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1 Appendix D METHODS of CALCULATING HACKNEY Appendix D METHODS OF CALCULATING HACKNEY CARRIAGE FARES Rushmoor Borough Council The scheme of hackney carriage fares is subject to review on an annual basis. A review involves the presentation of any proposals for change to the Licensing & General Purposes Committee; together with a notional percentage uplift figure calculated using a formula approved by the Council and various comparison benchmark indicators. The current formula is based on various indices and measures of inflation, weighted to reflect factors relevant to the trade (e.g. the cost of fuel) and was developed in consultation with the Taxi Trade Board. Benchmark indicators To assist determination of any proposed variation the following benchmarks will also be reported to the Committee for consideration. (a) An uplift figure calculated in accordance with the approved formula; (b) A direct comparison table for any proposed changes to the pull off rate and/or running mile per unit distance travelled; (c) The current fare charts of neighbouring authorities; (d) A current league table of national / regional taxi fares; and (e) Practical comparable examples of fares arising from both the current and proposed fare schemes. Cardiff Uses a complex index comprised of the vehicle costs and the drivers costs. Basic breakdown into 1. Vehicle Costs: made up of six elements :- Purchasing a taxicab, Insurance for hire and reward, Parts, Garage repair and maintenance, Fuel, Miscellaneous Items. 2. Drivers Costs: The drivers cost index is obtained from the average earnings table supplied by the Office of National Statistics for private sector services. The index figure is the percentage change between the previous and present period applied to the value for average earnings. 3. The Annual Change: The above calculation produce figures for the vehicle and driver's costs. It is estimated that in the taxicab industry, 55% of the total costs are labour related and 45% vehicle related. The annual index measure of change is therefore found by the following calculation:- (Vehicle Cost Index x 45) + (Labour Cost Index x 55). Manchester Halcrow is an independent company who provides advice across the public and private sector. Halcrow was commissioned by Manchester City Council in March 2007 to review the current model used by the Public Carriage Office in London to calculate increases in the hackney carriage fare card and to develop a working model for Manchester (Halcrow Manchester Formula). For example: Component on index Dec 2007 Dec 2008 % Change Data Source Vehicle Cost 6371 6398 0.42% Mann and Overton Parts 2836 3100 9.30% Mann and Overton Tyres 381 436 14.49% Mann and Overton 1 Garage /Servicing - Labour 843 886 5.10% ONS* Fuel 4054 4033 -0.51% AA Insurance 4172 4345 4.15% Haven Insurance Miscellaneous 462 462 0.00% Licence Renewal Total Operating Costs 19119 19660 2.83% Average National Earnings 4908 26020 4.46% ONS* Grand Total 44027 45680 3.76% * Office of National Statistics Bolton Formula: using Annual wage, Average hourly rate, Annual mileage, “Dead mileage”, Average running costs per mile, The cost of insurance, Cost of road fund licence, Cost of hackney carriage licence, Annual running costs. Divide the annual running costs by the annual mileage minus the “dead mileage”. Using the above data, the fares are calculated by obtaining the following: The distance unit. Divide 1,760 by (the cost per mile divided by 10). This gives the distance travelled for each 10 pence of fare. The time unit. Take the average hourly wage rate for the Northwest which is from the National Statistics Office and is updated annually in April, deduct 10% for income from gratuities which gives the hourly rate then divide 3,600 by the ( hourly rate /10). This gives the time for each 10 pence of the fare. The initial price. Sum charged for hiring a hackney carriage for an initial distance and/or an initial time. Using all the above information the hackney carriage fares can be calculated and as the annual average wage, the average hourly rate, the average running costs, the cost of insurance, the annual licence fee and the cost of vehicle excise duty change from year to year it can be updated to reflect the current costs simply by putting those figures into the calculation formula. Swindon Established formula using: 1. Fuel costs. This figure is obtained from the Confederation of Passenger Transport and is available from their website, www.cptuk .org . Figures are compiled on behalf of the Confederation of Passenger Transport and are published twice per annum. 2. Labour Costs [Average Earnings Index (whole economy)], available monthly from the Office of National Statistics www.statistics.gov.uk . 3. All other costs and profit element [Retail Price Index (excluding mortgages)], available monthly from the Office of National Statistics and published on their website. Rochford The ALL ITEMS INDEX is used to determine the percentage increase for Hackney Carriage Fares. Reigate and Banstead Formula takes account of fewer factors than others available. Only fuel, insurance and maintenance are considered. Each increase in cost of the three variables is multiplied 2 by a percentage, which relates to the proportion of the trades expenditure on these three major costs. North Tyneside Formula to calculate a ‘cost per mile’ figure for the operation of a Hackney Carriage. The formula takes into account vehicle running costs including insurance, and driver earnings based on average earnings for the region. Corby Formula based approach utilising the Motoring Expenditure part of the RPI Table for June of each year. Simple methodology linked to the calculation of a % increase based on the average of the Retail Price Index (RPI) for motoring expenditure. The only element of the formula that is not taken directly from the motoring expenditure section of the RPI table is the cost of the purchase of a new Hackney Carriage vehicle. This was because previously the cost of the purchase of a new Hackney Carriage vehicle was significantly different to that of a normal motor vehicle. Motoring expenditure Group: Purchase of Hackney Carriage, Maintenance of motor vehicles, Petrol and oil, Vehicle Tax and insurance Norwich Use formula based on the Transport and Vehicles general cost index is formed by finding the average inflation figures from five of seven sub-headings:- purchase of motor vehicles, motor insurance, maintenance of motor vehicles, petrol and oil, vehicle excise licences. Along with additional headings suggested by the Taxi trade: radio rental, radio repairs, rents, wages, rates Gosport Borough Council Formula introduced to help estimate the change in costs borne by the “typical” taxi operator and appears to be more reliable than those previously employed for this task. The formula uses six weighted criteria in which to gauge the average percentage increase in the costs of operating a hackney carriage. Average Earnings, RPI, Vehicle Purchase, Maintenance, Fuel, Tax and Insurance. LA’s which permit either metered fare plus 50% for extra passengers, night rate or bank holiday rate Eastbourne Ribble Valley Leciestershire district council Coventry Basingstoke Manchester Portsmouth 3 .
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