Merc Vito’s up against TX Cabs

London’s black cabs might be as iconic as Big Ben, but in a city that has seen other much-loved symbols such as red telephone boxes and Routemaster double-decker buses almost disappear, being iconic is no guarantee of a future.

London’s famous licensed taxis, whose origins go back 350 years, are, along with their drivers, now facing stronger competition from new rivals.

What make London’s taxis so special are the tight restrictions on the kind of vehicle that can be used and the extremely rigorous exams on the city’s topography that licensed drivers must pass. But new technology threatens both the distinctive purpose-built vehicles and their drivers who know every alleyway in Europe’s largest city.

After the collapse of Metrocab in 2006, only one company, London Taxis International, a division of Manganese Bronze Holdings PLC, built a vehicle that met London’s stringent Conditions of Fitness, which lay down standards vehicles must meet to be used as cabs. The hardest of these rules is a maximum 25-foot (7.5-meter) turning circle, which allows taxis to make U-turns in city streets laid out in the days of horse-drawn carriages. LTI, which has a 60-year history of cab-building, is the maker of the iconic London taxi, with its round contours and retro appearance—a shape that dates back to 1958.

But in 2008, a new competitor based on the Daimler AG-designed Mercedes Benz Vito minivan was approved for use by the Public Carriage Office. This approval was controversial, since a traditional requirement of the Conditions of Fitness has been that taxis, for reasons of passenger safety, should be instantly recognizable and not easily mistaken for any other kind of vehicle. The Vito, however, is used in both the private-hire business and as a family people-mover. But in approving the Vito, Transport for London—which administers taxi licensing—said that provision of the orange “taxi” sign on the roof of licensed cabs is distinctive enough.

While the new minivan-based cabs might affront traditionalists, they seem to be a hit with drivers. The base vehicle is built by Daimler in Spain, then adapted as a cab in the U.K. Its distributor, KPM U.K. Taxis, says the Vito cab has achieved a 24% share of new-taxi sales in London since its launch. The company expects to have sold 1,000 vehicles by the end of this year.

It isn’t that the Vito, as an adaptation of a mass-produced vehicle is significantly cheaper to buy than an LTI cab, as both cost between £35,000 and £40,000 ($54,000-$62,000); rather that it’s less expensive to run—with fuel consumption of 28 miles per gallon (eight liters per 100 kilometers) as opposed to the 20 mpg (12 liters per 100 km) offered by the LTI cab—and it’s more comfortable for drivers and passengers, according to commercial vehicle insurance specialists Staveley Head.

“It is indeed sad that such an iconic vehicle [as the LTI cab] is being ousted by a new rival,” a Staveley Head spokesperson said in a press release. “However, this is clearly a superior vehicle which offers excellent safety features and comfort for passengers, as well as improved fuel economy for drivers.”

In July, Manganese Bronze posted a larger-than-expected loss on the back of a drop in cab sales, which fell 12.9% for the first half of 2010 to 803 vehicles. The company also said at the time it doesn’t expect to turn a profit this year.

“The London taxi market has been tough for the last two or three years,” says Manganese Bronze’s chief executive John Russell. “The basic problem is one of confidence. Taxi drivers hear about the troubles in the economy and that makes them feel less confident to invest in a new cab.”

But Mr. Russell doesn’t think competition from the Vito will affect his business in the long-term. “We’ve always had very capable competitors but we continue to take 75% of the market in London, despite the qualities that the Mercedes has.”

These qualities are attractive. Steve Sheehan switched to a new Vito in April after having driven a LTI vehicle for over 30 years: “In comparison to the more traditional taxi, the Vito is far more advanced and comfortable vehicle for the passenger and the driver. I really enjoy driving it. The suspension on this vehicle is far smoother to the traditional taxi, there’s a lot more room and it’s more economical with fuel.”

But a decline in the use of its traditional vehicle is not the only change roiling the cab business, as traditionally, the industry has been split. On the one hand are the licensed black-cab drivers, who have to memorize some 25,000 streets—known as “The Knowledge”—and are allowed to ply the streets for hire. On the other are minicabs, which can only be pre-booked or picked up at an office.

Minicab drivers used to have an unsavory reputation, with an average of one rape in a minicab per week and a judge saying in 2003 that nobody could use one “with any degree of safety.”

But licensing of the private-hire sector, which began soon after the judge’s comments and involves criminal-record checks on drivers, and the widespread use of the satellite navigation systems have blurred these differences and eroded the competitive advantages of the black cabs.

“Ever since the private-hire industry became licensed, people’s doubts about using the service are now cleared up,” says John Griffin, founder and chairman of London-based minicab company Addison Lee. “We used to attract the wrong sort of person and had no controls; now we have the latest technology and have improved our customer service,” says Mr. Griffin, who founded the company in 1975 with one cab. Now the company has a 15% market share, although its 2,400 vehicles represent only 5% of London’s 54,000 minicabs. According to Mr. Griffin, the company’s sales have grown by 22% so far this year in a declining market.

“The black cab, though an icon many tourists would like to experience, hasn’t responded to the changes. It belongs to a museum,” he says.

Manganese Bronze’s Mr. Russell disagrees: “You know when you get into a London cab you have a driver who knows where he is going and knows how to do his job properly and you are not going to get ripped off on the fare.”

Jamie Townsend, a 33-year old who has been a minicab driver for the past 13 years thinks “The Knowledge” is a thing of the past.

“I don’t see the need to take the full knowledge test because I feel competitive enough and capable of earning a decent amount with the skills I have now,” he says. “You’ll also find black-cab drivers use sat-nav nowadays.”

Mr. Townsend says “minicab drivers nowadays are as good if not better than black-cab drivers because not only are we regulated by the PCO but also by the companies we work for.” (Black-cab drivers can take fares without being affiliated with a taxi company.)

Mr. Griffin says black cabs are also battling with more competitive prices. “Black cabs are very competitive on short distances but once the meter gets to £15.80 the [rate of] charge goes up by 30%. We don’t have any extra charges.”

But London cabs have taken change in their stride before. For example, it has been many years since “black cabs” were uniformly black—now a rainbow of colors ply London’s streets. And while the Austin FX4, the model most people associate with London cabs, was in production from 1958 to 1997, LTI has produced three further models since its demise, albeit retaining much of the look of the FX4, while two different versions of Metrocab are still in use. And a new emissions-free “green” black cab, made by a consortium formed by Intelligent Energy, Lotus Engineering, LTI Vehicles and TRW Conekt, with funding from the U.K. Government’s Technology Strategy Board, called the Fuel Cell Black Cab is to be introduced into the market gradually to ensure that all London cabs have zero-exhaust emissions by 2020.

But while they are in the throes of challenge and change, London’s taxis still provide one of the world’s best services. A survey carried out by Hotels.com in May among 1,900 travelers around the world, found 59% of travelers said the London cab offered the best service, followed by New York and Tokyo. Respondents said London drivers were knowledgeable and the nicest on the planet.

Taken from the Wall Street Journal

5 Responses to “Merc Vito’s up against TX Cabs”

  1. Simco says:

    “London cab offered the best service”

    As it says, THE BEST !


  2. Paul says:

    The minicab driver is paying for john griffin. He doesn’t seem to realise this. Licenced taxi drivers will always be superior as they aren’t subsidising the likes of griffin . You meet plenty of black cab drivers with years of experience; far less common with minicabs

  3. chauffeur man says:

    People identify with the Black cab it’s one of the things people think about when they imagine London. To diminish it’s uniqueness or slowly phase it out would be a bad move and one which would affect the character of London.

  4. London Cabbie says:

    Mini scabs suffer from many things like not knowing where they are or where they are going, to not being able to speak much if any English!

    Black Cab Drivers offer a far superior service!

    Afterall, it is called The Knowledge!

  5. Alethea says:

    This is my first time pay a visit at here and i am
    actually pleassant to read everthing at one place.

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