New approaches needed for taxis and tourism - James Lewis

[This is an expanded and updated version of an article published in the Jersey Evening Post on 22 June 2024]

Summary

• Jersey has allowed the taxi industry to fall behind norms in the rest of the world by failing to update policy that has governed this industry since the 1930s.
• The existence of an informal market provides solid evidence for the demand that already exists in the market for a better type of taxi service.
• Previous reports have been overlooked and have not been implemented correctly.
• Barriers to entry, such as the requirement for drivers to be full time and requiring drivers to be part of taxi organisations, have led to a fall in taxi numbers that allow for over pricing and a failure for supply to meet demand.
• This failure has had a detrimental impact on other parts of the economy, including the nighttime, tourism and experiences sectors.

Background

In 2009, the taxi service Uber was created and in doing so completely revolutionised the taxi industry across the world. Creating a cheaper, faster and smoother taxi experience, the service now exists in almost every part of the world and has come to be an expectation (and even a by-word) that equates to ease and affordability in the taxi industry.

In Jersey, this is not the case. Laws that date from the 1930s are still the ones governing how taxis and car hire services are operated, which have created legal restrictions that have prevented a service like Uber from being able to operate on the island.

Naturally, the taxi companies have taken advantage of these protectionist laws and have fallen short of a modern consumer’s expectations of a taxi service. Countless anecdotal data speaks of the inconsistent pricing and service delivered.

As a result of the lack of an adequate service an informal market has emerged; Facebook groups have been created that are dedicated to the offering of, and requesting for, what operates like a taxi - ‘Jersey Lifts’.

On June 27 2024, Policy Centre Jersey published its policy brief on Regulation of Taxis, which concludes that there is ‘a strong case for reforming the regulation of taxis’ after highlighting a number of short comings from the government after previous reviews’ recommendations have still not been adopted by the industry.

The perceived failure of a service and the proliferation of an informal market that operates in a legal grey area are all strong evidence that the government need to make decisive decisions on policy urgently.

Proof of concept

Two Facebook groups have emerged over the last decade that offer a market place for ‘Jersey Lifts’. With a combined membership nearing 40,000 and requests for lifts coming every hour of the day; the message is clear – a new type of taxi is needed.

The demand for this type of service is apparent because of the lack of clarity that exists within current taxi regulations. For example, there are regulations on fixed fares, with recommendations for the implementation of standardised fare calculators that display the growing fee as the ride progresses. However, it is noted in Policy Centre Jersey’s Policy Brief that these calculators have not been standardised, which makes the standardised fares arbitrary; there is no accountability through the recording of ride times and their costs.

Jersey Lifts also offer a more sustainable and mutually beneficial agreement between driver and consumer. Since Jersey Lifts is legal if no profit is made, it enables these lifts to offer the cheapest possible transport at cost prices and ensures safe routes home, which is particularly important when you consider this service is largely used by those who are going/coming from social occasions and might be at their most vulnerable.

While most of those who offer Jersey Lifts have nothing but positive intentions, the fact that there is no vetting of drivers presents an obvious risk. The government should take steps to bring the Jersey Lifts concept within legislation to protect the well-being of its Islanders. Instead of ignoring the obvious demand, the government has an excellent opportunity to instate a new type of taxi service that enables for safety, equity and efficiency that falls into line with standard practice that is already seen around the world.

Impacts on other parts of island life

Having worked in hospitality during breaks in my studying for the past three years, I am well versed in the hassle that ordering a taxi can be. Either there are no taxis or a pre-booked one doesn’t show up. It has become frustratingly difficult for both islanders and visitors to plan for their days and evenings on the Island. I have even heard stories of a surcharge for those paying with plastic – a caveat that does not appear on Gov.je’s “Taxi fares and regulations” page.

It has all become rather embarrassing, especially when you consider that a visitor’s first impression of our beautiful island is marred by either having to wait too long for a taxi, a taxi is not available, or by being taken advantage of and charged more than they would ordinarily expect for an equivalent service elsewhere in the world.

Tourism employs a huge number of people, and it crucially gives our island character that impact metrics that are not easily determined, such as happiness, community and mental health. Regrettably, the new buildings on our waterfront, which accommodate financial services, do not have the same holistic impact as the preservation of Jersey culture through our tourism sector. It appears that tourism investment and thinking has been crowded out to the extent that the government is now doing very little to help this portion of the economy. It is of the utmost importance, for recognition of tourism’s historic importance on the island and ensuring it is well situated for the 21 ^st century, that new energy and resources are committed to bringing it back into line with what a visitor might expect if they visited somewhere else.

The strength of other sectors of the economy is vital for a diverse and resilient economy that is less susceptible to demand and supply-side factors that can disproportionately affect the most vulnerable of islanders.

If we look beyond Jersey, the importance of reinforcing a robust and diverse economy is plain to see. Nations that found themselves bathing in pools of black gold are now investing much more broadly across their economy, particularly tourism. Dubai, for example, will spend 12% of its GDP on its tourism sector this year. While financial services will outlast the end of the oil economy, the point stands that maintaining a diverse economy is vital for the longevity of a healthy and wealthy economy.

The current taxi laws were introduced in 1935, a time that could hardly comprehend the internationalism, connectivity and increased pace of life that has developed over the intervening years. These laws are simply not capable of accommodating for taxi services that have emerged over the past 15 years or so.

Opportunities for the future

The story of Jersey Lifts is a neat analogy for our island’s approach to new technologies. While we are treated to some of the fastest broadband speeds in Europe, consumer technologies, which are designed with cost and time saving in mind, seem to be repeatedly ignored.

If the government was to embrace a service like Uber and make the legal alterations that are necessary, then Jersey’s visitor and experiences economy will be brought in line with current standards across the world.

A system that operates on a similar business model to Uber has been launched this year, but competition is vital for any marketplace to maximise the efficient allocation of resources. The app, Ryde, has so far proved the first mover in this space, but competition is vital.

In PCJ’s taxi brief it is mentioned that in the current Taxi regulations, drivers can only have their own vehicle licence if it is their full-time job. This is not how a modern economy functions. The rise of the gig economy across the world has seen the service industry become far more flexible, especially in western economies with higher levels of education. If drivers were able to choose when and how they could work, there would likely be a vast increase in the number of taxis on the island; likely many of those who do Jersey Lifts would switch to the new platform that should include employment protection. Enabling people to increase their incomes not only improves consumer bank accounts, but also bolsters government coffers.

In the throes of a cost-of-living crisis, the Jersey Lifts model also serves as a vital lifeline for people who want to pick up extra cash when they are not working, so it seems a natural step to accommodate for this.

Moving forward

In 2017, a Jersey Lifts app was developed, yet just a year later it was shut down, with the creators citing a lack of regulatory support from the government. A new department should be created, employing those with industry expertise, to ensure that a superior, or alternative, product is available to Islanders.

Surely if a quarter of the Island support and engage with the Jersey Lifts model, this government should seek to find out what it is that makes it such a popular method of transport. A study should be commissioned to determine what Islanders wish to see for Jersey’s taxis.

The government should be actively engaging with companies like Uber, performing studies of these services in comparable markets and making the necessary legislations to allow a new and more entrepreneurial type of taxi that hands more power to the individual rather than to the old school taxi companies. If this is achieved, our island could look more modern, professional and ready to accommodate for the rapidly expanding world of app-based services.

Our high street, visitor economy and nighttime economy are all under threat in a digital world and against the background of a cost-of-living crisis, which means people have fewer pounds to spend on pleasure and leisure. This is an issue that should near the top of the government’s agenda.

Shaking off our insular mindset and embracing new technologies to strengthen our economy might be just what we need to reinvigorate a varied economy that attracts locals and tourists alike.

Conclusions

The current taxi policy is simply not good enough, because it does not allow for proper competition in the space. In the PCJ’s Policy Brief, it is highlighted that the move to a single type of taxi opposes what is considered ‘normal practice’ in other parts of the world. As a result, the government’s inaction has led to a massive inefficiency that has created a closed shop industry on the island that has not responded to consumer demands; aided by legislation that is nearly 90 years old.

The very existence of the informal market is proof of government failure and has left a once prioritised part of our economy neglected and has suffered as a result. The government must rehaul their entire approach to the visitor and experiences economy if they want to ensure growing positive outcomes for a greater portion of the economy. What we are left with is something that is ‘contrary to competition law’, making this issue something that must be near the top of the government’s agenda.

Biographical Note

James Lewis is 19 years old and was born and raised in Jersey. He now splits his time between Jersey and Bristol, where he is currently working towards a degree in English from the University of Bristol. He is fascinated by social issues in politics, cultures and international diplomacy. Having written for the University’s newspaper and the Jersey Evening Post, he hopes to become a journalist once he graduates.

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