01 February 2006

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Business Today

Taxis reform will not lead to lower prices

James Debono

The reform unveiled last Saturday aimed at regulating the white taxi service will not bring a significant reduction in prices according to the ministry for transport.
Expressing his disappointment on the reform, economist Edward Scicluna told Business Today that it is “unpardonable that so much energy could be spent on planning and undertaking a reform which does not deliver the basics: cost and price reduction.”
The reform will also not permit the issue of new licences in what remains a closed shop restricted to the present owners of white taxis.
To encourage limited competition, government will however allow a new service provided by electric taxis to compete with white taxis in “certain areas.”
“Prices for white taxi trips are expected to remain at the same levels of today or in certain cases be marginally cheaper,” a spokesperson for the ministry for transport and urban development told Business Today.

The reform announced by Minister Jesmond Mugliet includes the introduction of a code of conduct for owners and taxi drivers.
The exercise is intended to speed up disciplinary procedures against owners and taxi drivers who behave badly or offer a poor service.
On-the-spot fines will be imposed for these infringements. Taxi drivers will also be obliged to wear a uniform and display a tag. The tag can be withdrawn when a serious crime is committed.
By 1 May, every taxi has to have a taximeter installed.
A spokesperson for the ministry told Business Today that it is unclear if the demand for more licenses to operate similar services to white taxis exists.
He also pointed out that a certain amount of competition already exists because black taxis can offer chauffer-driven services. Black taxis are operated by registered garages that offer an on-call service for clients. Yet black taxis cannot offer their services from taxi stands in tourist areas which are restricted to white taxi operators.
A call for the provision of an electric taxi service is expected to be issued shortly.
“Although this cannot be described as full liberalisation, this is definitely a diversification of taxi services in Malta,” the spokesperson said.
Although the reform announced by Mugliett falls short of full scale liberalisation, the opening up of this sector to competition is still on the agenda of other ministers.
Back in August 2004 Tourism Minister Francis Zammit Dimech, declared that “there was no justification for the present limits on the number of white taxis.”
In a stern warning to irresponsible taxi drivers during last Monday’s edition of TV programme Int X’Tahseb, Francis Zammit Dimech said that liberalisation will be reconsidered by the government if the current reform fails in bringing the desired results.
Even MLP spokesperson Evarist Bartolo expressed himself in favour of the liberalisation of this sector.
Liberalisation is also supported by the Malta Hotels and Restaurants Association.
Speaking to Business Today George Schembri, Chief Executive of the MHRA said he agreed with the liberalisation of this sector as long as standards are maintained and monitored by a competent body.
While welcoming the government’s initiative the MHRA spokesperson said that the success of these reforms depends on “proper enforcement, ongoing monitoring of standards and proper fines to curb abuse.”
He also augured that the new regulations on taxis are also applied to regulate other forms of transport used by tourists such as the public bus service, karozzini, mini buses and coaches.


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