Following on from yesterday’s post on fuel price hikes, a story about the local taxi drivers campaigning to increase their rates caught my eye this morning.
Taxi fares in Britain are regulated by the councils in whose areas the drivers work. So, if they want to increase their rates they have to petition the council, which will then rule in favour of their proposal, or against.
(Mini cabs, which you book on the phone, can charge whatever they like.)
Well, right now the drivers working in a lot of the towns around the Blagger plot are campaigning to increase those prices, from a base of £2.70 to £2.80. Just 10p, or 3.7%. It doesn’t sound like much, does it. Except that while that 10p is the headline figure onto which everyone will latch, the more important figure is what that £2.80 represents.
Currently your £2.70 will take you 725 yards. Under the drivers’ proposals, £2.80 will take you just 586 which, as a letter writer to the local rag pointed out, means the cost of going the same distance has actually increased not by 3.7%, but by 28.28%.
That same letter writer has worked out the actual economics of the situation and it’s quite baffling. I’ll present his argument here, in its entirety, and point out that while it may leave your head spinning the upshot of his argument, whether he meant it or not, is that wherever you’re heading, you’re better off on your bike.
The actual basis for the increase is the cost of fuel, 725 yards is less than half a mile and would be travelled by most cars 50 or 60 times on a gallon of petrol or diesel at a cost of about 12 pence each trip (50 x 12 = 600) on the basis of a £6 gallon or 10 pence when it was £5 a gallon.
The increased cost for this trip would therefore be about two pence or 20 per cent of the cost of the fuel which forms approximately 3.5 per cent of the cost of a £2.70 fare, so put another way 20 per cent of 3.5 per cent is 0.7 per cent of the overall fare, which constitutes he increase 0.7 per cent of £2.70 which is less than two pence.
Now by my reckoning he’s shot himself in the foot, as he seems to be saying that the increase should be about 2p, and that for that we should still be travelling 725 yards, although he uses it as an argument for why we should ‘share the fact that cheap energy is running out’.
That’s as maybe, but we have seen petrol prices decrease lately, and I haven’t seen the taxi drivers lowering their expectations. The trouble with arguments like this that take a short-term view of any situation is that they are almost impossible to roll back. Once the drivers get the right to charge us £2.80 for just 586 yards of travel, there will be no going back.
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