PMV and taxi fares to be reviewed

National, Normal

The National, Wednesday July 4th, 2012

THE Independent Consumer and Competition Commission proposes this month to begin a review of the fares of public motor vehicles (PMV) and taxis to gauge industry participants’ views to help set the determination in December.
The determination in use now were set in 2007 and considered outdated.
The commission will then decide to continue, alter or amend the existing pricing arrangement and make recommendations to the Minister for Treasury on its final decision.
The commission’s newsletter for the month reads in part: “The challenge is upon the commission to make informed decisions for the good of the industry, and therefore is inviting submissions from all stakeholders, including the travelling public, PMV and taxi owners or operators, relevant government agencies and any other interested persons to participate in the review.
“Officers from the consumer protection and the prices and productivity divisions will visit the different regions to gauge views from stakeholders regarding PMV and taxi issues.
“The passenger transport industry is a diverse industry with stakeholders and participants from both the private and the public sector.”
While PMVs and taxis are mainly owned privately, PMVs operate over designated routes, while taxis operate within urban areas and are not restricted to routes.
The commission has warned that as a matter of compliance, PMV and taxi operators must ensure their vehicles are roadworthy, registered and licensed to a qualified and proper person.
The issues to be considered during the review will be in relation to regulation, price control, cost and revenue submissions, fare adjustments, safety, service and safety standards and enforcement.
There will be considerations into the possibility of a government-run PMV service and public policy changes on any particular aspect of national highway routes.
The review is to decide whether a form of regulation of PMV and taxi fares is still required and if so, which form of regulation is appropriate.
There are two forms of regulation as outlined by law: The Price Monitoring (under section 32A of the Prices Regulation Act) or the Direct Price Control (under Section 21 of the PR Act).
Price monitoring is a less stringent form of regulation.
The commission will monitor fares charged against a bench-mark price.
Where fares have increased above the benchmark price, the commission will ask the operators to provide justification for such increase.
If the commission is not satisfied with the justifications it will request the Minister for Treasury to subject fares to direct price control.
Under direct price control, which is the current form of regulation, the commission, using its pricing formula, sets the maximum fares for PMV and taxis and adjusts them accordingly.
Forms of price control are important considerations, and the commission uses a formula that takes into account movement of fuel prices, changes in other operating costs and changes in the consumer price index.
In the existing arrangement, automatic adjustments to PMV and taxi fares are made on an annual basis.
The commission is seeking submissions on how frequently these fares should be adjusted.