A Cab Licence Is Really Not An Asset!
27 Nov 2000
Re: A Cab Licence Is Really Not An Asset!
With this business, there aren't any similar difficulties, geographical borders and scenarios replicate themselves global.
The problems of regulatory costs and licence values have a common foundation in common law which appears to have overlooked in every one of the political rhetoric coming from many sides.
For this is certainly no asset such evidence for collateral functions is a higher risk investment.
It is very unfortunate that lots of licence holders paid exorbitant amounts of cash in good-faith, without first doing their assignments to establish the security of the investment. It hasn't been a solution.
The delusion a license has worth had its source in antiquity. All economists are quite aware that any moment a regulatory authority limitations the amount of licenses, without concurrently prohibiting transfer, those licenses will instantly start to obtain an unofficial value available on the road.
It's regretable the regulatory authority in antiquity didn't prohibit transfers coincident with imposition of the limit.
Also in common-law is really a fundamental condition that regulatory costs should bear a fair connection to the real price of the management and regulatory steps behind that charge. The quantity of fee could be determined by regulatory measures, but the kind of fees need a basis in laws. A fee can't be utilized as a vehicle solely for sales generation, that's solely a legislative power. For more on taxis check out airport taxis cannock.
Any regulatory authority establishing a fee has to be ready to protect that fee in terms in accordance with the steps as well as activities behind it, else it might well neglect a court challenge.
Regulatory authorities world-wide, not only Dublin, have frequently found themselves in great trouble attempting to unravel the inattention and supervision of the ancestors. Most any effort to "repair" the problem now will most probably have the result of extinguishing something perceived as an asset.
This really is enormously unlucky, but no secret.
Reform is desired, it won't be simple, but is certainly crucial.
It's unfortunate that considerable amounts of money are expended in the understanding that a cab licence can be an asset. But, it's more successful, all the way back to common-law, a license is really not an advantage. It hasn't been a solution.
A license is just an intangible authorities authority to manage a taxicab for a given time period, at end-of which, that authority automatically expires. There's no promises of any sort, no right of continuity, and no promise the regulatory environment might transform.
The existence of the sheet of paper, or perhaps a tin plate, is only observable evidence the holder of the license is correctly recognized to the authorities, has paid a suitable fee for the present license period, and has agreed to specific conditions attached to the license.
The holder of the taxi licence is approved by the authorities to "manage" a taxi for a given time period. There's no authority to-do other things. Those holders who opt to "lease" their license are in breach of basic common-law, for they don't own the ability to perform as such.
People who've "purchased" a license available on the road are unfortunate sufferers of the simple failure to-do some basic assignments. That a license does not have any asset value is really well established in law text books and fundamental economics. There's even considerable evidence available on the Net.
Banks understand this reality and are understandably unwilling to allow loans to cover such a risky enterprise, unless there's considerable security around the table, apart from the license.
The Taxi Task Group will be commended for finally coping with the archaic system in a way. The transition won't be simple, however the Ottawa Transition Board should never ever be viewed to cave into erroneous business demands to maintain status-quo.
Terry Smythe
CAB-L Creator and Moderator
