By Douglas Kruger
AH, taxi fares.
Do you take the legitimate operator with the rooftop sign or cross yourself and hop in the back of the unlicensed Corolla, hoping not to become a character in a Wrong Turn movie?
A more poignant exemplar of Jersey’s competitiveness problem is hard to find. Yet, unpacking it may be instructive.
One faction believes it is not a government’s place to uphold a monopoly. If consumers can obtain the same service at a lower rate, why shouldn’t they? And why prevent them from doing so? Do we really elect representatives to make life harder and more expensive?
The other faction, taxi drivers, point out that they cannot be profitable if anyone with a car can casually undercut them.
On one level, free-market systems are not supposed to care about such things. If you can’t compete, you can’t compete. I certainly can’t call on government to hobble my competitors. Let value be the determinant, and let the best provider win.
But that’s not the full picture here. Taxi drivers are also not operating in a free-market system. Not really. Like everyone else, they are regulated to within an inch of their profit margins. They themselves are not free to be competitive.
Mandatory payments that they must make to government before they are permitted to operate include medical tests, badge tests, DVS badge renewals, vehicle monitoring and more. The most expensive cost is a special insurance and that too is mandatory.
That’s not to mention that their cars may only be so old (measured in mileage), whereas Corolla guy is still rocking a muffler from the 80s.
These impositions affect the taxi operator, but not the casual driver.
Taxi drivers are right to point out that this places them in an unfair situation, but they were not put there by their competition. It’s the compliance costs and restrictions that make them uncompetitive. They must start from behind, build these costs into their service and then, as further penance for doing everything right, they may then pay tax on every penny they earn.
Which side of that problem should we solve?
Well, instead of making things cheaper and easier for the taxi operator, officials have been talking about clamping down on “illegal” rides. But let’s be honest. You can’t.
Imagine:
“Sir, are you using an illegal taxi?”
“No.”
“But you just got into this car, handed the driver a £20, and now you’re headed home.”
“Yip.”
“Well? Explain yourself!”
“Not that it’s any of your business… But this is my mate. I’m paying him back for a pint and he’s giving me a lift.”
“Prove to me that he’s your friend! I want to see documentation showing that you know one another!”
“Go jump in the lake.”
“But I want to run this parish like North Korea!”
“Sweet, bruh. Lake.”
The sum of the matter is that every industry lives or dies by competitiveness. And we need to find ways to make every Jersey industry more competitive, freer, easier, not less so.
There are reasons the Americans say that Europe’s greatest export is regulation. Must that be us too?
I like to study places that have sought out greater economic freedom by design. The city of Adelaide in Australia happens to be one of them. It’s a simple story and you know the outcome in advance, but predictability turns out to be desirable in this instance.
A while back, the Adelaide central business district was in trouble. They’d lost foot traffic, hospitality jobs were down, tourism was suffering. Adelaide discovered that it was no longer competing with other late-night economies and started asking why.
Would you guess it? The problem turned out to be too much regulation.
The community put pressure on its own government, demanding reform to stop closures and to free up entrepreneurial possibility.
The best part: their government actually listened. In place of officious regulators looking forever more for things to ban or burden, Adelaide civil servants approached businesses and asked them precisely where the barriers and hindrances lay, then summarily removed them.
Coupled with this, they invested in festivals, improved transport infrastructure, and streamlined, simplified or removed employment barriers.
We are starting to do that last one here. But we still place way too many obstacles in the path of people who want to work on this Island. High cost of application, two-tier living and the recently disputed permission-to-remain residing with the employer.
When Adelaide took a hatchet to its own bad habits, the oxygen quickly began to flow.
Freedom works, and these things rarely take long. After deregulating and investing, evening and weekend consumer spend rose sharply across hospitality, retail and entertainment.
Adelaide became Australia’s festival capital, boosting the state’s economy, promoting massive job growth and putting the city on the world map.
And success begets success. The Adelaide Fringe is now the southern hemisphere’s largest arts festival.
The effects spread out across a range of industries, bumping up the need for suppliers, logistics providers and both contract and indirect employment. Freeing up pubs, restaurants and festivals caused a rising tide that pulled other industries upward in its wake.
And the results were not only economic, but also social. Previously quiet and decrepit streets and laneways transformed into hubs of activity, attracting patronage from around the world. Musicians and artists travel there to be discovered. A place that was dying is now a centre of life, and isn’t that a wonderful thought?
None of this is revolutionary. Or even especially ingenious. It’s common-sense, but it takes the willpower to drive it.
I feel for Jersey’s taxi drivers. I feel for all businesses. We are an unusually highly regulated society and it isn’t necessary, especially on a small Island, where it’s eminently possible to be agile.
Every business lives or dies on its ability to be competitive. Let’s not hamstring them in advance. Let’s reverse the burden of ever-mounting regulatory impediment and see what Jersey entrepreneurs are truly capable of. Elections are around the corner. Now’s the time.
Douglas Kruger is a keynote speaker and author. His books are all available via Amazon and Audible.
