NSW TAXI DRIVERS ASSOCIATION Inc FOR BAILEE DRIVERS, OWNER DRIVERS, AND LESSEE DRIVERS, Inclusive.

Inc. no.9882558       ABN 98 653 928 763      PO Box 322, Alexandria NSW 2015

`A Fair Share of a Fair Fare' President : Anne Turner Email: Secretary: Trevor Bradley

15APRIL2011

 

PROTEST  SUBMISSION   

1. This submission is in public protest to IPART by the NSW Taxi Drivers Association Inc.  In this public protest to IPART, for the first time ever, the NSW TDA Inc has opted out of making any comments on this year’s IPART 2011 taxi fare review.  It is made by the 15April2011 due date for submissions. 

2. The NSW TDA Inc has made submissions to IPART for many years.  As IPART is aware, it has done so at the significant sacrifice of time and earnings of its volunteer taxi driver members.

3. The NSW Taxi Drivers Association Inc incorporates and represents NSW bailee drivers, lessee and owner drivers  ‐ including many operators ‐  and encompasses a wide cross section of industry experience and knowledge.   Its motto “A Fair Share of a Fair Fare” represents driver and operator interests in “A Fair Share ...” together with its concerns for the welfare of the wider taxi industry and the public in “... a Fair Fare”.  

4. It has supported and contributed extensively and brought to the annual IPART taxi fare reviews openness, frankness, knowledge and experience.  It has revealed the erroneous and distorted basis of the early IPART data and reviews.  It supported the instigation of supplementary meetings to assist the IPART processes.  Despite IPART  having  “relied heavily on an (2007) industry wide survey of costs “ (Appendix C, C), the NSW TDA Inc has continued to comment on issues, suggest new ones, criticise data deficiencies and recommend “better data”.   

  Inaccuracy of IPART data and annual reviews.

5. Over the years there have arisen concerns about the IPART processes and especially data inaccuracies and deficiencies.  Such concerns have sometimes been overtaken by the next annual fare review, but have, nevertheless, accumulated over time. 

6. Since the 2007 survey, progress by IPART in correcting the many significant major inaccuracies of the Taxi Cost Index and Taxi Model has largely stalled despite annual submissions by stakeholders such as the Taxi Driver Associations and others.  This is highly unsatisfactory and to the dismay of driver associations and stakeholders concerned with the accuracy and validity of the taxi fare reviews.  But IPART has generally refused to accept corrected data.   It has declined the often superior knowledge and experience of the Taxi Driver Associations.  It declines to correct its use of key industry definitions such as Dead running, Dead time, Downtime, Driver Gross Takings, Driver Nett Earnings, Distance rate, Flag fall, etc.  It declines to correct its fundamental, illogical and impossible Taxi Model figures of 9 Hours per shift, 19 

shifts per week and 48 weeks per year. It has declined to accept or use available other sources of “better data”, etc.  Each year it has appeared IPART might adopt “better data”, but this rarely if ever occurs.  

    Public call  for “Better Data” by IPART CEO.

7. On 12April2010 such mounting concerns were brought to a head by the public call by the IPART CEO and acting chair Mr James Cox on the important need for “better data” for IPART taxi fare reviews.  His call gained immediate support from taxi driver associations and other stakeholders. 

8.  The call for “better data” was strongly supported with examples of better data already provided and available as per the 18April2010 T Hirsch letter to IPART.  In reply IPART wrote that these matters would be addressed in its Final 2010 Report.

9. The support for ”better data” was repeated, again with examples of better data provided and available, in the 30April2010 T Hirsch submission and reinforced with the Taxi Council Ltd’s public support at the NSW Parliamentary Hearings for better information on the taxi industry !     The 2010 Appendix C  –  and attempts at clarification.

10. Appendix C of the 2010 IPART Final Report is the only outcome on “better data” ; there has been no other IPART response to requests concerning the CEO call for “better data”.    Appendix C is a bombshell .   Amazingly, Appendix C does not refer to, let alone recognize in any way, the very public and critically important call of the IPART CEO and acting Chair Mr James Cox on the importance for IPART annual taxi fare reviews of “better data”.  Nor does it explain this glaring omission.  Inevitably Appendix C appears to question the validity of Mr James Cox’s public call. Or it raises something more fundamentally disconcerting about IPART’s approach to accurate “better data” for annual taxi fare reviews.  Appendix C  is written essentially as a litany of 63 items negating the “better data” input over  several years from the Taxi Driver Associations and other stakeholders.  It conveys the inevitable impression that IPART is NOT prepared to listen to or accept “better data”, new data, correct data or corrected data.    

11. Since its publication, every attempt has been made to clarify the nature and thrust of the 2010 Appendix C and to ensure it has not been misunderstood.   An open frank meeting was held with IPART on 24Feb2011 specifically to discuss Appendix C, but without  result.   Despite every endeavour to openly and formally clarify, correct any misinterpretations,  or if necessary amend Appendix C. On 1April2011 the NSW TDA Inc eventually wrote to the IPART Tribunal requesting clarification and resolution of the Appendix C issues before the 2011 submissions deadline of 15April2011.   A reply has purportedly been made, but to date has not been sighted despite several requests. 

  12. Extraordinarily, no IPART responses whatsoever have been received.  

‐ Neither to the 18April2010 T.Hirsch letter concerning the CEO call for “better data”.     

‐ Nor to the 30April2010 T Hirsch submission concerning the CEO call for “better data”.   

‐ Nor was any reference made to the above, nor to “better data”, in the 2010 Final Report as promised by IPART in writing. 

‐ Neither was any clarification or resolution of Appendix C  achieved in the 24Feb2011 meeting with IPART.  

‐ Nor  to date has any response or clarification been received from the IPART Tribunal to the  1April2011 NSW Taxi Drivers Assoc’n Inc letter concerning Appendix C  and “better data” !   

    IPART. 

13. It is as if the very public 12April2010 call on the importance of “better data” by the IPART CEO and acting chair Mr James Cox never occurred or is to be removed from all the records!

14. One interpretation is that IPART effectively denies its CEO public call.  And that it is not concerned with “better data”.  Indeed the 2010 Appendix C largely denies “better data”. 

15.  If IPART is no longer concerned with the accuracy and validity of taxi fare reviews then it becomes meaningless and useless.  IPART then no longer performs its functions for the industry and the public, properly and faithfully.  And that places IPART in clear dereliction of the Government’s  Terms of Reference. 

16. It is doubtful that any stakeholders or the public would condone that situation.       Going forward. 

17. IPART appears to rely heavily on its industry surveys.  2011/12 is programmed by IPART to be another 5 yearly taxi industry survey.   From the 2007 experience and knowledge of the taxi industry, it is questionable that this survey will be much more effective than 2007. 

18. Critical however to the accuracy and credibility of annual fare reviews going forward, will be the associated processes and procedures that IPART recommends and adopts before and following the 2011/12 survey.  For example : ‐ A 2011/12 survey, regardless of its results, must not be followed by another 5 

year totally illogical and counterproductive embargo on any necessary,  improved and corrected information and data . 

‐ The IPART interpretations of its Terms of Reference and main operational procedures need to be published, especially in relation to “better data”.  

‐ While the scope of annual reviews might be limited for practical purposes, they should not be closed at any time to accepting “better data” critical to the basic fare reviews.

‐ The relationships with all stakeholders need to be conducted openly and publicly.  

   

19. In view of the above situation, the NSW Taxi Drivers Association Inc makes this public protest submission by declining to offer any comments on the 2011 IPART taxi fare review. 

20. Subject also to the above, the NSW Taxi Drivers Association Inc will consider its further steps this year and options for participation in future IPART reviews. 

      Anne Turner  President NSW Taxi Drivers Association Inc      Enclosed :

a. 1April2011 letter to the IPART Tribunal re 2010 Appendix C. b. Summary Material from 24Feb2011 meeting c. Appendix C  Annotated and with Comments added

MATERIAL RAISED IN IPART MEETING 24FEB2011 “APPENDIX C Issues raised that are outside the scope of the review”

1. INTRODUCTION  COMMENTS   The working relationships, trust and confidence between taxi stakeholders and IPART are important. The Appendix C Title and contents however are a disgrace. It may be endangering those relationships. Hence the request for this urgent special meeting to clarify matters. Unbelievably, Appendix C makes NOT A SINGLE mention of IPART CEO Mr James Cox highly PUBLIC call for “better data”, the very issue raised in correspondence to IPART which IPART in writing undertook to respond to in the 2010 Final Report. NOT A WORD ! Appendix C instead has all the hallmarks of an aggressively defensive report. It is evasive, repeatedly using tired highly questionable excuses to apparently deflect from addressing essential better data. It is disorganized, disjointed, hard to follow and apparently hurriedly pasted together. It is disconcertingly full of errors and misstatements. And misquotes, misrepresentations and false attributions with the effect of or designed to denigrate. Who wrote this rubbish ? On such an important issue as the IPART CEO’s call for “better data” ? 59 times IPART states in Appendix C that it cannot regulate, umpteen times that it cannot /will not amend until the next survey 5 years later (to which stakeholders have never agreed!), and numerous times other excuses, etc. IPART’s insistent repetition is conflating, confusing, distracting and totally unnecessary (if not deliberate?). No one is seriously requesting IPART to regulate. It is being asked to ‘recommend’, or to ‘recommend to regulate’. IPART surely understands that? Were IPART’s 2009 Draft IPART abolition of the Harbour Bridge Return Toll and 2010 Airport Fixed Fares not precisely similar ? And stakeholders especially request IPART to adopt “better data” ! Extraordinarily, how is it possible that a Glossary of corrected key taxi industry definitions, an expanded ‘Box 2.2’ clearly explaining the industry structure, better TCI statistics and better Taxi Model statistics could possibly be “outside the scope of the review”, as per the Appendix C Title !? Appendix C appears to be a turning away from IPART’s declared principles of openness and frankness, professionalism and facts and honesty. Is this a fork in the road for the IPART approach to objective taxi fare assessments?

Or will IPART begin to adopt “better data” as so publicly called for by its CEO ? If not, how is Appendix C to be dealt with ?

2. EXTRACT  EXAMPLES  FROM APPENDIX C  ‐  PLUS COMMENTS The following examples and the IPART references are drawn directly from the (numbered) Appendix C. Subheadings for clarity and the Comment below each example are added since to Appendix C. a. IPART Glossary App C Page 73

W. Glossary. IPART’s removal of some terms included in the 2008 glossary from the 2009 report was unprofessional and lacking in openness and transparency (T Hirsch)

IPART : Glossary. We revise the glossary every year to include only the terms used in the report so that it is as short as possible Comment : Glossary. The IPART comment seems to be evasive unprofessional bunkum. The corrected definitions take up less than half a page (and the Glossary font size can be reduced). The critical issue is correct definitions central to the TCI and taxi fare assessments! Not only as used by IPART but by all stakeholders ! Key corrections of IPART errors which it appears to be avoiding ? b. IPART BOX 2.2 App C Page 73

X. Box 2.2.  IPART provides information on industry structure that deliberately conceals the 

true power structures of industry stakeholders (T Hirsch)  

IPART : Box 2.2 . In the past we have provided a factual summary of the regulatory framework including the different parts of the industry (Box 2.2 in the 2008 final report) – this summary is included for background information and is checked by NSWTI (the industry regulator) for accuracy.

Xi. Box 2.2 IPART refuses to include the version of Box 2.2 provided by T Hirsch in its report - this shows a lack of openness and transparency and brings into question IPART’s credibility. (T Hirsch)

IPART : Box 2.2 It is not IPART’s role to speculate on power structures within the industry. It would be inappropriate for us to include one stakeholder’s views of these aspects of the industry or of other stakeholder groups, and present them as factual information. Comment : Box 2.2  The IPART statements are false and misleading.   The IPART “quote” at X is questioned because it does not appear to be in either the 13April2010 better data letter, nor in the 30April2010 Submission of Ted Hirsch. And Xi is misleading because the new Box 2.2 was provided by the NSW TDA in 2009 to improve the trite uninformative IPART Box 2.2.   And IPART contradicts its own comments. No stakeholder suggested that IPART “speculate on power structures”.  And further misleads because the new Box 2.2 was volunteered for the purposes of “the nature and structure of the taxi industry”, “relationships that are important public knowledge”.   Again misleading is that the new Box 2.2 is the view of one stakeholder.  It was submitted by the NSW TDA and is the product of numerous very informed participants.  Plus it was recommended that 

any new Box 2.2 should be vetted by all stakeholders. And IPART states that TNSW can also check for accuracy !   IPART is correct in that a “factual summary of the regulatory framework including the different parts of the industry” is essential to IPART, stakeholders and the public.  But IPART evades this.   The expanded Box 2.2 provides openness of information as recommended by the NSW Parliamentary Inquiry and as the “Taxi Council agreed in the Parliamentary Inquiry with openness of information for better public understanding, especially in relation to the structure of the industry” (30Apr2010). 

Evidently all major stakeholders support improved factual information ! But not IPART !? What is IPART hiding from the public and the taxi industry ? 

c. PWC SURVEY App C page 68 C. PwC Survey.

IPART : PwC Survey. In some cases, this led us to use a figure different from that suggested by the PwC survey. In many other cases, we felt that the PwC survey was the most reliable information. We do not accept the view that we have selectively used PwC survey data nor that the PwC survey results can or should be ignored. Comment : PwC Survey. This IPART statement is completely contradictory and fully proves the 

stakeholders’ case !  IPART has in fact SELECTIVELY rejected some, and accepted other PwC survey results.  Given good rational grounds that is perfectly proper. However IPART rejects for 5 years any further glaring PwC deficiencies that have been revealed by others since ! 

d. BETTER DATABASE. App C page 70

J. Better database. Evidence is available from all taxi networks which log in every taxi for every hour and every shift worked – IPART could readily collect this information to adjust the TCI assumptions (T Hirsch) Ji. Better database. This information is available from networks or from NSWTI’s new taxi industry database – it is unbelievable that IPART does not have access to it (T Hirsch)

IPART : Better database. We are currently investigating what data we will be able to obtain voluntarily. However, it is important to remember that any data obtained from networks would relate to booked trips only and would not be applicable to all taxi trips in NSW. Comment : Better database.  This statement demonstrates IPART ignorance about the taxi industry.   ALL taxis must legally sign in and out thus recording the taxi, driver, start and end of shift and hence number of hours per shift, shifts per week and weeks per year of ALL taxis in all radio networks. Perhaps IPART should engage in discussions to gain knowledge rather than ignorantly going into print.   

e. TAXI DATA App C page 68

A. Hours. Assumptions regarding hours of operation are understated NSWTDA).  

Ai. Trips per taxi. Number of paid trips per taxi has not been sourced (ATDA) Aii. Drivers per taxi. Assumptions regarding number of drivers per taxi and number of taxis per operator are flawed (ATDA)

IPART : Hours. The 2007 PricewaterhouseCoopers (PwC) survey asked drivers to report shift information and used the median survey result (9 hours per shift) in making its recommendations - in 2008, we accepted the survey result on this issue as the best and most reliable estimate available.

Comment : Hours. This information (as with other PwC survey info selectively adopted by IPART) has since been extensively discredited and demonstrated both as logically and economically impossible !            However IPART continues to refuse to address or acknowledge these submissions (and claiming a 5 year bar on urgently necessary corrections is NOT addressing such ”better data” as publicly called for by IPART CEO Mr James Cox).    

IPART : Drivers per taxi. Assumptions on number of drivers per taxi and number of taxis per operator also come from the PwC survey. Comment : Drivers per taxi. as per [t2] 2 drivers per taxi is both logically, regulatorily and economically impossible (!) to fill the maximum 14 shifts of 12 hours each. And grossly distorts and invalidates the IPART Taxi Model and TCI.

Independent Pricing and Regulatory Tribunal 2010 Review of Taxi Fares in NSW

Annual review of fares and consideration of flat fares

between Sydney Airport and Sydney CBD

Transport — Final Report and Recommendations 4 June 2010

The Tribunal members for this review are: Mr James Cox, Acting Chairman and Chief Executive Officer Ms Sibylle Krieger, Part Time Member Inquiries regarding this document should be directed to a staff member: Dion Jackomas (02) 9290 8442 Fiona Towers (02) 9290 8420 page 68

APPENDIX C Issues raised that are outside the scope of the review Preliminary Comment on Appendix C. IPART CEO call for “Better data” Appendix C had its origin in the public call at the public hearing on 12 April 2010 by the IPART CEO and acting Chair Mr James Cox on the importance for IPART annual taxi fare reviews for “better data”. That call was strongly supported by stakeholders with examples of better data as provided and available as in the 31March2010 T.Hirsch letter to IPART. In reply IPART wrote that these matters would be addressed in its Final 2010 Report. The call for ”better data” was again supported, with further examples of better data provided and available, in the formal submission of 30April2010 T Hirsch and evidenced with the Taxi Council Ltd’s public support at the NSW Parliamentary Hearings for better information on the taxi industry ! Appendix C is the purported result. However, nowhere else is there a single reference anywhere to “better data”. And extraordinarily, nor does Appendix C recognise, let alone refer to, the very public and critically important call of the IPART CEO and acting Chair Mr James Cox on the importance for IPART annual taxi fare reviews for “better data”. Nor does it explain this critical and evident omission.

This inevitably questions the validity of Mr James Cox’s public call, although such doubt would be most strongly rejected by the taxi driver stakeholders and other major stakeholders. Or it raises something more fundamentally disconcerting in IPART’s approach to accurate “better data” for annual taxi fare reviews. Which does not appear to be consistent with the IPART Terms of Reference. Appendix C Title. Appendix C is controversially titled “Issues raised that are outside the scope of the review”. A title controversial in disregarding completely the public call of its CEO Mr James Cox for “better data”. And dismissive in apparently sweeping aside the concerns and attempts by major stakeholders to correct and improve IPART’s information deficiencies and errors by providing corrective information and sources for that “better data” that the IPART CEO called for publicly ! A more positive title for Appendix C may be “The Importance of Better Data”. That would provide the recognition and respect due for the IPART CEO‘s important public call. And hopefully encourage a more positive, objective and professional approach in IPART’s comments. Not to mention the recognition and respect for the stakeholders which for years have the deficiencies of the IPART information and in good faith provided corrective information and sources for the “better data” that the IPART CEO importantly called for publicly ! The Appendix C approach. The approach and intent of Appendix C is puzzling. It is disturbing and negative. The 2010 Appendix C published by IPART is a confusing, scattered, disorganized and evidently hastily drafted, almost incomprehensible, grab bag of issues. It is, unusually, quite unprofessional. Each issue commences with what are apparently “quotations”, some of questionable accuracy, some false, some pasted together from several sources, but none verifiable as, highly unprofessionally, they are unreferenced ! And controversial because many of the quotations cited are directly related or relevant to “better data”. Added to the quotes are comments by IPART, often dismissive, frequently questionable and contentious. Extraordinarily, the impression of Appendix C is that it appears to be designed to dispel and dismiss calls or recommendations for “better data”. In direct contradiction to the CEO public call for “better data” ! In the process it is dismissive, and appears to denigrate and disparage, by appearing at times to cast aspersions on the submissions by stakeholders for “better data”. And most disconcerting, in this process it appears to have lost sight of, or have no regard or concern for the sound and cooperative IPART /stakeholder working relationships built up over the years. “Better data”examples. The extent of the dismissiveness of Appendix C for “better data” is highlighted by the two simple examples brought specifically to attention since the CEO’s important public call for “better data”; the Glossary of key definitions and Box 2.2 setting out key taxi industry relationships. The reason for these two examples is that both greatly improve IPART’s “better data” while neither in any way affects the TCI or Taxi Model statistics. However under the most unprofessional of excuses Appendix C rejects any need for correct key

industry definitions as provided by stakeholders in the amended Glossary. That IPART used these key definitions incorrectly in 2008, or that it may have suffered embarrassment as a result, does not in any way excuse its rejection of the correct key Glossary industry definitions. And the extended Box 2.2, provided voluntarily by the NSW TDA at significant sacrifice, is also rejected for quite unprofessional and spurious reasons - and despite also the Taxi Council Ltd’s public support at the NSW Parliamentary Hearings for better public information on the taxi industry ! Two different Appendix C examples are the repeated refrains by IPART that it does not “regulate” and that IPART does not propose to correct data for 5 years after the 2007 PwC survey. The extreme unnecessary repetition appears to be to deflect attention from the need for and availability of “better data”, as publicly called for by the IPART CEO Mr James Cox ;  1.That IPART does not “regulate”. 

- This refrain, while valid, however is made not once or twice, but extraordinarily repeated 59 times or more ! Often as an excuse, unnecessarily, 59 times in this Appendix C. That is 59 times ! ‐  It is irrelevant because none of the 63 issues quoted in Appendix C, except perhaps one, made the claim that IPART should “regulate” anything.   ‐  The issues raised generally request that IPART should make recommendations on certain matters, particularly those critical to IPART’s routine annual fare review work (as well as matters affecting fares in other ways as noted below).  Recommendations that IPART itself concedes it can and does make, as at Z below !  ‐  IPART has largely avoided responding to those real issues by using the generally irrelevant and distracting excuse of not “regulating” those issues.  And in so doing, deflecting attention from the need for and availability of “better data”, as publicly called for by the IPART CEO Mr James Cox. 

This preliminary observation is made to avoid, in the Comments added below to Appendix C, repeating it 59 times at each of the IPART 59 refrains of non regulation.

   2. That IPART uses the PwC survey info and does not propose to correct data for 5 years after 2007 namely 2011‐12. 

‐  This excuse is also used repeatedly, including that it was announced in 2008, with the (untrue)     inference that participants agreed to a 5 yearly reviews program. ‐  The reasons for IPART’s insistence on this arbitrary 5 year program have never been divulged     (despite its operational policy of openness and transparency). 

        ‐  In effect IPART has without validity or stakeholders agreement placed a 5 year time bar on any            data corrections, nor any “better data” critical to fare reviews !         ‐  While IPART has selectively adopted and rejected aspects of the PwC survey – as it has            acknowledged, it apparently refuses, bars and declines to consider critical correction and “better            data” recommended by far more knowledgeable and experienced industry stakeholders.  

- MOST IMPORTANTLY, it is illogical and derelict of its duties for IPART to ignore critical data deficiencies for 5 years, especially when sound “better data” is available. - And arguably directly contrary to IPART’s Terms of Reference ! This preliminary observation is also made to avoid, in the Comments added below to Appendix C, repeating it innumerable times at each of the IPART refrains. Appendix C - Comments added.

The full text of Appendix C is reproduced below as per the 2010 IPART Final Report. It has been numbered A, Ai, Aii, B, Bi, -Z, AAi, AAii, etc together with Issues headings to provide some clarity and ease of reference that is absent from the original Appendix C. The Appendix C statements by IPART have been labelled as ‘Ipart :’ to distinguish them from those added subsequently to Appendix C and labelled as ‘Comments :’ Unlike the IPART unreferenced quotations and attributions, the Comments – where added - are related directly under each Appendix C Issue for immediate cross identification. The Comments, in critically questioning many IPART statements, avoid the excessive repetition and provocation of Appendix C and strive to continue stakeholder professionalism, politeness and objectivity. Where added, the Comments are primarily concerned with the issues raised by the critically important call of IPART CEO and acting Chair, Mr James Cox, for “better data” for IPART taxi fare reviews. APPENDIX C TEXT – WITH COMMENTS ADDED.

A. Hours. Assumptions regarding hours of operation are understated (NSWTDA).  

IPART : Hours. There is a broad range of estimates available for these items and for most items we considered the whole range of estimates in our 2008 review. The 2007 PricewaterhouseCoopers (PwC) survey asked drivers to report shift information and used the median survey result (9 hours per shift) in making its recommendations - in 2008, we accepted the survey result on this issue as the best and most reliable estimate available. Comment : Hours. This information (as with other PwC survey info selectively adopted or discarded by IPART) has since been extensively discredited and demonstrated to be logically, rationally and economically impossible ! However IPART continues to refuse to acknowledge, let alone address, either the rational logic or the economics of these submissions (and claiming a 5 year bar on urgently necessary corrections is NOT addressing such urgent ”better data” as publicly called for by IPART CEO Mr James Cox).

Ai. Trips per taxi. Number of paid trips per taxi has not been sourced (ATDA) IPART : Trips per taxi. In 2008, we considered a range of estimates from all available sources and decided that 19 paid trips per shift was a reasonable estimate to use, it is not based on a single data source – but we note that this value is consistent with ATDA’s 2008 submission.

Aii. Drivers per taxi. Assumptions regarding number of drivers per taxi and number of taxis per operator are flawed (ATDA)

IPART : Drivers per taxi. Assumptions on number of drivers per taxi and number of taxis per operator also come from the PwC survey. Comment : Drivers per taxi. 2 drivers per taxi is logically, logistically, regulatorily and economically impossible (!) to fill the maximum 14 shifts of 12 hours each. And grossly distorts and invalidates the IPART Taxi Model and TCI.

This is common knowledge to everyone including IPART, which seemingly clings to the (partially) discredited PwC survey and persistently refuses to acknowledge these industry facts. This IPART approach is surely contrary to its Terms of Reference.

B. TCI Correction. IPART’s refusal to undertake a full review of the TCI every year is not 

consistent with its terms of reference (T Hirsch)  

Comment : TCI Correction. This appears to be a MISQUOTE which IPART should reference accurately to be credible. The criticism made, warranted and made frequently by many stakeholders, is not that a “full review of the TCI” is not made each year, but that IPART avoids any corrections whatsoever of the TCI when such are clearly demonstrated to be overdue and necessary. This appears neither responsible, nor consistent with the IPART annual Terms of Reference. IPART : TCI Correction. We indicated in our 2008 draft and final reports that the aim of the 2008 review was to establish a TCI that could be indexed each year without significant annual revision. We clearly indicated during and at the conclusion of this process that the TCI we established would be used for the next 4 years (for example, see 2008 Review of Taxi Fares in NSW — Final Report and Recommendations, June 2008, p 10). We choose this approach because in our view it is the most appropriate means of fulfilling our statutory duties. In making our recommendations we consider all the factors required by our terms of reference for the review. Comment : TCI Correction. It is ludicrous that annual taxi fare reviews can be claimed to be conducted by IPART when the accuracy of much of the review basis is known and demonstrated to be wildly at variance with industry reality. Many Comments in this Appendix ( and many preceding stakeholder submissions) have brought these glaring errors in the IPART review basis to notice. Not correcting critical data deficiencies for fare reviews would appear to be NOT fulfilling IPART “statutory duties” nor respecting the IPART’s Government Terms of Reference.

C. PwC Survey. IPART cannot rely on the PwC survey for any aspect of the TCI because it has 

selectively questioned some of the results, which throws the whole survey into doubt (T 

Hirsch)  

Comment : PwC Survey. This also is a careless MISQUOTE. The call has not been against “any aspect”, but such PwC results as are manifestly incorrect – such as IPART itself has chosen selectively to ignore or correct ! IPART : PwC Survey. In recent years we have undertaken a comprehensive review of the costs, cost weightings and inflators in the TCI. In deciding on the current TCI weightings, we relied heavily on an industry wide survey of costs undertaken by PwC, which was sent to every operator and driver in NSW and provided an unprecedented amount of cost and operational information on which to base the TCI. In coming to our decision on the costs and weightings in the TCI we considered all submissions and information available. In some cases, this led us to use a figure different from that suggested by the PwC survey. In many other cases, we felt that the PwC survey was the most reliable information. We do not accept the view that we have selectively used PwC survey data nor that the PwC survey results can or should be ignored.

 Comment : PwC Survey. This IPART statement is completely contradictory and fully proves the often stated stakeholders’ case !  IPART admits (again) that it has in fact SELECTIVELY rejected some, and accepted other PwC survey results  ‐ which, given sound objective grounds is perfectly proper and necessary. However, while IPART itself has demonstrated the partial inadequacies of the PwC survey, it rejects for 5 years correction of any further glaring PwC deficiencies that have been revealed by others since !   How can this be ?  

page 69

D. Driver Earnings/Hour. Notional driver wage should be higher (ATDA, NSWTDA).  

Di. Driver Earnings/Hour. IPART has ignored PwC recommendations and ignored other stakeholder comments on this issue and used an obscure rate from the Taxi Council (T Hirsch) Dii. Taxi vs Bus driving. IPART has failed to adequately explain why the skills of taxi drivers are worth less than the skills of bus drivers (T Hirsch) Diii. Driver Earnings/Hour. The use of the IRC figure brings into question IPART’s independence (T Hirsch)

IPART : We do not determine driver earnings – drivers do not receive a ‘wage’ for driving a taxi. In order to cover all of the costs of providing taxi services, fares should include a reasonable estimate of the cost of drivers’ time. To do this, we include a notional hourly wage in the TCI. In 2008, we decided that a notional hourly wage of $16.95 should be included (for the base year 2007). This was determined with reference to the hourly pay for driver entitlements specified in the 2007 taxi contract determination and other information, including submission comments. IPART and the IRC are independent bodies with different roles and objectives. We have taken into account the terms of the current IRC Contract Determination as it is a relevant piece of information for the review. In coming to our decision we considered all available information, including the PwC recommendations and the views put forward in submissions. We note that the TCI includes a notional hourly wage rate of $17.54 (2008) for taxi drivers – this is above the wage rate included for taxi drivers under the IRC’s new modern award. Comment : Driver Earnings/Hour. The truth of the IPART statement that “we considered all available information” is challenged.  (Refer also the list of issues Not Considered by IPART at issue P below.) 

Nowhere, for example, has IPART ever acknowledged, let alone made any specific comments on the Taxi versus Bus driver skills submission as per issue Dii above.  IPART is challenged to reference precisely where it claims to have done so.   Nor has IPART ever publicly examined the nature, origin and relevance of the IRC “wage” figure for Downtime (which itself is only PART of the IRC Downtime compensation formula !).  And for IPART to repeatedly argue that it does not “determine”, when it uncritically “determined” (as stated by IPART above), unexamined wage figures for inclusion in the TCI as it’s professed “reasonable estimate of the cost of drivers’ time” and thereby recommending (and “determining”) 

driver earnings, is to flagrantly contradict itself.  To the detriment of the validity, accuracy and credibility of the TCI and taxi fare reviews and in contradiction to its Terms of Reference ! 

E. Super. Superannuation should be included as a driver labour cost (ATDA, T Hirsch, T Denton) 

Ei. Super. IPART should direct the IRC to include superannuation in the contract determination or otherwise ensure that drivers receive it (T Hirsch, T Denton).

Comment : Super. It is believed that the attribution to T Hirsch in E is incorrect and in Ei incorrect and false. It is contrary to the 31/3/2010 TH letter and to the specific letter concerning superannuation since. IPART should professionally identify the quote source and correct or retract it. IPART : Super. Superannuation and leave entitlements for drivers are not determined by IPART – for some drivers they are determined by the IRC but for others they may be self-funded. In 2008, IPART included notional values for these items in the TCI in addition to a notional wage based on a percentage of the notional wage: � 9% for super � 15% for leave entitlements. IPART cannot direct the IRC or any other body to impose any obligation on operators to pay superannuation but we have clearly stated that we believe that no one off adjustment to fares is required to fund a superannuation entitlement.

F. LPG. Fuel consumption has not been adequately considered – the km per litre rate assumed 

by IPART is too low and reflects a ‘highway’ rate (ATDA).  

IPART : LPG. The 2007 PwC survey asked both drivers and operators for their actual rate of fuel consumption (km per litre) and PwC’s recommendations were based on the median fuel consumption reported in the survey. In 2008, we accepted PwC’s recommendation on fuel consumption as the best available measure.

G. TCI costs inaccurate. TCI needs to be rebalanced to increase driver costs and reduce 

operator costs – the TCI has an anti‐driver bias (ATDA, NSWTDA, T Hirsch).  

Comment : TCI costs inaccurate. This attribution to T Hirsch is FALSE and defamatory. IPART must identify the source of quote or retract it and apologise. IPART : TCI costs inaccurate. The current costs and weightings in the TCI are largely based on the results of the 2007 PwC survey in which: � all drivers and operators in NSW were asked to participate � 83% of survey responses were from drivers. ATDA and NSWTDA were consulted in developing the survey. Comment : TCI costs inaccurate. The reference to the PwC survey by IPART is irrelevant and obfuscatory.  It evades the issue of inaccurate TCI costs as quoted.  

The unreliability of parts of the PwC is universally admitted ALL major stakeholders AND by IPART ! IPART’s statement of 83% of survey responses being from drivers is deliberately highly misleading.   

‐ The fact is that only 6.5% of Sydney’s drivers responded to the survey !  Some of whom obviously misunderstood questions resulting in some clearly wrong results (as acknowledged and selectively disregarded or changed by IPART). 

‐ Given linguistic and comprehension survey response problems, the statistical reliability of much of the PwC survey could well be in question. 

That the ATDA and NSWTDA were consulted in refining the survey is diversionary irrelevance by IPART.  The 

survey may have been much worse but for the voluntary inputs from the NSW TDA, ATDA as well as TC Ltd  and other knowledgeable stakeholders.  But the responsibility for the survey and the quality of its outcomes rests strictly and only with that of the paid professionals. The questionable quality of some survey results are entirely the responsibility of PwC /TNSW / IPART, not others.  Meanwhile IPART continues to evade the issue of inaccurate TCI costs as quoted ! 

page 70

H. TCI costs inaccurate. IPART ignores the fact that pay‐ins in the market are below the IRC 

maximum  (T Hirsch). 

Hi. TCI costs inaccurate. Current market pay-ins to operators are lower than operator costs in the TCI suggesting that operator costs are too high (T Hirsch). Hii. TCI costs inaccurate. Operators cannot make enough through their pay-ins to cover their costs and must supplement their income from other sources (NSWTDA, ATDA)

Comment : TCI costs inaccurate. In “quoting” Hii following Hi, IPART should accurately refer to those quotes and their context. Neither the NSW TDA nor the ATDA make the claim as (mis)represented by IPART. That current market pay-ins are lower than the IPART TCI costs (even after allowing for “entitlements”) is an indisputable fact which is critical to the validity and credibility of the TCI. The sentiment that operators do not earn enough may be a valid but totally separate consideration.

Hiii. TCI costs inaccurate. IPART leaves out the cost of bailment as a driver cost and an operator source of revenue – this is reprehensible (ATDA)

IPART : TCI costs inaccurate. The 2007 PwC survey reported that pay-ins are often reduced in return for drivers foregoing their leave entitlements. Comment : TCI costs inaccurate. This IPART statement is incorrect and false !  It is an unfounded PwC and IPART canard, asserted often in its reports, which is misleading and severely distorts the truth of the deliberate industry wide evasion of legally payable entitlements :   ‐  Drivers are neither offered any choice of Methods 1 or 2 payins, as required by the IRC, nor ABLE to exercise any choice, let alone to forego entitlements (and the PwC did not survey any of these particulars). Notably, the 2010 Qld Ombudsman Report refers to such practices as “coercion”.    ‐ It ignores that the TIA /TC Ltd lied for years to the Industrial Relations Court concerning the non‐payment (evasion) of entitlements as per the Transcripts repeatedly provided to IPART (and which IPART has steadfastly declined to acknowledge let alone comment on).   ‐  Together with the IPART repeated, totally unfounded, unproven assertion that most or many drivers prefer a fixed payin, when in fact drivers are not offered any choice of payin method in Sydney and many drivers are unaware of the existence, let alone availability of Method 1.   ‐  The Queensland Ombudsman’s 2010 Report describing such practice as coercion of drivers is salutary and IPART should correct its highly misleading statements.  

IPART : TCI costs inaccurate. In 2008, we considered both maximum and market pay-ins but noted that it may not be reasonable to cross check the market pay-in with operator costs because: � Pay-ins change over time depending on the supply and demand for drivers. Comment : TCI costs inaccurate. Another unfounded and unproven IPART assertion which is not backed by recognized industry experience. Payins rarely if ever go down. But Payins go up routinely in July after the annual IPART fares Review and recommended changes, the IRC payins increase determination, and the TC Ltd advice to operators (which then until 2009 also used to be routinely followed by Plate Lease increases). More fundamentally, the pay-ins are the operators’ main (and virtually only) source of revenue. By definition the market pay-ins must cover all operators costs ! (Unless operators are going to the wall like flies which would be known throughout the industry, and of which IPART would be immediately apprised. And as is not occurring.) So why does IPART continue to avoid this source of readily available hard data contrary to the public call for “better data” of its CEO Mr James Cox ?! IPART : TCI costs inaccurate. � Where pay-ins are traded for entitlements, operator costs should be reduced accordingly so costs are not double counted. NSWTDA and ATDA comments on operator viability suggest that the market pay-in is not a good proxy for operator costs and as a result, no reliable conclusions can be reached from comparing these 2 figures. Comment : TCI costs inaccurate. The IPART arithmetic above is not disputed that “Where pay-ins are traded for entitlements, operator costs should be reduced accordingly so costs are not double counted.” But this misunderstands (at best), despite detailed submissions, that even AFTER allowing for so called “traded entitlements”, the level of the market pay-ins is still well below the TCI costs assumed by IPART. (And furthermore the IPART TCI operator costs that are clearly excessive, as evident from the “better” hard data reality of market payins, are not the product of PwC survey information.)    

Given the criticality of TCI costs, IPART should have made such calculations long ago, dismissed the need for superfluous statements such as the above, and focussed on the market pay-ins “better” hard data. IPART : TCI costs inaccurate. It is necessary for the TCI to be based on the underlying cost structure of the industry. It would not be appropriate to include the cost of bailment (either IRC maximum or market pay-ins) as representative of operator costs. The bailment arrangements are a means of distributing taxi revenue between drivers and operators and are not relevant to the TCI calculation. Comment : TCI costs inaccurate. (This statement by IPART may not be fully understood. Conversely, IPART may not have understood the nature of stakeholders recommendations re pay-ins data.) It is not suggested that average market pay-ins should be a substitute for TCI underlying industry costs. But rather that the readily available hard data of market pay-ins is a critical reality check on the costs assumed by IPART in the TCI. And that it is evident from the market pay-ins hard data that the TCI operator costs assumed by IPART are clearly and significantly wrong and too high.

It is quite erroneous and irresponsible in this regard to try to simply dismiss the “better data” of market pay-ins as a “bailment arrangement”.

I. Better database. IPART has an inadequate database of industry information (T Hirsch) 

Ii. Better database. IPART should consider relying on information from ‘knowledgeable and experienced’ stakeholders in the meantime and abandon selective reliance on the PwC survey (T Hirsch) Iii. Better database. There is no official measure of taxi trips/demand for taxis (ATDA)

IPART : We are keen to obtain more information on costs and revenue within the industry. This is particularly important for areas in which the PwC survey delivered less reliable results (for example, the level of fare revenue indicated by the PwC survey was significantly below that put to us by other stakeholders). We need comprehensive, verifiable and independent data for our fare reviews. It is not appropriate for us to rely on the assertions of any particular stakeholder, as this information may not be applicable to the broader NSW taxi industry. Comment : Better database. It is refreshing to read this statement. Albeit buried deep in Appendix C. But IPART should be keen to obtain information on much more than “costs and revenues” within the taxi industry, because there are many other areas of the taxi fare reviews basis which are fundamentally flawed and deficient. As recommended repeatedly at length by many stakeholders as directly “applicable to the broader NSW taxi industry”. It is also refreshing to read IPART’s reference to “areas in which the PwC survey delivered less reliable results”, as stakeholders have also repeatedly pointed out, notwithstanding IPART continuing to refuse to take corrective action on, despite the IPART CEO’s critically important public call for “better data”.

J. Better database. Evidence is available from all taxi networks which log in every taxi for every 

hour and every shift worked – IPART could readily collect this information to adjust the TCI 

assumptions (T Hirsch) 

Ji. Better database. This information is available from networks or from NSWTI’s new taxi industry database – it is unbelievable that IPART does not have access to it (T Hirsch)

IPART : Better database. IPART has no statutory information gathering powers in relation to taxis – we cannot force any organisation to provide us with data for our review. Comment : Better database. Refer to T&I /TNSW letter 26June2010. IPART : Better database. We are currently investigating what data we will be able to obtain voluntarily. However, it is important to remember that any data obtained from networks would relate to booked trips only and would not be applicable to all taxi trips in NSW. Comment : Better database.  The statement that “data obtained from networks would relate to booked 

trips only” demonstrates IPART’s very serious lack of knowledge about the taxi industry.  To the detriment of informed annual fare reviews and at the expense of the taxi industry and the public !   ALL taxis must legally sign in and out each shift, thus recording the taxi, driver, start and end of shift and hence number of hours per shift, shifts per week and weeks per year of ALL taxis in ALL radio networks. Perhaps IPART should engage in stakeholder discussions to gain industry knowledge rather than going into print and dismissing available hard data contrary to their CEO important public call for “better data”.   

IPART must urgently correct its lack of knowledge and tap into the available “better data” of the industry to fulfill its statutory responsibilities and Terms of Reference.  

IPART : There is no organisation that actively collects meter data (although we understand that some data is collected on a voluntary basis), which would be the most comprehensive source of information and would relate to all taxi trips. As part of the restructure of Government agencies there will be a new body set up called the Bureau of Transport Statistics. However, NSWTI has advised that the specific role of this body in relation to taxis has not been determined. No information is available on the expected timing of the new body or exactly what data might be available. page 71

K. TCI costs inaccurate. Converting the index to percentages and not including the dollar values 

is statistically unsound (ATDA)   

IPART : TCI costs inaccurate. Only the weightings (%) and inflators (%) are required for the index calculation and for calculating the increase in costs faced by drivers and operators. Dollar values are only necessary to calculate the weightings following a comprehensive reweighting exercise. Nevertheless, we accept that there is interest in the dollar values that underlie our calculations.  As such, we have included the dollar values that are used to develop the weightings that will be used as the starting point for next year’s review (Appendix E).   

Comment : TCI costs inaccurate.  It is submitted there is no true “weighting” of the relative importance of the TCI costs.  The TCI dollar costs are simply expressed as TCI percentages of the total.   The dollar costs are then only changed by the inflators.  Either the dollar values or the % values of those dollar costs can be used interchangeably for inflator purposes.  In the absence of proper weighting, it is more direct, much clearer and simpler to use the actual dollar costs.  As recommended in L below  in IPART simplifying – and not unnecessarily complicating – its reports.  

L. IPART reports.  IPART reports are too long and technical and should be substantially 

improved immediately (T Hirsch)  

IPART : IPART reports. We always try to present the information in our reports in a simple and readable format. However, we have to include enough information in our reports for stakeholders to see what we have done. Comment : IPART reports. This reply is not questioned. However why does it ignore the substantive stakeholder suggestions for improved IPART reports that are simplified, less repetitive, shorter, with details in more appendices such as IPART does with the (erroneous) KPI details, etc ?

M. TCI costs inaccurate. There is no profit margin included for the operator – it is hidden in 

operator salary equivalent (ATDA)   

IPART : We considered this issue in its 2008 review. We are of the view that this can only be explored as part of a comprehensive review and we intend to look at this issue further as part of the next

reweighting process.

N. Driver Earnings/Hour. Drivers wages should increase in line with the cost of living (NSWTDA)  

IPART : The drivers’ wages item in the TCI is inflated using WPI, which measures the general rise in wages in the economy (ensuring that the notional wage keeps pace with wage growth in alternative jobs). Typically the WPI is above the rise in the cost of living measured by CPI, and this has been the case since 2008.

O. TCI costs inaccurate. Driver entitlements in the contract determination are included in the 

TCI but not paid by operators – they should be removed  from operator costs so that the TCI 

reflects reality  (T Hirsch)   

IPART : TCI costs inaccurate. IPART has no role in enforcing the contract determination. The 2007 PwC survey attempted to capture entitlements actually provided to drivers but had difficulty with this due to trading off of entitlements for reduced pay-ins. In 2008, we decided that entitlements should be included in the TCI for all drivers at a rate of 15% of notional wages – irrespective of whether operators pay drivers these entitlements or not. It is important that fares are sufficient to cover a reasonable level of earnings for all taxi drivers irrespective of their industrial/employment status. In order to ensure that this is the case, a “notional” rate of pay and entitlements based on a reasonable rate of earnings must be included for all hours for which a typical taxi is driven. A portion of entitlements are included as an operator cost because operators are legally obliged to pay these entitlements to drivers under the IRC Contract Determination – it is not IPART’s role to enforce the Contract Determination. Comment : TCI costs inaccurate. As IPART has omitted to reference the “quotes” it has used, it is not possible to check the accuracy of the quote at O above, which appears questionable. Also, in its comments, IPART again repeats the misinformation concerning “trading off entitlements” it deployed before (refer sections H above - Ipart and Comments). The thrust of the Comments concerning market pay-ins, entitlements and “better data” have already been conveyed above and should not need repeating (refer sections H above - Ipart and Comments). (It is puzzling that this section O –as elsewhere in Appendix C - should confusingly spring up in isolation from other related sections at H etc.) page 72

P. Submissions ignored. IPART has deliberately disregarded major submissions (T Hirsch)   

IPART : We believe that we have considered all issues raised by stakeholders and that this is well documented in our reports. However, we accept that we have not always agreed with the position put forward by stakeholders. Comment : Submissions ignored. The IPART comment is HIGHLY MISLEADING. And it is unprofessional to hide behind “believing” that IPART has “considered” as distinct from  “addressed” or  “discussed” in its reports issues raised by stakeholders.  

IPART has, among other issues, for example : ‐ NEVER ADDRESSED/DISCUSSED the accuracy of the Glossary of key Definitions submitted.  ‐ Nor the accuracy of the expanded Box 2.2 industry structure information. ‐ NOR HAS IT EVER ADDRESSED/DISCUSSED the specifics of the NSW TDA submissions on the 

skills of taxi versus bus drivers in relation to appropriate “wage” rates. ‐  Nor the IRC Transcript findings that the TC Ltd/TIA continued to lie for years about payment of 

driver entitlements.  ‐ NOR HAS IT EVER  ADDRESSED/DISCUSSED the 2 years of actual market payins (versus inflated 

IPART TCI costs data) submitted for 2 years by the NSWTDA. ‐ Nor has it explained why it does not agree with this market payins data (except for the first 

time above, if  inadequately and unconvincingly.) IPART  appears to imply such submissions are about stakeholder partisanship.  If so, it fails to grasp they are first and foremost about the ACCURACY and RELIABILITY of taxi industry DATA as implored by IPART’s CEO Mr James Cox call for “better data” ! 

Q. Driver Earnings/Hour. Fares should include compensation for fleet dilution – ie. 

compensation through fares should be equal to % rise in number of taxis on the road 

(NSWTDA)  

IPART : Driver Earnings/Hour. 100 new licences are being slowly released in the first half of 2010, 167 additional new licences will be issued in 2010/11. In our view, the relationship between earnings and the number of taxis is not straightforward to predict. Higher fleet numbers would not necessarily reduce earnings per taxi. For example: � If new fleet is in response to unfilled demand or creates new demand then earnings per vehicle may be maintained or improved. � If there is an excess of licences then lease fees (and hence costs of supply) may reduce, maintaining net earnings. � If there is a shortage of drivers market pay-ins may adjust to maintain driver supply, which would maintain net earnings for drivers (impact on operators depends on lease costs). This issue will need to be considered as part of the next major review –at which time IPART will consider whether changes to the TCI costs and/or fares are required. Comment : Driver Earnings/Hour. Each of the IPART statements about numbers of taxis and earnings are suppositions. And highly controversial and without a single shred of evidence. They reflect economic rationalist theories rather than the hard data of available TNSW statistical evidence relating to taxi fleet utilizations.

R. Networks.  IPART should regulate network fees (NSWTDA) 

Ri. Networks. Networks should be held accountable for their fees and what they cover (ATDA)

IPART : Networks. IPART cannot choose to regulate network fees – we have no general mandate to regulate where we see fit. We would require a terms of reference from the NSW Government or a change in legislation in order to regulate network fees. We asked every network that provided information to us for permission to publish their fees in our final report but the vast majority of networks refused on the grounds that their fees are confidential.

Comment : Networks. It is sad to read such reasons provided when it is public knowledge in the taxi industry what the Network fees are ; every 4 weeks, 13 times per year. Including the compulsory fees levied on operators for Network memberships of TC Ltd ! Perhaps the next survey results will “permit” IPART to utilize and publish such widely recognized available public information.

S. TCI costs inaccurate. IPART has deliberately allowed TCI costs to be distorted and inflated  (T 

Hirsch)  

IPART : TCI costs inaccurate. IPART’s decision on costs in the TCI are largely based on the 2007 PwC survey of costs in the industry, supplemented by evidence from stakeholders – we believe this is the most reliable information currently available. We are aware that some costs within the TCI are unregulated and we have previously expressed concerns regarding their efficiency – however, we need to set fares at a level that covers costs that are outside the control of drivers and operators because if we did not, drivers and operators would not be able to continue to provide taxi services. Comment : TCI costs inaccurate. The comments already made at H to Hiii above apply again. page 73

T. Plate lease costs.  IPART has not addressed the huge ‘on‐costs’ in taxi leases and as a result 

has allowed costs to be above market levels eg. plate lease costs  (T Hirsch)  

IPART : Plate lease costs. We try to ensure that fares are sufficient to allow drivers and operators to recover their costs. Where they do not have control over these costs (for example, plate lease costs), including a lower value for these costs in fares would simply result in lower earnings for drivers and operators We are aware of recent changes to the licensing framework. We agree in principle that any reductions in lease costs that ensue from these changes should be passed through to passengers in lower fares.

U. Cabcharge. IPART’s refusal to look at electronic payment surcharge is in disregard of its Terms 

of Reference (T Hirsch)  

IPART : Cabcharge. IPART cannot choose to regulate the surcharge for electronic payments – we have no general mandate to regulate where we see fit and this charge is outside the scope of our Terms of Reference. We would require a Reference from the NSW Government or a change in legislation in order to regulate these charges. Section 60 of the PTA allows the Director General of NSWTI to determine fares in connection with taxi cab services – this does not include related services like credit card charges. We note that the Select Committee on the NSW Taxi Industry has made recommendations in relation to this issue. Comment : Cabcharge. Again, IPART referring to ‘regulating’ is misleading, nor is such mentioned in the quote above. That IPART implies that it cannot COMMENT nor

RECOMMEND on usurious surcharges on the public, which directly impact hugely on taxi operating costs, is certainly extraordinary, especially in relation to its Terms of Reference.

V. Productivity. IPART should ‘penalise’ networks and NSWTI with a productivity adjustment not 

drivers and operators (T Hirsch)  

IPART : Productivity. IPART cannot choose to regulate network fees – we have no general mandate to regulate where we see fit. This means that any productivity adjustment applied by IPART would reduce fares. Lower fares mean lower income for drivers and operators – it would not ‘penalise’ networks or NSWTI as their income is not directly obtained from fares. IPART tries to ensure that fares are sufficient to allow drivers and operators to recover their costs. Where they do not have control over these costs (for example, plate lease costs), including a lower value for these costs in fares would simply result in lower earnings for drivers and operators. Comment : Productivity. It’s good to see some IPART humour in responding to the quotation’s touch of sarcasm in suggesting that Transport and Networks might be ‘productivity penalised’. Albeit that sarcasm was in protest against IPART’s totally arbitrary and uninformed annual “productivity” penalties on drivers and operators, which IPART has declined to address.

W. Glossary. IPART’s removal of some terms included in the 2008 glossary from the 2009 report 

was unprofessional and lacking in openness and transparency (T Hirsch)   

IPART : Glossary. Glossaries are included in reports to explain terms used in the report – our report in 2008 accompanied a major review and as a result, a greater number of terms were used in the report and defined in the glossary. We revise the glossary every year to include only the terms used in the report so that it is as short as possible – the 2009 glossary contained fewer defined terms because fewer terms were used in the 2009 report. Comment : Glossary. The IPART comment seems to be evasive and unprofessional. The corrected key industry definitions take up less than half a page as in past IPART reports (and the Glossary font size can be reduced). The critical issue is correct industry definitions central to the TCI and taxi fare assessments! Not only as used by IPART - but by ALL stakeholders at any time in any submissions ! Key corrections of fundamental IPART errors which are apparently being avoided.

X. Box 2.2  IPART provides information on industry structure that deliberately conceals the true 

power structures of industry stakeholders (T Hirsch)  

IPART : Box 2.2 In the past we have provided a factual summary of the regulatory framework including the different parts of the industry (Box 2.2 in the 2008 final report) – this summary is included for background information and is checked by NSWTI (the industry regulator) for accuracy.

Xi. Box 2.2 IPART refuses to include the version of Box 2.2 provided by T Hirsch in its report - this shows a lack of openness and transparency and brings into question IPART’s credibility. (T Hirsch) IPART : Box 2.2 It is not IPART’s role to speculate on power structures within the industry. It would be inappropriate for us to include one stakeholder’s views of these aspects of the industry or of other stakeholder groups, and present them as factual information.

Comment : Box 2.2  The IPART statements are incorrect, false and misleading.   The IPART attribution at X is questioned because it does not appear to be in either the 13April2010 THirsch better data letter, nor in the 30April2010 T Hirsch Submission. And Xi is incorrect because the new Box 2.2 was in fact provided by the NSW TDA in 2009 to improve the lack of and simplistic information in the present IPART Box 2.2.   And IPART contradicts its own comments. No stakeholder has ever suggested that IPART “speculate on power structures”.  And IPART further misleads because the new Box 2.2 was volunteered for the purposes of “the nature and structure of the taxi industry” and “relationships that are important public knowledge”.   Again misleading is that the new Box 2.2 is the view of one stakeholder.  It was submitted by the NSW TDA and is the product of numerous informed experienced participants.  It was clearly recommended that any new Box 2.2 should be vetted by all stakeholders. Plus IPART states that TNSW can also check for accuracy !   IPART is correct in that a “factual summary of the regulatory framework including the different parts of the industry” is essential to IPART, stakeholders and the public.  But IPART evades this.   The expanded Box 2.2 provides openness of information as recommended by the NSW Parliamentary Inquiry and as the “Taxi Council agreed in the Parliamentary Inquiry with openness of information for better public understanding, especially in relation to the structure of the industry” (30Apr2010). 

Clearly all major stakeholders support improved factual information ! Meanwhile IPART continues to conceal significant information from the public and the taxi industry ! 

page 74

Xi. External costs. External costs (like insurance costs, licence lease costs and network costs) should not simply be passed through to passengers – IPART should consider what it can do about reducing these costs (ATDA) Xii. Plate lease costs. Plate lease costs and insurance costs are within the control of Government and hence shouldn’t be ‘rubber stamped’ by IPART (ATDA)

IPART : IPART cannot choose to regulate these input costs – we have no general mandate to regulate where we see fit. IPART tries to ensure that fares are sufficient to allow drivers and operators to recover their costs – where they do not have control over these costs (for example, plate lease costs), including a lower value for these costs in fares would simply result in lower earnings for drivers and operators. Future plate lease costs are to be determined by competitive tender. The Government has no control over insurance costs.

Y. Plate lease costs.  There is circularity between plate lease costs and fares (ATDA)  

IPART : Plate lease costs. We considered this issue in detail in 2008, where limited comment was provided from stakeholders. In that review we decided that in order to ensure that fares are sufficient to allow drivers and operators to recover their costs we should include actual lease costs. Including a lower value for this item in fares would simply result in lower earnings for drivers and operators.

Z.  More taxis.  All people should have the same access to taxis – there is a shortage in certain 

locations within Sydney (PDCN)   

IPART : More taxis. The number of taxis and their location is a matter for the Government, not IPART. However, we have made a recommendation that disaggregated information on WATs by geographic area is collected and published in order to allow local imbalances of supply and demand to be identified and rectified. Comment : More taxis. Interestingly and importantly, here is an example of IPART not claiming its inability to ‘regulate’. Rather it demonstrates that it is perfectly capable, and justified in RECOMMENDING that productive actions be taken. That response is encouraging and such actions should apply much more widely to the many issues raised by stakeholders!

AA. Plate lease costs.  IPART’s discussion paper did not mention the new arrangements for 

plate lease costs – IPART has a public obligation to consider the implications of these changes 

(T Hirsch)   

IPART : Plate lease costs. Chapter 2 provides an update on several changes to the industry, including the new arrangements for plate lease costs. It also explains why we decided not to wait for the results of these processes before finalising our recommendations this year. This information was also included in our discussion paper released in March.

BB. Better database. IPART should seek suggestions on what it should consider from the 

industry as IPART otherwise will ignore important industry developments that are occurring, 

as it appears to have done this year (T Hirsch)  

IPART : Better database. We are aware of current industry developments – we regularly discuss these issues with NSWTI and other stakeholders Chapter 2 clearly outlines IPART’s decision on the scope of this year’s review and the reasons for it. The issues raised by stakeholders that are not being considered this year have either: � already been considered as part of the 2008 review, or cannot be considered because results of industry developments will not be known in time (our terms of reference requires us to finalise our recommendations by 30 June). Comment : Better database. It was understood that NSWT&I is IPART’s “regulator and determinator”. But it is news that it is also a participant (or silent?) stakeholder. Other “stakeholders” however are mystified as to the scope of such review participations, which should surely be public. page 75

CC. Draft reports.  IPART should continue to release draft and final reports (T Hirsch)  

IPART : Draft reports. Where IPART will make significant changes to its approach, we will release a draft report, allowing stakeholders the opportunity to comment on these changes. Given the scope of this year’s review and our intentions to make minimal changes, we decided to release a discussion paper in lieu of a draft report. Comment : Draft reports and Terms of Reference. IPART repeatedly defensively refers to, and is frequently charged with disregarding its Terms of Reference. It also repeatedly defends its lack of actions citing past and future surveys and its inabilities to regulate, etc. In

publishing its Terms of Reference each year, it could perhaps print a complementary page explaining its interpretation of the Terms of Reference and IPART’s other related or non related procedures.

DD. Pre‐paid fares. IPART should not ignore the issue of pre‐paid fares – IPART should support 

this initiative (T Hirsch)  

IPART : Pre-paid fares. This matter is outside the scope of our terms of reference, which is only to make recommendations to the Government on maximum fares – the manner of charging those fares is a matter for Government and the taxi industry. We note that the Select Committee on the NSW Taxi Industry has made recommendations in relation to this issue. Comment : Pre-paid fares. Agreed, and no one has asked IPART other than to “recommend” support for pre-paid fares. Which however, as IPART should very clearly know, is far from its stated simply “the manner of charging those fares”. Pre-paid fares are not only a vital safety issue, but central to driver total earnings and hence directly pertinent to IPART “maximum taxi fares” responsibilities. And surely no more “outside the scope of the IPART Terms of Reference” and its “maximum taxi fares” responsibilities than IPART’s initiative in 2009 to ban the Harbour Bridge Return Toll.

EE. Fuel. IPART should recognise the changing costs associated with higher penetration of WATs 

and petrol vehicles (NSWTDA) 

FFi. Fuel. The TCI should include a measure of fuel usage for all taxi vehicle models, not just standard taxis – WAT vehicles are increasing in size from 2013 due to new headroom requirements (PDCN)

IPART : Fuel. The TCI is based on a ‘typical taxi’, which is a standard, LPG taxi (not a WAT or premium taxi) In 2007, 95% of the taxi fleet ran on LPG – while this figure may have changed since then, the costs in the TCI are still relevant for a typical taxi. This is an example of a factor that it is appropriate to review periodically rather than annually as change occurs gradually. IPART will undertake its next major review, including another taxi industry survey, in 2011/12 – this review will provide information to allow us to reconsider this issue.

FF. TCI costs inaccurate. IPART should recognise GST as a cost to drivers (ATDA)  

IPART : TCI costs inaccurate. IPART intends to reconsider this issue at the next major review in 2011/12. As noted in the 2008 final report (p 83): ‘Ordinarily IPART would carry out analysis for pricing reviews based on GST exclusive costs and any GST would be added to final prices by the regulated business. However, PwC’s analysis, which formed the basis of the reweighting process for the Taxi Cost Index (TCI) in this year’s review, used GST inclusive costs. In keeping with this approach, IPART also used GST inclusive costs for all of its analysis and recommendations. IPART acknowledges that the treatment of GST has implications for both the weightings included in the TCI and the level of fares compared with the level of costs. However, it is not straightforward to remove the GST from the TCI because not all of the cost items include a 10 per cent GST component.’

Comment : TCI costs inaccurate. Refer also numerous Comments above on inaccurate TCI costs.

GG.   Reduced taxi demand. The global financial crisis has reduced jobs by around 8% but the 

supply   of taxis has increased – IPART doesn’t take this into account (ATDA)  HH. Traffic congestion. IPART should take into account the impact of traffic congestion raising

unpaid hours – eg. travelling to booked jobs is slower (NSW TDA) IPART : The TCI calculation does not take into account supply and demand for taxis. Under the new licensing arrangements these issues are considered by the Director General of NSWTI in determining how many additional taxi plates to offer. Comment : Reduced taxi demand. The previous comments apply. Refer Q and Z above.

Comment : Traffic congestion. However traffic congestion above is evaded by IPART despite having addressed it on previous occasions. Earnings are in part a function of traffic congestion and the “waiting” rate and 26kph threshold are directly related, as well as other factors, evidently within the scope of IPART consideration. page 76

HH. Super. There is no fare revenue available for funding superannuation or entitlements out of 

takings (ATDA)  

IPART : Super. IPART tries to ensure that fares are sufficient to allow drivers and operators to recover their costs. However, we have no control over the allocation of fare revenue between the different groups within the industry.

II. WATs. Drivers should receive a $5 payment for picking up M40 (non WAT) TTSS passengers  to 

compensate for ‘loading time’ (NSWTDA)  

JJi. WATs. The $7.70 lift fee for WAT pick-ups is inadequate and should not be funded by the industry (NSWTDA)

IPART : WATs. Direct subsidies to drivers and how they are funded are a matter for the NSW Government. In our 2008 review we consulted on the idea of a loading fee for WAT pick-ups funded through higher fares. There was no support for us to pursue such a measure. Our 2008 final report (p 112) states: ‘Given the limited level of stakeholder support for an incentive payment subsidised through fares, and the view put to IPART by stakeholders that poor WAT response times tend to be very localised, IPART does not propose to recommend making an allowance for a WAT incentive payment in its fare recommendations at this stage.’ We note that the Select Committee on the NSW Taxi Industry has recommended that we are asked to provide advice to NSWTI on the value of the incentive payment as part of our annual fare review. If implemented, this recommendation will allow us to consider these issues in future reviews.

JJ. WATs. Higher running costs of WATs should be taken into account as should restrictions on 

shift hours of WATs – the lease discount and maxi‐taxi surcharge are not enough to 

compensate (NSWTDA)   

IPART : WATs. In our 2008 final report (p.109) we noted that: ‘The PwC survey did not provide enough information to allow IPART to estimate WAT costs. This is partly because WATs make up a small proportion of total taxis in NSW (around 10 per cent), so the number of respondents providing data on WAT costs was not significant.’ However, this matter was considered by PwC. PwC’s 2007 report states that (p 30): ‘It is estimated that the differences in net costs and revenues for WAT and standard taxis, particularly when the new driver payments are taken into account, are minimal. … As the proposed index will only be used for measuring changes in taxi costs, and not consider absolute differences in costs, the proposed index remains focused on standard taxis and no separate index was developed for WATs and Premium taxis. It is assumed that costs for WATs and Premium taxis move largely in parallel with standard taxis.’ We will undertake our next major review, including another taxi industry survey, in 2011/12 – this review will provide information to allow us to reconsider this issue. In the meantime, the level of subsidy provided by the Government to WATs is a matter for the NSW Government rather than IPART. page 77

KK. Airport. The station access fee for CityRail trains for Sydney Airport, Mascot and Green 

Square should be removed (Sydney Airport)   

IPART : Airport. We do not determine the station access fee for these stations. This is a matter for the NSW Government.

LL. Airport. Bus services to and from the airport should be improved (Sydney Airport)   

IPART : Airport. We do not determine the services provided under metropolitan bus service contracts. This is a matter for the NSW Government.

MM. Training. Drivers should have to pass certain requirements to show they have the right 

skill and attitude to perform the job  ‐ current standards are too low (Anonymous)   

IPART : Training. Drivers must obtain authorisation before being able to drive a taxi in NSW. This authorisation process involves driver tests and training in relation to customer service and local knowledge. NSWTI administers this program, and we have no involvement in this process. Any feedback on the adequacy of current standards should be provided directly to NSWTI. See http://www.transport.nsw.gov.au/taxi/driver-authority.html

NN.  More taxis. We note that the Select Committee on the NSW Taxi Industry considered this 

issue in detail. IPART should direct its inquiry towards the issue of using taxis to fill gaps in 

public transport services (G Hoskin)   

IPART : More taxis. We have a limited role within the taxi industry, which is governed by our terms of reference. The availability of public transport is a matter for the NSW Government rather than IPART. The Select Committee on the NSW Taxi Industry has made recommendations in relation to the use of taxis in community transport programs.

OO. Multiple hiring. There should be increased scope for multiple hiring of taxis (G Hoskin)  

IPART : Multiple hiring. This matter is governed by regulations on the industry – this is a matter for NSWTI, the industry regulator. It is outside the scope of our current terms of reference. Comment : Multiple hiring. Again IPART deflects issues which in fact impact directly both upon taxi earnings as well as services to the public which it monitors (erroneously) through the Network KPI’s.

PP.  Better database. IPART should consider other inquiries into the taxi industry and 

coordinate research with them – it is important that IPART is aware of industry 

developments (G Hoskin)  

IPART : Better database. We do not have a general regulatory power in relation to the taxi industry. Our only role in the industry is to make fare recommendations. We are aware of industry developments – Chapter 2 provides an update on several of these, including the current Upper House Inquiry. It also explains why we have decided not to wait for the results of these processes before finalising our fare recommendations this year.

QQ.  Government inertia and the influence of the Taxi Council have resulted in failure to 

implement recommendations from reports into the industry – IPART should not allow this to 

continue        (G Hoskin)   

IPART : Better database. We do not have a general regulatory power in relation to the taxi industry. Our only role in the industry is to make fare recommendations. The NSW Government’s response to past reports into the industry is a matter that is currently being considered by the Upper House Inquiry into the taxi industry. We note that the Select Committee on the NSW Taxi Industry has considered this issue in detail. Comment : Better database. The quotes at PP and QQ are supported in several Comments such as in BB and elsewhere above. page 78