Objections to Hackney Carriage Fares 2015

1

Objector Objection Response

Paul Soper Hackney Carriage Driver Unite cab Section Representative in Guildford 28 July 2015

OBJECTION TO Guildford Borough Council Fare Variation Proposal I, Paul Soper a Hackney Carriage Proprietor and representative of Unite the Union in the Borough of Guildford wish to object to the amendment to Hackney Carriage Fares issued by the Head of Health and Community Care Services on 10 July 2015 My reasons are 1] On 6 June 2013 the Borough of Guildford issued a fare chart for Hackney Carriages which was approved by the Hackney Carriage Trade, no application was made for a variation in 2014 2] Your amended proposal for 2015 results in a reduction of fares as follows, Tariff 1 by 12.07% and Tariff 2 by 12.13% after the first mile 3] This is a massive reduction in fares which have been in operation for over 2 years and will have a drastic effect on taxi drivers in the Borough 4] Costs have risen including insurance and maintenance of our vehicles to your requirements 5] Although fuel costs have fallen they are on the increase again 6] This fare reduction is unjust and without precedent in the UK Taxi Trade Further I request that I am afforded the opportunity to put my objection to the Lead Councillor for Community Safety and Licensing and his/her committee in person before 12 August 2015 Yours sincerely Paul Soper Unite Cab Section Representative in Guildford

1. This statement is factually correct but has no impact on the data within the fare chart.

2. The calculations are incorrect and the reduction is 17.02% in tariff 1 and 17.6% in tariff 2 after the first mile. The decrease in tariff is calculated using the methodology, which shows a decrease in the running costs per mile of 15p.

3. There is a reduction in the rate per mile after the first mile however, the flag drop has not changed and the running cost per mile has decreased. Drivers have also benefitted from lower fuel prices over the last 2 years.

4. The AA motoring costs used in the calculation show a reduction in insurance costs. In addition the calculator adds a £500 supplement to insurance on top of the AA figure.The running cost per mile has increased for cost of service labour costs and replacement parts.

5. The fare calculator is designed to be run annually to allow for changes in costs and if costs substantially increase or decrease there is the discretion to run the fare calculator more frequently.

6. The fares are set using a methodology approved by the Executive and there are examples in other areas of the Country where fares have reduced e.g. Hart, Bristol and North Hertfordshire.

Objections to Hackney Carriage Fares 2015

2

Objector Objection Response

Brian Birkenshaw Hackney Carriage Driver 22 July 2015

Dear Sirs I am writing to you as regard to the new revised taxi tariff, I am absolutely dismayed and disappointed that this revision could be put in place. As a taxi driver for Guildford Borough for over 16 years, I cannot understand how these new tariff can be put in place. As a extremely hard working individual, it is becoming increasingly difficult to make ends meet, and taking a 20% pay cut, would risk the loss of my home, paying bills, feeding my family. A simple £10.00 journey would become £8.00. As you will be aware in order to be a successful taxi driver, I have to take in to account fuel costs, repairs, inflation, keeping my vehicle in tip top condition for my customers. I would like to fully understand how you can justify the decrease in writing , when in fact my customers are happy to pay the current rate, and as Guildford is an extremely affluent area, the customers are happy to eat, drink and club in Guildford and then have a taxi home. I would welcome any of you to sit with me on a Saturday night and embrace the situations we face. I am under the impression, that the licencing committee, were working for us and not against. I am also struggling with the fact that no other work, organisation would carry this out a 20% cut. I am asking you to reconsider such a decision, and meet with myself to discuss further. I look forward to hearing from you Brian Birkenshaw

The new fare tariff was calculated using the methodology approved by the Executive in March 2013. The statement regarding a 20% pay cut is incorrect because the methodology allows for an annual salary for drivers which increases slightly. The fare calculator takes account of the fuel costs, repairs, inflation and vehicle maintenance and is periodically reviewed to allow for the variances over time. It should be noted that petrol prices have reduced by 20% and the running cost per mile has reduced. Other unrelated comments are noted.

Objections to Hackney Carriage Fares 2015

3

Objector Objection Response

Sajad Hussain Hackney Carriage Driver 11 July 2015

Hi I have just read the article in the surrey advertiser regarding that Guildford BC have decided to have I fare decrease, I like to fully object to this. On the grounds of not fully being informed of how this decision was made, no letter or email was sent. Also how can the council have a fare decrease when we as taxi drivers are just making ends meet. From Sajad hussain

The Council adopted a fare calculator on 28 March 2013 and delegated authority was given to the Head of Health and Community Care Services ‘to determine any changes to the table of fares in accordance with the procedure and at least on an annual basis, and to authorize statutory publication of the table’. Delegation was also given to the Lead Councillor for Community Safety and Health ‘to consider objections following the statutory publication of this and any future tables of fares and to approve the final table’. The situation is that using the approved fare calculator we have re-calculated the schedule of fares and these were advertised on 10 July. We have received representations from drivers and the Lead Councillor will be considering these before deciding whether to approve the revised fares. In that respect he also has meetings with some of the drivers on Friday in order to explore their concerns. All drivers have been written to advising them of the 12 August implementation date and the arrangements.

Objections to Hackney Carriage Fares 2015

4

Objector Objection Response

Benn Simmonds Hackney Carriage Driver 12 July 2015

Dear licensing, I have had the misfortune of reading the surrey advertiser this week. I do believe that you have made a mistake in you calculations. It appears that there is a reduction in the amount that a hackney carriage taxi and private hire can charge. I do not know how you came to this result but the methodology you have used is wrong given the fact that insurances have increased, the cost of living has gone up. Fuel may have come down a little but there is always a risk of the oil price increasing. Also every year the right to Sit at the station increases way more that the rate of inflation. Which also reminds me have you considered inflation as we didn't get a raise in the meter rate last year. With all the injustice that the licensing is putting the taxi trade through. Stoking the fire is not the wisest thing to do. There are other issues that need the councils priority other than messing with the pricing structure. My I suggest that all councilors and council worker take a pay reduction. Council worker get paid regardless as do a lot of paye workers. Us taxi drivers are self employed which means we should have a say in what we should charge and not some paye employee that has no idea what a self employed taxi driver does for a living and how hard we work. As an example I work 12 hours a day 6 days a week. Most other taxi driver work similar hours and my do 7 days a week. As a driver myself I have no confidence in the council and there ability to license the taxi trade anymore. Yours sincerely Benn Simmonds HCD

The approved methodology has been approved and there has not been a mistake in the calculations. The proposed fare chart does change the fares. The methodology uses the approved insurance costs and a £500 supplement. The methodology allows for an annual salary for drivers which increases slightly. The cost of living is not a factor considered in the methodology but drivers are allocated a salary in the calculator and this has increased. It should be noted that petrol prices have reduced by 20% and the running cost per mile has reduced. The Council also has the discretion to run the calculator more frequently if there are substantial change in either direction to the price of petrol. The cost of the station permit is included within the methodology. Inflation is considered within the data for the individual items in the methodology. Drivers have benefitted from lower fuel prices over the last 2 years and the methodology shows a decrease of 15p in the running costs per mile. A base salary of £27,552.25 is included within the methodology. The comments on council and officer pay are noted but not relevant to the objection.

Objections to Hackney Carriage Fares 2015

5

Objector Objection Response

Don Brandon P & A Taximeters 13 July 2015

In regards to the proposed change in the hackney carriage fare change. I've gone back through the records for previous fare charts on the Guildford Borough Council website. The proposed new tariff is approximately the same as in 2007. The prices in 2007 were £1.68 per mile up to 6 miles then £2.08 there after. Source: http://www.guildford.gov.uk/media/1555/Item-06I---Annex-I/pdf/Item_06_I__-_Annex_I.pdf The current tariff is £2.04 after the first mile, the newly proposed tariff is £1.69 per mile after the first mile. This a decrease of 17.16%. Diesel alone has increased from 95.1pence per litre in 2007 source: http://www.theaa.com/onlinenews/allaboutcars/fuel/2007/april2007.pdf to 121ppl currently Source: http://www.theaa.com/motoring_advice/fuel/index.html an increase of 27.23% How can a new tariff be reduced so greatly to match 2007's fare chart, if the cost of fuel has risen by such a large amount? There are numerous errors in your calculations. I have reviewed the information provided and found the following. 1. On HC Calculator 2015-6 v2 The sheet Calculation for running costs it states "Costs of running a diesel car based on the average value of the car being £27000-£39000 when new." It also states "AA Price is from "Motoring Costs 2015" used to input pink fields above" The figures displayed on costs sheet are in fact the average Motoring Costs 2014 for vehicles valued between £26,000 to £36,000

The current fare chart has been produced using the methodology approved by Executive in 2013 and cannot be compared with 2007 data as it is not a direct comparison. The methodology is different. The 2 typographical errors identified have been corrected but they do not affect the calculation in any way. The diesel prices for May 2015 and the cost of running a vehicle in the £26,000-£36,000 purchase price bracket have been used in the calculation. 2015 has been amended to 2014 and £27,000-£39,000 has been corrected to £26,000-£36,000.

Objections to Hackney Carriage Fares 2015

6

Objector Objection Response

Source:http://www.theaa.com/resources/Documents/pdf/motoring-advice/running-costs/diesel2014.pdf Price for Motoring Costs 2015 has yet to be released on the AA website. I've taken the average of the figures from £26,000 to £36,000 and the over £36,000, this calculates out the values to be different than the proposed. 2. In regards to the average salary, I feel this amount is incorrect. An annual survey from Neighborhood Statistics in April 2014 found Guildford's average wage was £592.00 a week. Source: http://www.neighbourhood.statistics.gov.uk/HTMLDocs/dvc126/index.html Which would total at an annual salary of £30,784.00. I've attached the amended spreadsheet to show my findings on these two matters. As well as this, Transport for London use the same methodology that Guildford uses. In April 2014 taxi fares were increased by 0.7% Source: https://tfl.gov.uk/cdn/static/cms/documents/04-14-taxi-fares-and-tariff-update.pdf In April 2015 They found a 0.1% decrease in the cost index from the previous year, they chose to freeze taxi fares. Source: HTTPS://tfl.gov.uk/cdn/static/cms/documents/03-15-taxi-fares-update-2015-2016.pdf If what TFL have found is correct, why have Guildford not had an increase since 2012/2013? Based on these findings, I strongly object to this proposed fare increase for July implantation. Regards Don M Brandon

Alternative information and challenge to calculating the average wage and the cost of diesel have been proposed. The methodology was approved by the Executive in 2013 and details the sources of information to be used which are not those suggested in the objection. No objection to the source of information was raised when the calculator was introduced. The adopted methodology used is similar to the London model but modified for Guildford and the results will not be identical. Transport for London can set their fare as they deem appropriate. The current fare chart has been in place since June 2013 and there has been no change in this time. As described above Guildford fares will differ from London fares.

Objections to Hackney Carriage Fares 2015

7

Objector Objection Response

Don Brandon P & A Taximeters 22 July 2015

Hi Justine Thank you for your response, I still disagree with with a decrease of earning of 17.5% as you should understand when people rely on a certain income for there mortgage/ rent etc. I could not see anywhere in the calculations and the amount of hours worked I would say the average taxi driver would work an average of 60 hours per week. When you can that in consideration when the drivers has to work more hours when will the first one fall asleep at the wheel, that is fact I can back that up. Regards Don

The 17.5% reduction quoted is related to the cost per mile after the first mile and does not relate directly to earnings. There is a reduction in the rate per mile after the first mile however, the running cost per mile has decreased by 15p per mile. Drivers have also benefitted from lower fuel prices over the last 2 years. It should also be noted that after the fare drop the meter will click over quicker. A salary of £27,552.25 is included within the methodology which is a slight increase on the previous year. Comments about drivers falling asleep at the wheel are not relevant to the objection however it should be noted that drivers have a duty of care to their passengers.

Don Brandon P & A Taximeters 23 July 2015

Hi Justine With reference to hours works most people do 37.5 to 40 per week most taxi drivers work at least 60 hours that's a week and a half does that not count for anything. There was another area which bought down the fairs by 20p 4 people turned up to down fares down by 17.5% cant see any body turning up. Regards Don

See comments in the above box. If drivers work after the 12 August and fail to have the tariffs on their meters changed they would be in breach of byelaws and appropriate action would be taken.

Objections to Hackney Carriage Fares 2015

8

Objector Objection Response

Mark Rostron Guildford Hackney Association 10 July 2015

Dear Sirs Guildford Hackney Association object to the fares advertised today in the Surrey Advertiser on the grounds that they are a massive unjustified decrease. Yours truly Mark Rostron Secretary-Guildford Hackney Association

Response sent 10 July 2015 to Mr Rostron: Thank you for submitting your objection to the advertised fares which has now been registered. The objection submitted does not contain the detailed grounds on which you believe the fares are unjustified. Can you please submit further information. I have forwarded the calculation to you separately and if you have any queries please do not hesitate to contact me. Kind regards Justine

Mark Rostron Guildford Hackney Association 10 July 2015

Hi Justine Can you let me have an excel format file of your formula and calculation of the proposed fares? Thanks Mark

Response sent 10 July 2015 to Mr Rostron: Dear Mr Rostron Please see attached the formula and calculation for the advertised fare chart. Please be aware that the calculations are linked between sheets. Kind regards Justine

Objections to Hackney Carriage Fares 2015

9

Objector Objection Response

Mark Rostron Guildford Hackney Association 12 July 2015

Hi Justine I believe you have understated both the cost per mile of running a taxi and the increase in the average wage for Guildford. There may be more. I have enclosed David Curtis-Botting 2013 calculation, and one of mine with some suggested corrected numbers. Yours truly Mark Rostron

The running cost per mile has not been understated and has been calculated using the approved AA data and the average wage data is from the approved ONS source of data. The attached sheets with suggested corrected numbers do not use data from sources approved in the methodology and have therefore not been taken into account. The 2013 calculation is noted.

Mark Rostron Guildford Hackney Association 13 July 2015

Hi Justine Average earnings come from here: http://www.neighbourhood.statistics.gov.uk/HTMLDocs/dvc126/index.html London Taxi running cost per mile could be taken from Transport for London Appendix 2: https://drive.google.com/file/d/0B3Wz9Agw0VfdVUc3SHpaNml1ZlU/view?usp=sharing Regards Mark

The Guildford Hackney Association has proposed alternative sources of data for average earnings and running cost per mile, however they are not those agreed by Executive in March 2013 and have not been used.

Objections to Hackney Carriage Fares 2015

10

Objector Objection Response

Mark Rostron Guildford Hackney Association 21 July 2015

Dear Justine The HC Calculator spreadsheet provided by you does not show how you calculate the average wage. In fact the Notes, and Changes pages of your spreadsheet are empty. David Curtis Botting's Hackney Carriage review sets out his method: 2 Factor: Average Wage In determining the taxi fares an appropriate level of remuneration has been established that recognises that different arrangements exist but which does not take individual circumstances and business practices into account. Assumptions: The median annual gross salary for Guildford is £27,997 per annum which has been obtained from data published in 2010 by the Office for National Statistics. The reason for using the median rather than the mean is that it is not influenced by outliers at the extremes of the data set which can often be the case when calculating income data for a group of people; and consideration was given to using the National Minimum Wage based Review of the Office for National Statistics, ASHE 2010 (revised) Table - Place of Residence by Parliamentary Constituency, found that the median used in determining the average wage was correct for Guildford. However, it is important to note that other sets of data could have been used, as follows: • ASHE 2010 (revised) Table 7 - Place of Work by Local Authority – Median £26,596; • ASHE 2010 (revised) Table 8 - Place of Residence by Local Authority – Median £28,311; • ASHE 2010 (revised) Table 9 - Place of Work by Parliamentary

The average wage is calculated using the data identified in the methodology and the GHA were supplied with the sources of the information. The notes and changes pages are left intentionally blank. The method for the average wage using ONS data is as detailed.

Objections to Hackney Carriage Fares 2015

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Objector Objection Response

Constituency - £26,602; • Various other tables that show the median wage by occupation i.e. Taxi, cab drivers and chauffeurs. The amounts do not differ that much however to ensure all factors are taking into account, it would be best practice to consider the alternatives when setting The median used for average wage should be derived from the totals of all the relevant tables, by region and occupation. David Curtis Botting doesn't show any workings for his running cost per mile, but if you are suggesting that on the same basis running costs per mile have fallen from 53p to 38p a fall of 28% then I challenge that. No index of motoring costs would show that. Additionally DCB with the agreement of Audit adopted an amendment to the formula in his Hackney Carriage review as follows: Update the methodology to reflect 65.6% dead mileage reported by the GHA. Other drivers have made separate objections with which I agree. I't's not my job to do the calculation for you. If you can show me a calculation on the same basis as DCB and with his amendments, as approved by the Committee and taking into account other objections, I would be obliged. Yours truly Mark Rostron

The running costs were calculated using the same methodology in 2013. The running costs were previously calculated using the AA Motoring costs 2012 (diesel - £27,000 to £39,000) data. If the data was entered in the running cost calculation the previous result would be displayed. A request was made for the source of the information relating to dead mileage at 65.6%.

Objections to Hackney Carriage Fares 2015

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Objector Objection Response

Mark Rostron Guildford Hackney Association 21 July 2015

Dear Justine Running cost per mile I have never seen the running costs calculated using the same methodology in 2013. If the the running costs were previously calculated using the AA Motoring costs 2012 (diesel - £27,000 to £39,000) data, please show how the data was entered in the running cost calculation to display the previous result. Until then I will maintain that the decrease you propose is unjustified. Dead mileage Please find the information that refers to dead mileage of 65.6% in the attached document. "Update the methodology to reflect 65.6% dead mileage reported by the GHA" Yours truly Mark Rostron

The calculation for the running cost per mile used in the current fare calculator approved in 2013 was provided by entering the data previously used (the AA motoring costs for 2012 and AA November 2012 diesel prices) to demonstrate how the running cost was determined. The document from audit was provided by the GHA. It is noted that this is only an ‘in progress’ working document and 45% dead mileage was applied in the methodology used for the existing fare chart and the figures from the previous papers attached were not used.

Mark Rostron Guildford Hackney Association 27 July 2015

Mark Rostron’s Comments on the GBC 2015 fare calculator on behalf of GHA 27

th July 2015

Your calculation would result in driver’s earnings falling by £3850 per year or 14%. Further, your fare chart makes drivers make a loss of £1.20 on every mile after the first of each trip. As the Transport for London (TFL) model was adopted by David Curtis-Botting and approved by the Council, I have followed their guidance. (See attached spreadsheets). The AA data you rely on is flawed. The data from the UK Government Office of National Statistics (ONS) contradicts it. TFL rely on the ONS data. (see the attached TFL document). The limitations of the AA are set out by them in their notes: From the AA rate per mile notes (see attached)

Your guide to how we calculate car running costs

The GHA state that ‘the driver’s earnings would not drop by 14% per year’ however there is no information how this figure is derived. A salary of £27, 552.25 is included in the calculation which is a slight increase on the previous calculator. The GHA state that ‘the fare chart would make drivers a loss of £1.20 on every mile after the first of each trip’ however there is not information how this figure is derived. The flag drop remains the same and the yardage is different so the

Objections to Hackney Carriage Fares 2015

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Objector Objection Response

If you're interested in how we arrive at the figures shown in the

tables you can find out here. We use several different sources of

information and make a number of assumptions.

Remember that everyone's experience is different. The figures in

our tables will not be exactly the same as your own costs but

they will give you a good idea of what to take into account and

how to go about estimating your own running costs if you want

to.

AA running costs tables are intended only as a general

guide to the costs associated with owning and running a

car.

AA running costs tables have no official status and are

not intended to be used as the basis for setting mileage

rates for business use of private cars.

Average value of car when new The AA has an unexplained reduction in the car value parameters. However TFL say that they used the ONS:

Vehicle Cost This figure has been assessed in the past by modelling different purchase strategies, making use of price information for both LTC taxis (TX models) and Vito taxis. This year, a number of factors mean that there is some uncertainty in the taxi market and prices are subject to rapid fluctuations. In addition it has proven difficult to get the information required. Use of a taxi-specific indicator would therefore be likely to misrepresent the underlying changes in costs, and we propose to use the ONS RPI figure for ‘purchase of motor vehicles’ which shows a year-on-year

price after the first mile is only one factor to consider. The London model was used as a basis for the Guildford model and it was not adopted in its entirety therefore different figures will be achieved. The GHA disagree with the AA rates for rate per mile and average car value however these were approved for use in the methodology in March 2015 and there is no authority to use different figures. No objection was raised when the calculator was introduced.

Objections to Hackney Carriage Fares 2015

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Objector Objection Response

increase of 0.8 per cent. I have used the ONS index to adjust. Cost of Capital 2.2% on the adjusted new cost of the vehicle. The figure you show is not based on the new price of the class of vehicle used. Insurance, Tyres, Service Labour Costs, and Replacement Parts All adjusted using the ONS statistics as TFL say:

Parts, Tyres, Garaging & Servicing Until recently, changes in these costs were assessed by detailed enquiries of suppliers to the taxi trade, but this approach became more difficult and the results less robust in recent years. In 2011 a study was conducted comparing the changes in costs associated with parts, tyres, garaging and servicing incorporated into the cost index over recent years with the yearly changes in the Office for National Statistics RPI figure for “motoring expenditure: maintenance of motor vehicles” (DOCT). The study concluded that the two series were comparable and it was agreed to use this ONS RPI figure to represent these cost index items in future. In September 2014 the DOCT RPI series showed an annual increase of 2.0 per cent. This gives an increase in the cost per mile of these components from 17.04p in 2013 to 17.37p in 2014

According to Don Brandon rates for taxi insurance did not fall as you suggest. Depreciation

The rate you use is the four year average for a car doing 10000 miles a year. You should be using a figure based on 27559 miles per year and a rate of depreciation of 73% (obtained from the mileage adjusted change in value of a VW Passat taken from over those 4 years from Parkers and CAP, the guides used by the professionals (see attached copy). The AA Notes say:

The cost of capital is correct at £541 from the AA Motoring Costs 2014 as per the methodology and no changes are required. The GHA dispute the data used for insurance, tyres, service, labour costs and replacement parts however the AA motoring costs used were approved for use in the methodology in March 2013 and there is no authority to use different ONS figures. The GHA suggest that taxi insurance did not fall as suggested. The approved AA Motoring costs have been used plus an additional £500 is added to the calculator to account for the business use as a taxi. Depreciation has been calculated using the formula in the approved methodology where depreciation occurs over 4 years.

Objections to Hackney Carriage Fares 2015

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Objector Objection Response

Cars lose value at different rates depending on their make, age,

mileage and condition. We assume that depreciation costs are

averaged over four years from purchase, and include typical

adjustments for different annual mileages in that period. Cars

generally depreciate at a slower rate as they get older.

We use different depreciation rates for annual mileages

which differ from the average 10,000 miles/year. (se attached

notes)

http://www.theaa.com/motoring_advice/running_costs/advice_rcosts_guide.html

From your spreadsheet “running cost 2013 example”

148.20

137.00

137.80

125.70

1.14

0.09

-11.86

-1.02

40

40

The value 1.14 appears to be a mistake amounting to an adjustment of 11.86 p per mile as opposed to 1.02p per mile in the second column. Dead mileage I still maintain that the Licencing Manager as was and the Auditor were justified in recommending adjusting for 65% dead mileage. You haven’t given any reasoned explanation why that shouldn’t be the case, and you did rely on Internal Audit for your justification of the approximated licence fee times and costs.

There has not been a mistake as suggested by the GHA in calculating the running per mile. The adjustment will vary depending on the fuel price at the point the fare calculator is run and the comments are not relevant as they relate to the previous fare calculation. The dead mileage was previously determined at 45% and there is no evidence to alter the dead mileage.

Objections to Hackney Carriage Fares 2015

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Objector Objection Response Notes to spreadsheet I have attached notes detailing the changes made to various spreadsheet cells which show a true cost per mile of 52p.

These suggestions are noted but no changes will be made as the information used is not from the sources agreed in the methodology.