Wirral Hackney Carriage Unmet Demand Study. Wirral Council

Transcription

1 Wirral Hackney Carriage Unmet Demand Study Wirral Council September 2011

2 Wirral Hackney Carriage Unmet Demand Study September 2011 Halcrow Group Limited Arndale House, Otley Road, Headingley, Leeds LS6 2UL tel fax halcrow.com Halcrow Group Limited has prepared this report in accordance with the instructions of Wirral Council, for the client s sole and specific use. Any other persons who use any information contained herein do so at their own risk. Halcrow Group Limited 2011

3 Contents 1 Study Objectives and Overview General 1 2 Background General Wirral Overview Background to the Hackney Carriage Market in Wirral Provision of Hackney Carriage Stands Hackney Carriage Fares and Licence Premiums Hackney Carriages and Radio Circuits Demand for Hackney Carriage Licences Merseyside Local Transport Plan Regeneration in Wirral 13 3 Benchmarking Introduction Fleet Composition Entry Control Policy Fares 19 4 Definition, Measurement and Removal of Significant Unmet Demand Introduction Overview Defining Significant Unmet Demand Measuring Patent Significant Unmet Demand Determining the Number of New Licences Required to Eliminate Significant Unmet Demand Note on Scope of Assessing Significant Unmet Demand 26 5 Evidence of Patent Unmet Demand Rank Observation Results Introduction The Balance of Supply and Demand Average Delays and Total Demand The Delay/ Demand Profile The General Incidence of Passenger Delay The Effective Supply of Vehicles 31

4 5.7 Comparing the results for Wirral with those of other unmet demand studies 31 6 Evidence of Suppressed Demand - Public Attitude Pedestrian Survey Results Introduction General Information Characteristics of Last Trip by Hackney or Private Hire vehicle Attempted Method of Hire Service Use Safety & Security Ranks 39 7 Consultation Introduction Consultation Direct Consultation Indirect Consultation Comments Received 44 8 Trade Survey Introduction Survey Administration General Operational Issues Driving Safety & Security Ranks Vehicle Conditions Fares Training Taxi Market in Wirral 55 9 Rank Review Introduction Rank Utilisation Deriving the Significant Unmet Demand Index Value Introduction Summary and Conclusions Introduction Significant Unmet Demand Public Perception 65

5 11.4 Current Vehicle Policy Entry Control Policy Patterns of Availability Recommendations 67 A.1 Appendix A Rank List A.2 Appendix B Rank Observation Programme A.3 Appendix C Public Attitude Survey Results A.4 Appendix D Consultation Responses A.5 Appendix E Trade Survey responses

6 1 Study Objectives and Overview 1.1 General This study has been conducted by Halcrow on behalf of Wirral Borough Council (Wirral BC). Wirral BC wishes to undertake an unmet demand study for hackney carriages in the borough of Wirral. Wirral BC does not numerically limit the number of hackney carriages in the borough and is seeking advice as to whether to amend this policy. The key objectives of the study are to: Determine whether there is any evidence of significant unmet demand for Hackney Carriage Services in Wirral; and Consider whether changes are required to the current policy of having no limit to the number of licences that are issued. In line with the specification, Wirral BC wishes: To identify the current level of demand for Hackney Carriages; To assess whether the supply of Hackney Carriages matches demand; To report on the number of Hackney Carriages in Wirral in the light of any findings; To produce a report of their findings with reference to the legislative framework governing Hackney Carriages; and To present the key findings of the study to the Licensing, Health and Safety and General Purposes Committee. In 2010 the Department for Transport (DfT) re issued Best Practice Guidance for Taxi and Private Hire licensing. The Guidance restates the DFT s position regarding quantity restrictions. Essentially, the DfT stated that the assessment of significant unmet demand, as set out in Section 16 of the 1985 Act, is still necessary but not sufficient in itself to justify continued entry control. The Guidance provides local authorities with assistance in local decision making when they are determining the licensing policies for their local area. Guidance is provided on a range of issues including: flexible taxi services, vehicle licensing, driver licensing and training. The Equality Act 2010 provides a new cross-cutting legislative framework to protect the rights of individuals and advance equality of opportunity for all; to update, simplify and strengthen the previous legislation; and to deliver a simple, modern and accessible framework of discrimination law which protects individuals from unfair treatment and promotes a fair and more equal society. The provisions in the Equality Act will come into force at different times to allow time for the people and organisations affected by the new laws to prepare for them. The Government is considering how the different provisions will be commenced so that the Act is implemented in an effective and proportionate way. Some provisions have come into force on the 1st October 2010 however most of the provisions for taxi accessibility will be come in to play later in

7 Sections 165, 166 and 167 of the Equality Act 2010 are concerned with the provision of wheelchair accessible vehicles and place obligations on drivers of registered vehicles to carry out certain duties unless granted an exemption by the licensing authority on the grounds of medical or physical condition. From 1 October 2010, Section 166 allows taxi drivers to apply to their licensing authority for an exemption from Section 165 of the Equality Act Section 165 and 167 will not come in to effect until after April Section 161 of the Equality Act 2010 qualifies the law in relation to unmet demand, to ensure licensing authorities that have relatively few wheelchair accessible taxis operating in their area, do not refuse licences to such vehicles for the purposes of controlling taxi numbers. For section 161 to have effect, the Secretary of State must make regulations specifying: the proportion of wheelchair accessible taxis that must operate in an area before the respective licensing authority is lawfully able to refuse to license such a vehicle on the grounds of controlling taxi numbers; and the dimensions of a wheelchair that a wheelchair accessible vehicle must be capable of carrying in order for it to fall within this provision. The DfT plans to consult on the content of regulations before section 161 comes in to force. The actual date is unknown. 2

8 2 Background 2.1 General This section of the report provides a general background to the taxi market in the Wirral and the relevant legislation governing the market. 2.2 Wirral Overview Wirral Borough is situated in Merseyside. The district s population stood at 312,293 at the 2001 census. Wirral is the third largest Metropolitan Council in the North West. The borough is mainly urban in outlook. 2.3 Background to the Hackney Carriage Market in Wirral The authority does not maintain a policy of quantity control and at the time of the study the authority licensed 289 Hackney Carriage vehicles. This provides Wirral with a hackney carriage provision of one hackney per 1,080 residents a slightly lower level of provision than is typical of a derestricted authority. Between 1974 and 1997 Wirral BC maintained a limit of 86 hackney carriage vehicle licences. Between the years of 1998 and 2002 this limit increased to 148. Following lengthy legal proceedings, Wirral BC decided to remove the numerical limit in 2002 and restrict vehicles according to vehicle quality. In 2003 Wirral BC appointed Halcrow to assist with the best value review of its licensing function in relation to private hire and hackney carriage licences. In 2006 KNW were commissioned by the authority to undertake an unmet demand study. This study identified a small but significant level of unmet demand. 2.4 Provision of Hackney Carriage Stands There are currently 28 official ranks located in the Wirral licensing district. A full rank audit is shown in Appendix A and a list of the ranks observed is included in Chapter 5. Plates 1-4 show four of the main ranks in the Wirral. 3

9 Plate 1 Hamilton Street, Hamilton Square Train Station, Birkenhead Plate 2 Grange Road, Birkenhead 4

10 Plate 3 Claughton Road, Birkenhead Plate 4 Wallasey Road, Liscard 5

11 2.5 Hackney Carriage Fares and Licence Premiums Hackney carriage fares are regulated by the Local Authority. There are four tariffs - one daytime tariff (6am 10pm); one night time rate (10pm 6am) and daytime public and bank holiday rate; a third public and bank holiday evening rate; and a Christmas and New Year rate. The standard charge tariff is made up of two elements; an initial fee (or drop ) for entering the vehicle, and fixed price additions for specified distances. A standard two-mile daytime fare undertaken by one individual would therefore be Table 2.1 outlines the fare structure in more detail. 6

12 Table 2.1 Wirral Hackney Carriage Fare Tariff Price Tariff 1 Day rate: 6.00am to 10.00pm First 820 yards or part thereof Each subsequent 260 yards p Tariff 2 Night rate: 10.00pm to 6.00am and Public and Bank Holiday day rate: 6.00am to 10.00pm (including Good Friday and Easter Sunday) First 966 yards or part thereof Each subsequent 218 yards p Tariff 3 Public and Bank Holiday night rate: midnight to 6.00am and 10.00pm to midnight (including Good Friday and Easter Sunday) First 966 yards or part thereof Each subsequent 182 yards p Tariff 4 Christmas and New Year rate (Each journey on Christmas Eve from hours to include Christmas Day and Boxing Day, until hours the following day and for each journey on New Year s Eve from hours to include New Year s Day until hours the following day) First 966 yards or part thereof Each subsequent 137 yards p Extra charges For each passenger in excess of two per journey (excluding children under 5 years of age) For each animal (other than an assistance dog) Waiting time for each minute or part thereof Bulky items Fouling charge 10p p 5 35 Source: Wirral Borough Council The Private Hire and Taxi Monthly Magazine publish monthly league tables of the fares for 380 authorities over a two mile journey. Each journey is ranked with one being the most expensive, the May 2011 table shows the Wirral rated 250th in the table therefore the Wirral has lower than average fares. Table 2.3 provides a comparison of where neighbouring and nearby authorities rank in terms of fares. It 7

13 shows that the fares in the Wirral is the second most expensive in comparison to neighbouring authorities. Table 2.3 Comparison of Neighbouring Authorities in Terms of Fares (figures are ranked out of a total of 380 Authorities with 1 being the most expensive) Local Authority Rank Chester 165 Wirral 250 Halton 260 Liverpool 281 Ellesmere Port 325 Sefton 347 St Helens 349 Vale Royal 359 Knowsley 363 Source: Private Hire and Taxi Monthly, May Hackney Carriages and Radio Circuits In order to determine the proportion of hackney carriages on radio circuits the main operators were contacted by telephone. Figure 2.1 provides further detail. Out of the nine operators contacted some 186 hackneys were identified as being assigned to a radio circuit. Figure 2.1 Hackney Carriages on Radio Circuits Argyle Park Abbey Taxis Satellite Cars Road Runner Wirral Callback Hackney Direct Allied Wirral Mersey Cabs Taxi Connect Others/not on circuit 8

14 2.7 Demand for Hackney Carriage Licences Figure 2.2 shows the number of hackney licences that have been issued between April 2010 and July It demonstrates how demand has fluctuated with a peak of five licences being issued in October Figure 2.2 Demand for Hackney Carriage Licences No of licences issued Apr- 10 M ay- 10 Jun- 10 Jul- 10 Aug- 10 Sep- 10 Oct- 10 Nov- 10 Dec- 10 Jan- 11 Feb- 11 Mar- 11 Apr- 11 M ay- 11 Jun- 11 Jul- 11 Date 2.8 Merseyside Local Transport Plan This section considers the taxi (hackney and private hire) market within a wider context of transport policy. The Local Transport Plan process requires local authorities to consider, in a holistic manner, how transport provision for their area contributes to wider objectives such as economic growth, accessibility, the environment and safety. The Merseyside LTP (Local Transport Planning Partnership) consists of Merseytravel and the five district councils of Merseyside - Knowsley, Liverpool, Sefton, St Helens, and Wirral. In 2008, the Merseyside LTP Partnership and Halton Council won Beacon status from the Government for their groundbreaking access work. The First Local Transport Plan for Merseyside was given to the Government in July It set out a 10 year strategy and a 5 year plan to help solve some of the social, economic and environmental problems in Merseyside by making the transport system better for the people in Merseyside. Merseyside Partners finished the Second Local Transport Plan in July It sets out the transport vision for , which was for a 'a fully integrated safe transport network for Merseyside which supports economic and social regeneration and ensures good access for all, and which is operated to the highest standards to protect the environment and ensure quality of life. The aims of LTP2 were to: Provide appropriate infrastructure to improve the capacity and efficiency of the transport network and support areas where the economy is growing; 9

15 Provide access for everyone to services such as employment, education and health; Manage demand for travel to ensure that our roads do not become congested and affect the efficient movement of public transport and freight; Protect/enhance the environment by taking positive measures to reduce the impacts of travel demand; Support a healthier community by addressing air and noise problems caused by traffic and promoting cycling and walking; and Make best use of our existing resources by ensuring an efficient maintenance regime. Taxis play an important role in the transport of people in Merseyside and the government Action Plan for Taxis and Private Hire Vehicles makes it clear that they are an integral part of the LTP process. The LTP2 aim was to build on the approach adopted in the first LTP. LTP2 recognises that the Wirral has seen a rapid increase in hackney vehicles since the hackney limit was removed in It also states that there is evidence of severe over-ranking. Merseytravel ensure that all new schemes include explicit thought towards taxi provision; taxis are well linked to the rail service in the area. LTP2 had a 5 Year Programme which aimed to: Investigate use of taxis to link with other demand responsive modes as part of the development of the Demand Responsive Transport (DRT); Within three years provide a more robust monitoring regime to shape future policy; Provide assistance to other modes such as night buses when there is a clear objective to clear the city and town centre as safely as possible, and in order to progress this effectively the proposals are integrated within TravelSafe. The Merseyside Taxi Training Scheme (MTTS) is being developed and will focus on Customer care and DDA issues. Funding will be sought from a wide range of agencies including operators the licensing authorities and a range of government packages and skill development organisations. The importance of a high quality taxi provision will be recognised by the provision of improved taxi ranks, new information provision and better integration with the public transport network. This will be particularly important at key locations such as the Airport, Lime Street Station, City Centre, John Lennon Airport and other key destinations. Ensure that measures are put in place by 2008 to support Capital of Culture through programmes such as the City Centre Movement Strategy The LTP2 recognised that the role of taxis, integrated within the single integrated public transport network is important: They can reduce congestion by offering realistic alternatives to the car; 10

16 Better vehicle standards will reduce emissions and improve air quality; They will be an important element in opening up new journey opportunities identified through the accessibility planning process; and A high quality fleet can help to reduce road accidents particularly for leisure time activities in the evening and at night. The LTP2 covered the years and the third Local Transport Plan is now in place. The preferred strategy goals are as follows; To ensure the transport system supports the priorities of the Liverpool City Region and its Local Strategic Partnerships. To provide and promote a clean and low carbon transport system. To ensure the transport system promotes and enables improved health and wellbeing To ensure the transport system allows people to connect easily with employment, services and social activities To ensure the transport network supports the economic success of the Liverpool City Region by the efficient movement of people and goods; and To maintain assets to a high standard. The LTP3 consultation documents refer to taxis and the role they play in Merseyside in a number of areas. The role of taxis in contributing to emissions is an area which has had comparatively little attention over recent years. The impact of taxis on the environment is mixed; where there is opportunity to use them flexibly in place of larger services they could bring considerable environmental benefits, however taxi fleets cover large mileages often in urban settings where air quality is likely to be a concern and any improvements to the environmental performance of the fleet could bring considerable benefits. There are some improvements which could be made very quickly, such as increased education around eco-driving techniques and vehicle choice. In the short-term the focus will be on increasing liaison with operators, establishing best practice guidelines and encouraging improvements where they can be made in a cost-effective way. The LTP3 will work with public sector partners to develop procurement policies which incentivise investment in low emission vehicles. The long-term strategy for taxis is less clear, the applicability of new fuel and vehicle technologies for taxi use is untested. LTP3 aims to lead understanding in this field by supporting a demonstration project, trialling the feasibility of alternative fuels and low emission technologies for use in the taxi fleet. If new low emission technologies are pursued, financing arrangements such as facilitating leasing agreements with private investment organisations will be explored. Taxis can be important to people who have difficulty using mainstream public transport services. The next LTP will review the most appropriate means of transport to fulfil specific requirements, which could include a combination of taxis, community transport services or services operated by the health or social services sector, 11

17 As part of this process, Merseytravel are thinking about more innovative solutions, to facilitate measures such as independent travel training, neighbourhood travel teams or personalised travel planning. This will also include the role of taxis and community transport operators The introduction of new technologies and potential changes to the role of supported bus services may result in there being greater overlap between the roles of public transport and taxis in the future. Guidance from DfT on taxi licensing suggests that in developing proposals for taxis in LTP s the following should be considered: Quantity controls, if any and plans for their review; Licensing conditions, with a view to safety but also to good supply of taxi and PHV services; Fares; On street availability, especially through the provision of taxi ranks; Vehicle accessibility for people with disabilities; Encouragement of flexible services. The LTP3 will ensure greater inter-working with the district licensing authorities and taxi trade to develop proposals including creating a Merseyside Taxi Quality Partnership (TQP) to take forward an incremental, integrated approach to the role of taxis in the LTP. In the short term, particular attention will be paid to those policy areas which are within the remit of the five district licensing authorities and Merseytravel. This may include: Merseytravel will examine integration of taxi services with the supported bus service network, in line with policies on supported bus services such as using taxis in place of buses on niche services like Merseylink, where this would prove better value for money and beneficial in emissions terms. Taxi voucher scheme as part of an expanded WorkWise project the offer of a one month bus pass or the equivalent in taxi vouchers. Flat fare of 1 or alongside supported bus fares for any taxi/phv under contract to Merseytravel fixed routed/flexibly routed services. Taxibus resource to cover flexibly routed transport options. Feeder services into main public transport hubs. Add on to car sharing scheme web sites to include information on taxis. Use of taxis for replacement services due to roadwork and major events. Taxi operator s ability to bid for specific supported bus services. 12

18 2.9 Regeneration in Wirral A number of regeneration projects are underway across the Wirral which are likely to increase residents and visitors to the area. New Brighton The Wallasey Waterfront is a new retail and leisure development that will be completed in The 45 million development comprises a conference centre, cinema, supermarket, hotel as well as a number of restaurants and bars. Given the range of use it is likely that this may increase the demand for taxis, especially with the night time economy. Wirral Waters Wirral Waters is an 18 million sq ft mixed use waterfront development and the largest such regeneration project in the UK. The development is concentrated on the Birkenhead docks and it is estimated that some 20,000 jobs will be created in Wirral. The construction of the site will take place over the next 30 years. 13

19 3 Benchmarking 3.1 Introduction In order to assess the current level of taxi provision in Wirral and to determine whether the current vehicles permitted by Wirral Borough Council are fit for purpose, it is necessary to benchmark Wirral against other authorities which are classified by the Audit Commission as its statistically nearest neighbours. The statistically nearest neighbours are authorities which are of similar socioeconomic standing to Wirral and can be used for comparison purposes. They include; Sefton, North Tyneside, Redcar and Cleveland, Plymouth, Darlington, North East Lincolnshire, Dudley, Southend-On-Sea, St Helens, Northumberland, Blackpool, Bury, Doncaster, Derby, and Stockton-on-Tees. Unfortunately there was no data available for Northumberland. Wirral has been benchmarked against these authorities on the following characteristics: Fleet composition; Fares Population per hackney; and Entry Control Policy. 3.2 Fleet Composition Figure 3.1 documents the fleet size for statistically similar licensing authorities in the UK. Plymouth has the largest hackney fleet (360 hackney vehicles) however Sefton has the largest overall fleet with 2,970 hackney and private hire vehicles combined. Wirral has joint fourth (along with Stockton-On-Tees) largest hackney carriage fleet. Even though the Wirral has a large hackney fleet in comparison to the other authorities, the private hire fleet is the dominant industry in the Wirral. 14

20 St Helen's Stockton-on-tees Sefton Derby Darlington Wirral North Tyneside Doncaster Redcar & Cleveland Plymouth Bury Figure 3.1 Fleet composition Private Hire Hackney Carriages Number of Vehicles Blackpool Dudley North East Lincolnshire Southend-on-sea

21 In terms of the population per hackney, Figure 3.2 documents the results for the licensing authorities. Redcar and Cleveland has the lowest population per hackney carriage, identifying that Redcar and Cleveland has the best provision compared to similar authorities. St Helens has the worst provision of hackney carriages. Wirral has the 4th highest population per hackney carriage, showing that Wirral does not have a high provision of hackneys in comparison to similar authorities. Figure 3.3 shows population per vehicle; therefore it includes both hackney and private hire vehicles. This shows different results, with Stockton-on-Tees having the highest population per hackney. Sefton has the lowest population per hackney and therefore has the best provision. Wirral has the 7th lowest population per hackney, making Wirral have an average provision of taxis across the borough. 16

22 Southend-on-sea Derby Figure 3.2 Population per hackney across the different licensing authorities Number of people per hackney carriage 0 Stockton-on-tees Doncaster Redcar & Cleveland North Tyneside St Helen's Bury Blackpool Plymouth Wirral Sefton Dudley Darlington North East Lincolnshire 17

23 Figure 3.3 Population per vehicle (hackney and phv) across the different licensing authorities Number of people per vehicle 0 Stockton-on-tees Darlington Doncaster St Helen's Dudley Blackpool Southend-on-sea Redcar & Cleveland Wirral Plymouth Derby North East Lincolnshire Bury North Tyneside Sefton 18

24 3.3 Entry Control Policy Table 3.1 documents the entry control policies for the 14 authorities. Wirral Borough Council does not enforce a numerical limit, as do 7 other similar authorities. The remaining 7 authorities are restricted authorities. Table 3.1 Authority Entry Control Policy for the Authorities Control Policy Blackpool Dudley Restricted De-restricted North East Lincolnshire Southend-on-sea Bury Plymouth Darlington Wirral North Tyneside Doncaster Derby Redcar & Cleveland Sefton St Helen's Restricted* Restricted De-restricted Restricted De-restricted De-restricted Restricted De-restricted De-restricted De-restricted Restricted Restricted 3.4 Fares * recently re restricted Figure 3.4 details the average fare for a two mile journey across the benchmarked authorities. The average cost of a two mile journey is 4.97, thereby highlighting that fares in the Wirral are typically average at The most expensive authority is Blackpool at 5.60 for a two mile journey and, the least expensive authority is St Helen s at

25 Figure 3.4 Average Fare for a two mile journey Blackpool Dudley North East Lincolnshire Southend-on-sea Bury Plymouth Darlington Wirral North Tyneside Doncaster Derby Redcar & Cleveland Sefton St Helen's Stockton-on-tees Fare Average Fare 20

26 4 Definition, Measurement and Removal of Significant Unmet Demand 4.1 Introduction Section 4 provides a definition of significant unmet demand derived from experience of over 100 unmet demand studies since This leads to an objective measure of significant unmet demand that allows clear conclusions regarding the presence or absence of this phenomenon to be drawn. Following this, a description is provided of the Significant Unmet Demand Simulation (SUDSIM) model which is a tool developed to determine the number of additional hackney licences required to eliminate significant unmet demand, where such unmet demand is found to exist. This method has been applied to numerous local authorities and have been tested in the courts as a way of determining if there is unmet demand for Hackney Carriages. 4.2 Overview Significant Unmet Demand (SUD) has two components: patent demand that which is directly observable; and suppressed demand that which is released by additional supply. Patent demand is measured using rank observation data. Suppressed (or latent) demand is assessed using data from the rank observations and public attitude interview survey. Both are brought together in a single measure of unmet demand, ISUD (Index of Significant Unmet Demand). 4.3 Defining Significant Unmet Demand The provision of evidence to aid licensing authorities in making decisions about hackney carriage provision requires that surveys of demand be carried out. Results based on observations of activity at hackney ranks have become the generally accepted minimum requirement. The definition of significant unmet demand is informed by two Court of Appeal judgements: R v Great Yarmouth Borough Council ex p Sawyer (1987); and R v Castle Point Borough Council ex p Maude (2002). The Sawyer case provides an indication of the way in which an Authority may interpret the findings of survey work. In the case of Sawyer v. Yarmouth City Council, 16 June 1987, Lord Justice Woolf ruled that an Authority is entitled to consider the situation from a temporal point of view as a whole. It does not have to condescend into a detailed consideration as to what may be the position in every limited area of the Authority in relation to the particular time of day. The area is required to give effect to the language used by the Section (Section 16) and can ask itself with regard to the area as a whole whether or not it is satisfied that there is no significant unmet demand. The term suppressed or latent demand has caused some confusion over the years. It should be pointed out that following Maude v Castle Point Borough Council, 21

27 heard in the Court of Appeal in October 2002, the term is now interpreted to relate purely to that demand that is measurable. Following Maude, there are two components to what Lord Justice Keene prefers to refer to as suppressed demand : what can be termed inappropriately met demand. This is current observable demand that is being met by, for example, private hire cars illegally ranking up; and that which arises if people are forced to use some less satisfactory method of travel due to the unavailability of a hackney carriage. If demand remained at a constant level throughout the day and week, the identification and treatment of significant unmet demand would be more straightforward. If there were more cabs than required to meet the existing demand there would be queues of cabs on ranks throughout the day and night and passenger waiting times would be zero. Conversely, if too few cabs were available there would tend to be queues of passengers throughout the day. In such a case it would, in principle, be a simple matter to estimate the increase in supply of cabs necessary to just eliminate passenger queues. Demand for hackney carriages varies throughout the day and on different days. The problem, introduced by variable demand, becomes clear when driver earnings are considered. If demand is much higher late at night than it is during the day, an increase in cab supply large enough to eliminate peak delays will have a disproportionate effect on the occupation rate of cabs at all other times. Earnings will fall and fares might have to be increased sharply to sustain the supply of cabs at or near its new level. The main implication of the present discussion is that it is necessary, when considering whether significant unmet demand exists, to take account of the practicability of improving the standard of service through increasing supply. 4.4 Measuring Patent Significant Unmet Demand Taking into account the economic, administrative and legal considerations, the identification of this important aspect of significant unmet demand should be treated as a three stage process as follows: identify the demand profile; estimate passenger and cab delays; and compare estimated delays to the demand profile. The broad interpretation to be given to the results of this comparison are summarised in Table

28 Table 4.1 Existence of Significant Unmet Demand (SUD) Determined by Comparing Demand and Delay Profiles Demand is: Highly Peaked Not Highly Peaked Delays during peak only No SUD Possibly a SUD Delays during peak and other times Possibly a SUD Possibly a SUD It is clear from the content of the table that the simple descriptive approach fails to provide the necessary degree of clarity to support the decision making process in cases where the unambiguous conclusion is not achievable. However, it does provide the basis of a robust assessment of the principal component of significant unmet demand. The analysis is therefore extended to provide a more formal numerical measure of significant unmet demand. This is based on the principles contained in the descriptive approach but provides greater clarity. A description follows. The measure feeds directly off the results of observations of activity at the ranks. In particular it takes account of: case law that suggests an authority should take a broad view of the market; the effect of different levels of supply during different periods at the rank on service quality; the need for consistent treatment of different authorities, and the same authority over time. The Index of Significant Unmet Demand (ISUD) was developed in the early 1990 s and is based on the following formula. The SF element was introduced in 2003 and the LDF element was introduced in 2006 to reflect the increased emphasis on latent demand in DfT Guidance ISUD = APD x PF x GID x SSP x SF x LDF Where: APD = Average Passenger Delay calculated across the entire week in minutes. PF = Peaking Factor. If passenger demand is highly peaked at night the factor takes the value of 0.5. If it is not peaked the value is 1. Following case law this provides dispensation for the effects of peaked demand on the ability of the Trade to meet that demand. To identify high peaking we are generally looking for demand at night (at weekends) to be substantially higher than demand at other times. GID = General Incidence of Delay. This is measured as the proportion of passengers who travel in hours where the delay exceeds one minute. SSP = Steady State Performance. The corollary of providing dispensation during the peaks in demand is that it is necessary to focus on performance during normal hours. This is measured by the proportion of hours during weekday daytimes when the market exhibits excess demand conditions (i.e. passenger queues form at ranks). 23

29 SF = Seasonality factor. Due to the nature of these surveys it is not possible to collect information throughout an entire year to assess the effects of seasonality. Experience has suggested that hackney demand does exhibit a degree of seasonality and this is allowed for by the inclusion of a seasonality factor. The factor is set at a level to ensure that a marginal decision either way obtained in an untypical month will be reversed. This factor takes a value of 1 for surveys conducted in September to November and March to June, i.e. typical months. It takes a value of 1.2 for surveys conducted in January and February and the longer school holidays, where low demand the absence of contract work will bias the results in favour of the hackney trade, and a value of 0.8 for surveys conducted in December during the pre Christmas rush of activity. Generally, surveys in these atypical months, and in school holidays, should be avoided. LDF = Latent Demand Factor. This is derived from the public attitude survey results and provides a measure of the proportion of the public who have given up trying to obtain a hackney carriage at either a rank or by flagdown during the previous three months. It is measured as 1+ proportion giving up waiting. The inclusion of this factor is a tactical response to the latest DfT guidance. The product of these six measures provides an index value. The index is exponential and values above the 80 mark have been found to indicate significant unmet demand. This benchmark was defined by applying the factor to the 25 or so studies that had been conducted at the point it was developed. These earlier studies had used the same principles but in a less structured manner. The highest ISUD value for a study where a conclusion of no significant unmet demand had been found was 72. The threshold was therefore set at 80. The ISUD factor has been applied to over 80 studies by Halcrow and has been adopted by others working in the field. It has proved to be a robust, intuitively appealing and reliable measure. Suppressed/latent demand is explicitly included in the above analysis by the inclusion of the LDF factor and because any known illegal plying for hire by the private hire trade is included in the rank observation data. This covers both elements of suppressed/latent demand resulting from the Maude case referred to above and is intended to provide a belt and braces approach. A consideration of latent demand is also included where there is a need to increase the number of hackney carriage licences following a finding of significant unmet demand. This is discussed in the next section. 4.5 Determining the Number of New Licences Required to Eliminate Significant Unmet Demand To provide advice on the increase in licences required to eliminate significant unmet demand, Halcrow has developed a predictive model. SUDSIM is a product of 20 years experience of analysing hackney carriage demand. It is a mathematical model, which predicts the number of additional licences required to eliminate significant unmet demand as a function of key market characteristics. SUDSIM represents a synthesis of a queue simulation work that was previously used (1989 to 2002) to predict the alleviation of significant unmet demand and the ISUD factor described above (hence the term SUDSIM). The benefit of this approach is that it provides a direct relationship between the scale of the ISUD factor and the number of new hackney licences required. 24

30 SUDSIM was developed taking the recommendations from 14 previous studies that resulted in an increase in licences, and using these data to calibrate an econometric model. The model provides a relationship between the recommended increase in licences and three key market indicators: the population of the licensing Authority; the number of hackneys already licensed by the licensing Authority; and the size of the SUD factor. The main implications of the model are illustrated in Figure 4.1 below. The figure shows that the percentage increase in a hackney fleet required to eliminate significant unmet demand is positively related to the population per hackney (PPH) and the value of the ISUD factor over the expected range of these two variables. Figure 4.1 Forecast Increase in Hackney Fleet Size as a Function of Population Per Hackney (PPH) and the ISUD Value % increase in licences ISUD Value Where significant unmet demand is identified, the recommended increase in licences is therefore determined by the following formula: New Licences = SUDSIM x Latent Demand Factor Where: 25

31 Latent Demand Factor = (1 + proportion giving up waiting for a hackney at either a rank or via flagdown) 4.6 Note on Scope of Assessing Significant Unmet Demand It is useful to note the extent to which a licensing authority is required to consider peripheral matters when establishing the existence or otherwise of significant unmet demand. This issue is informed by R v Brighton Borough Council, exp p Bunch This case set the precedent that it is only those services that are exclusive to hackney carriages that need concern a licensing authority when considering significant unmet demand. Telephone booked trips, trips booked in advance or indeed the provision of bus type services are not exclusive to hackney carriages and have therefore been excluded from consideration. 1 See Button JH Taxis Licensing Law and Practice 2 nd edition Tottel 2006 P

32 5 Evidence of Patent Unmet Demand Rank Observation Results 5.1 Introduction This section of the report highlights the results of the rank observation survey. The rank observation programme covered a period of 210 hours during February and March Some 8,021 passengers and 6,699 cab departures were recorded. A summary of the rank observation programme is provided in Appendix B. The results presented in this Section summarise the information and draw out its implications. This is achieved by using five indicators: The Balance of Supply and Demand this indicates the proportion of the time that the market exhibits excess demand, equilibrium and excess supply; Average Delays and Total Demand this indicates the overall level of passengers and cab delays and provides estimates of total demand; The Demand/Delay Profile this provides the key information required to determine the existence or otherwise of significant unmet demand; The Proportions of Passengers Experiencing Given Levels of Delay this provides a guide to the generality of passenger delay; and The Effective Supply of Vehicles this indicates the proportion of the fleet that was off the road during the survey. A rank reconnaissance was undertaken of all ranks in Wirral at the start of the study. Following this reconnaissance it was decided to observe activity at ten of the ranks where activity was likely to be seen. This was felt to be a representative sample of where demand was likely to be identified across Wirral. 5.2 The Balance of Supply and Demand The results of the analysis are presented in Table 5.1 below. The predominant market state is one of equilibrium. Excess supply (queues of cabs) was experienced during 26% of the hours observed while excess demand (queues of passengers) was experienced 2% of the hours observed. Conditions are favourable to customers at all times of day with the most favourable time being the weekday periods. 27

33 Table 5.1 The Balance of Supply and Demand in the Wirral Rank-Based Hackney Carriage Market (Percentage of hours observed) Period Excess Demand (Maximum Passenger Queue 3) Equilibrium Excess Supply (Minimum Cab Queue 3) Weekday Weekend Day Night Day Night Sunday Day Total NB Excess Demand = Maximum Passenger Queue 3. Excess Supply = Minimum Cab Queue 3 values derived over 12 time periods within an hour. 5.3 Average Delays and Total Demand The following estimates of average delays and throughput were produced for each of the main ranks in Wirral (Table 5.2). The survey suggests some 8,021 passenger departures occur per week from ranks in Wirral involving some 6,699 cab departures. The taxi trade is somewhat concentrated at the rank on Claughton Road, Birkenhead accounting for 39% of the total. On average, cabs wait minutes for a passenger and the longest average waiting time was at Grange Road where taxis waited on average minutes for a customer. On average, passengers wait 0.12 minutes for a cab. The longest passenger delay was seen on Hoylake Road at 1.93 minutes. It is worth noting that no passenger or cab activity was observed at Marine Promenade, New Brighton and Station Road, Hoylake. 28

34 Table 5.2 Average Delays and Total Demand (Delays in Minutes) (0.22 minutes is 13.2 seconds) Rank Passenger Departures Cab Departures Average Passenger Delay in minutes (seconds) Average Cab Delay in minutes Claughton Road, Birkenhead 3,128 2, (0.6) Grange Road, Birkenhead (25.2) Hamilton Street, Birkenhead 950 1, Conway Street, Birkenhead 1, Wallasey Road, Liscard 2,141 1, Liscard Village, Liscard Marine Promenade, New Brighton Hoylake Road, Moreton Allport Lane, Bromborough Station Road, Hoylake Total 8,021 6, The Delay/ Demand Profile Figure 5.1 provides a graphical illustration of passenger demand for the Monday to Saturday period between the hours of 09:00 and 03:00. The first column in each time period shows average passengers per weekday, the second shows average passengers per weekend day and the third shows the average passengers for a typical week. 29

35 Figure 5.1 Passenger Demand by Time of Day in 2011 (Monday to Saturday) Average Passengers Weekday Weekend Hour Starting All Week 2 per. Mov. Avg. (All Week) The profile of demand shows a number of peaks in demand during the day and late at night between 2am and 3am. We therefore conclude that this is not a highly peaked demand profile. This has implications for the interpretation of the results (see Chapter 6 below). Figure 5.2 provides an illustration of passenger delay by the time of day for the weekday and weekend periods. It shows that there is passenger delay on a weekend evening at 6pm where delay peaks to 1.88 minutes. Figure 5.2 Passenger Delay by Time of Day in 2011 (Monday to Saturday) 3.0 Weekday Weekend 2.0 Minutes Hour Starting

36 5.5 The General Incidence of Passenger Delay The rank observation data can be used to provide a simple assessment of the likelihood of passengers encountering delay at ranks. The results are presented in Table 5.3 below. Table 5.3 General Incidence of Passenger Delay (Percentage of passengers travelling in hours where delay exceeds one minute) Year Delay > 0 Delay > 1 minute Delay > 5 minutes In 2011 the proportion likely to experience more than a minute of delay is 0.41% showing little incidences of passenger delay. It is this proportion that is used within the ISUD as the Generality of Passenger Delay. 5.6 The Effective Supply of Vehicles Observers were required to record the hackney carriage licence plate number of vehicles departing from ranks. In this way we are able to ascertain the proportion of the fleet that was operating during the survey. During the daytime period (0700 to 1800) some 201 (70.3%) of the hackney fleet were observed at least once during the period of the study. During the evening/night-time period (1800 to 0700) some 109 (38.1%) of the hackney fleet were also observed at least once during the rank observations. In total 76.2% of the trade was observed at least once. 5.7 Comparing the results for Wirral with those of other unmet demand studies Comparable statistics are available from 53 local authorities that Halcrow have recently conducted studies in and these are listed in Table 5.4. The table highlights a number of key results including: population per hackney carriage at the time of the study (column one); the proportion of rank users travelling in hours in which delays of greater than zero, greater than one minute and greater than five minutes occurred (columns two to four); average passenger and cab delay calculated from the rank observations (columns five to six); the proportion of Monday to Thursday daytime hours in which excess demand was observed (column seven); the judgement on whether rank demand is highly peaked (column eleven); and a numerical indicator of significant unmet demand. The following points (obtained from the rank observations) may be made about the results in Wirral compared to other areas studied: 31

37 population per hackney carriage is lower than the average overall value i.e. provision is higher; the proportion of passengers, who travel in hours where some delay occurs, is just 4.23%, which is much lower than the average (24%) for the districts analysed; overall average passenger delay at 0.12 minutes is lower than the average value; overall average cab delay at minutes is higher than the average for the districts shown; and the proportion of weekday daytime hours with excess demand conditions is below the average of 7%. 32

38 Table 5.4 District and Year of Survey A Comparison of Wirral with Other Authorities Studied (values in italics make up ISUD) Population per Hackney Proportion Waiting at Ranks Proportion Waiting >= 1 Min Proportion Waiting >= 5 Mins Average Passenger Delay Average % Excess Cab Delay Demand Demand Peaked, Yes=0.5 No=1 Wirral 11 * 1, ISUD Indicator Value West Berkshire 10 * Pendle 10 1, Oxford 09 1, Brighton & Hove Leicester Blackpool Hull 09 1, Rochdale 09 1, North Tyneside Rotherham 08 5, Preston Scarborough 08 1, York 08 1, Barrow Stirling 08 1, Torridge 08 1, Richmondshire Exeter 07/08 1, Manchester Bradford 07 1, Barnsley 07 3, Blackpool Broadstairs 06 1, Margate 06 1, Ramsgate 06 1, Plymouth Brighton Thurrock 06 1, Trafford 06 2, Leicester Bournemouth Bradford 03 2, Oldham 03 2, Thurrock 03 1, Blackpool Wolverhampton 03 3, Bournemouth Brighton Exeter 02 2, Wigan 02 2, Cardiff Edinburgh Torridge 01 1, Worcester 01* Ellesmere Port 01 2, ,928 Southend South Ribble 00 * Leeds 00 1, ,046 Sefton 00 1, Leicester 00 * Castle Point 00 2, Bedford 00 2, Thurrock 00 1, Manchester ,638 AVERAGE 1, KEY * Derestricted Authorities 33