 24 hours a day, seven days a week, will take home £21,500 a year.
A multi-plate owner with a dozen cars can receive income of £258,000 - before the cost of purchasing vehicles, insurance and maintenance. They also have the most to lose if taxi numbers increased.
Bryan Roland, editor of Private Hire and Taxi Monthly, said that if the trade was deregulated some multi-plate owners would lose "hundreds of thousands of pounds".
Mr Roland said: "The plates would become worthless. I know of one guy who owned 20 plates and when his local council deregulated he lost £500,000 overnight."
Mr Davies added that plate owners who rented out their car would benefit the most from the proposed fare increase.
"Taxi driver rent will normally increase whenever there is a fare increase. This is one of the few occasions when a vehicle licence owner can justify an increase in driver rental," he said.
"In many cases those who rely on others to supply them with an income - such as owners who do not drive their own registered hackney carriage - are more reliant on fare increases to maintain a profit than those who don't employ an additional driver."
Eastleigh Council removed taxi number restrictions in July 2005. In the two years since, only four new hackney carriage plates have been handed out - and one driver handed his back.
A £10,000 survey carried out last year found there was no unmet demand in Southampton. As a result, the council decided not to deregulate - a decision labelled "excellent news" by Southampton Taxi Trade Council and Radio Taxis chairman Clive Johnson.
At the time, he said: "(This decision) will not only protect the income of all Southampton's taxi and private hire drivers for many years to come, but also shows that Southampton's taxi trade does fulfil it's obligation to supply the public with a service 24 hours a day, 365 days a year."
Mr Brooker said unmet demand surveys gave a poor indication of the true situation: "They only measure queues at ranks, which doesn't pick up the experience of people wanting to hail a cab or those who decide not to bother getting a cab because of the long wait they've had previously.
"There is strong evidence from the Office of Fair Trading market study that removing quantity controls would put more taxis on the roads meaning reduced waiting times and less opportunity for unlicensed taxis to operate.
"It would particularly benefit people such as the elderly, who depend on taxis to get them to doctors' surgeries, shopping centres and other key locations.
"In any case, even if councils consider that this policy does no actual harm, this is not a positive reason to keep them. Instead, quantity restrictions are an unnecessary piece of red tape, the cost of which ultimately finds its way onto taxi fares or our council tax bills."
Transport and General Workers Union Cab Section chairman Perry McMillan said deregulation would put some drivers out of business.
"Not enough work would be created for the cars on the road."
Another demand survey will be carried out next year, council licensing officer Richard Black said.
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