Monday, April 23, 2007



A recent review of the taxi industry by the Independent Pricing and Regulatory Tribunal (IPART - a NSW government body), invited submissions from the public and industry, but on its public hearingday only industry representatives were allowed to be interviewed.

According to Faruque Ahmed, President of the Taxi Drivers' Section of the Transport Workers' Union (TWU), this follows a pattern of thegovernment s close links with industry at the expense of the rightsof drivers and consumers.

This is the only industry where the systemic problems are blamed on the drivers, even though they have no input into the decision making processes." Ahmed told City Hub.

According to Ahmed, his submission to IPART - an 11 page document with 200 pages of annexes highlighting problems within the taxi industry was refused public scrutiny by not being shown with other submissions on the IPART website.

One day before the hearing Ahmed received a letter from John Dulley, General Manager of IPART's Secretariat, explaining why his submission was not made available for public scrutiny:"From an initial examination ..., I consider that it may be an exempt document... as it contains references to the affairs of agencies and other persons that may have an unreasonably adverse affect on them."

Ahmed told City Hub his submission had been "marginalised". If he had been notified immediately of perceived problems, he could have had an extra seven days after the due date to make alterations. He pointed out that an extension was granted to an influential industry representative to hand his submission in on November 20 - even though an Issues Paper outlining the tribunal process specifically stated: "Submissions on the issues raised in this paper should be received no later than November 13."

On the day of the IPART hearing. approximately 60 submissions had been received by IPART and yet only 23 were displayed on their website. Ahmed approached Dulley and was told in front of awitness, "Your submission is very compact. Everything is in it."As the results of the tribunal will only be released after the state election, Ahmed persisted with his correspondence to IPART, requesting why and what changes had to be made to his submission for it to be released onto the website.

A response finally arrived on February 9 from the Chairman of IPART, Thomas G. Pary "While the tribunal normally provides public access to submissions to assist with public understanding of the issues in its investigations, there is no obligation on it to do so."

Prior to the hearing, IPART had already chosen who was to be interviewed in front of the public. No smaller shareholders, union representatives or taxi drivers were interviewed in front of the public; in fact only a few industry power brokers and governmentr epresentatives had that privilege.One reason given to Ahmed for not being allowed to appear as a witness at the hearing was stated in Dulley's letter. "There is limited time available at the hearings ... "

The time table of the hearing day was given in the Issues Paper, adocument outlining the Tribunal and its processes, sent to interested parties prior to the tribunal. It indicated a 10am start, a 3.45pm finish, a 90 minute break for lunch and two 15 minute tea breaks. In total, just 3 hours and 45 minutes for the day.


Issues of public participation. transparency and objectivity of government review processes were highlighted in the NationalCompetition Council's 1997-98 Annual Report, which stated:"... one of the matters consistently raised with the Council by members of the community is the appropriate level of... opportunity for public involvement. Typical concerns include ... failure to allow access to discussion pape/s ... [and]... unless it can be convincingly demonstrated that open processes would impose net community costs ... reviews should be conducted in an independent, open and transparent way, against clear terms of reference, and in a manner that allows interested parties to participate."

Both Dulley and Parry stated in their letters to Ahmed that his submission was not within the terms of reference of the tribunal's review. Parry said, ".. it is not dear to me how the public releaseof [Ahmed's) submission would enhance the tribunal's or the public's understanding of the issues relevant to the review."

Ahmed told City Hub that his submission gives an historical and current background to fundamental problems facing the taxi industry.

He feels that if his submission at the very least covers somerelevant issues, he should have been given the opportunity to be interviewed in person at the hearing.

Ahmed said that both Dulley and Parry have interpreted IPARTs parameters of review as limited to improving the competitive nature of the industry. Dulley's letter to Ahmed stated, "... you would prefer that these regulatory failures [referred to in Ahmed's submission] be rectified in preference to introduction of a more competitive environment."

Yet Ahmed argues in his submission that many entrenched problems in the industry are anti-competitive, unsafe and unjust for the drivers, unfair to the smaller players and costly to the passengers.

The scope of the issues of review that IPART has chosen is limited strictly to "competition", seen from within the existing power structure of the industry, which is controlled by just a few players. In contrast Bob Carr, the NSW Premier, said in a letter in the IssuesPaper, "In conducting this investigation, the tribunal should consider ... the social, financial, economic and administrative impacts of any recommendations made."

Controversial history

The taxi industry has had a controversial history dating back manyyears. In 1940, Justice Edwards described many taxi operators(owners) as "lawless". This problem was reiterated by the Full Bench of the Industrial Commission in 1968 and by an industry commissioned survey in the late 1970s by Sir Asher Joel.

Joel's survey supported previous concerns about the unfair advantage taxi owners had over their drivers, to the extent that they could avoid their legal responsibilities.

Joel recommended the creation of a Taxi Advisory Council (TAC) toadvise the transport minister. To best represent all interests, hesaid the TAC should comprise police, industry (drivers, owners, etc.), the Department of Transport (DoT) and a consumer group.

The TAC was established and many felt that it allowed a wider set of views to be aired and dealt with. But this was not liked by the incoming Liberal Party Transport Minister Bruce Baird, who abolished the TAC in 1988.

The abolition of the TAC created "a vacuum whereby there was no longer a community or industry wide input into the formulation of the official taxi industry policy. This vacuum was filled by the heads of the employer body Taxi Industry Association (TIA)," said Ahmed in a report (containing facts collated over 10 years) which was recently submitted to the Independent Commission Against Corruption (ICAC).
"(They] created a non-registered body ... [called the Taxi Counci lwhich has] no status under the law)" concluded Ahmed.

Self appointed mouthpiece

Ahmed stated in his report to ICAC that the "Taxi Coundl was established in the early 1990s and unilaterally assumed the multi-pronged role of industry spokesperson, government adviser and media public relations, when in effect it was nothing more than a self-appointed mouthpiece for a small coterie of individuals drawn from the boards of directors of the major co-operatives [taxi companies). In reality it came down to three people calling the shots."

A major shift in the government's regulation of the taxi industry occurred after the introduction of the Passenger Transport Act 1990. which placed an increased emphasis on industry co-regulation between the Department of Transport (DoT) and industry groups. This is confirmed in the tribunal's Issues Paper:The NSW Taxi Council is the peak representative body of the taxi cab industry and ... play[s] the key role in co-regulation with the DoT."

It is interesting to note that not long after the Transport Act 1990 was passed, effectively giving the Taxi Council increase powers to influence legislation governing the taxi industry, at least three officials employed at the DoT resigned and were then employed by the Taxi Council and taxi companies.

One might ask why the government is prepared to co-regulate the taxi industry with the Taxi Council which is an unregistered organisation and has no mechanism for genuine representation of its workers, consumers or the multitude of single cab owners.

At a current value of approximately $280,000 for a taxi plate, only a small proportion of taxi drivers own one. As the number of plates is limited, owning a plate is considered to be a good investment by economically motivated people. In contrast to the past, many plates can now be owned by a single person.

Hence the more money you have the more plates you own, and therefore the more sway you have over smaller shareholders. A larger investor who is purely profit motivated, may have never driven a taxi before. They have more power through their voting rights over a single plate-owner driver, even though a driver would most likely have a greater insight into the needs of the industry

Ahmed has unsuccessfully tried to obtain a list from the DoTdisplaying the level of shareholder concentration within the taxiindustry. He is restricted from obtaining this information from theTaxi Council due to commercial confidentiality.

He asks, "Is the taxi industry a service industry or a speculative industry ?"
As the only review of the taxi industry in recent years has beenIPARTs tribunal, many drivers are furious at the lack of transparency of the review process and their lack of representation in the regulatory decisions made by the government.

Ahmed said "We are urging our colleagues to first vote for the minorparties or independents instead of the current Labor Government inthe upcoming election. Maybe then we will have a voice to improve our safety, the enforcement of our legal rights on shonky owners,improved environmentally friendly technology, better public education and ultimately better service for the passenger."

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