Milan taxi drivers protest against increase in licences

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In January 2003, taxi drivers in Milan staged a series of protests against the city council’s plan to increase the number of cab licences. The regional and provincial governments intervened in the dispute in an attempt to find a solution. The Guarantee Commission which oversees application of the law on strikes in essential public services also started a procedure to assess whether these rules had been breached. In February, taxi drivers' representatives and the Milan provincial government reached a deal on the dispute.

During January 2003, taxi drivers in Milan staged a series of protests against the city council’s plan to issue 500 new cab licences, in addition to the approximately 4,500 currently in use. According to the mayor of Milan, Gabriele Albertini, this measure should help remedy a situation of chronic shortage in supply of taxis.

City council’s initiative

An idea of the taxi situation in Italy, and in Milan in particular, can be gained from the following figures. London (7.2 million inhabitants) has 19,200 taxis, with a ratio of one taxi for every 387 inhabitants. In Paris (10 million inhabitants) the ratio is one taxi for every 414 inhabitants. In Berlin (3.4 million inhabitants) there are around 4,000 taxis in service, one for every 846 inhabitants. There are more than 6,000 taxis in Rome, one for every 448 inhabitants; and 1,520 in Turin, one for every 630 inhabitants. Milan has 4,571 taxis: the ratio to the municipality’s population is one taxi for every 287, but when calculated according to the entire metropolitan area, it is one for every 1,094 inhabitants.

It was this last figure that prompted the mayor of Milan’s initiative - which got under way in spring 2002 - to issue (after a 20-year freeze) 500 new cab licences. Besides emphasising the small number of taxi drivers, the mayor pointed out that they were badly distributed, so that there was a serious shortage of taxis at two crucial times of day: from 07.00 to 09.00 and from 18.00 to 19.00.

The Milan taxi drivers were harshly critical of the mayor’s initiative, declaring that they would not accept it, in particular because of its unilateral nature and because they had not been consulted. In order to protest against the issue the new licences, the taxi drivers set up a coordinating body named Categoria Unita, which comprises 16 organisations and unites the relevant artisanal (small crafts business) associations and cooperatives' associations and the three taxi drivers' organisations belonging to the major trade union confederations - the General Confederation of Italian Workers (Confederazione Generale Italiana del Lavoro, Cgil), the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacato Lavoratori, Cisl) and the Union of Italian Workers (Unione Italiana del Lavoro, Uil).

The taxi drivers’ organisations claim that increasing the number of licences is not a solution to the increasingly severe problems that afflict Milan’s public transport system: intolerable traffic congestion, a lack of parking spaces, and an insufficient number of priority traffic lanes. The organisations also stressed the effect of increasing the number of taxi drivers on the economic value of the licences. Drivers purchasing a licence in the last four years in Milan have had to make an investment of between EUR 100,000 and EUR 130,000, and the issue of 500 new licences would cause the old ones to depreciate in value immediately. The taxi drivers therefore demanded that any solution proposed should contain compensation for this economic loss.

In order to carry its plan forward against the protests of the taxi drivers, the municipality invited the city’s residents to express their opinion on the issue by contacting a freephone number, a fax number, or an e-mail address. Around 31,100 people took part in the poll, and the majority of them (65%) said that they were in favour of increasing the number of taxis.

Regional government intervention and protests

The Lombardy regional government sought to mediate between the two sides by proposing, at the end of January 2003, a resolution which provided for the immediate issue of 300 licences - 287 in the province of Milan, 13 in the province of Varese, and three in the province of Bergamo. The proposed resolution also reformulated the criteria for the award of licences, stipulating three requirements for participation in the public competition for them. Applicants must be: a) aged 55 or under; b) in possession of a driving licence; and c) in possession of a specific certificate which enables the holder to perform the profession of taxi driver. The new rules also established a uniform regional tariff, and the obligation to guarantee a pre-determined percentage of taxis in circulation at all times of the day.

The regional government’s resolution provoked a harsh reaction by the taxi drivers, culminating in a strike and in 'go-slow' taxi convoys, held on 27 and 28 January, which paralysed Milan’s road network and were joined by taxi drivers from Varese and Bergamo.

Through the Categoria Unita coordination body, the taxi drivers asked that no new licences be issued without a 100-day monitoring period beforehand. They also proposed a change to the shift system which, according to the drivers’ representatives, would lead to a marked improvement in the service. The present 10-hour shifts should be replaced by experimental 12-hour ones with a break between them of at least three hours. In this way, taxis would be in circulation at times of the day when there is greatest demand for them. If these demands were not considered carefully, the taxi drivers threatened that they would stage an indefinite strike.

Following the demonstrations by the taxi drivers, the Guarantee Commission for the application of the law on strikes in essential public services (Commissione di garanzia dell'attuazione della legge sullo sciopero nei servizi pubblici essenziali) (IT9802220F) intervened by beginning a procedure to assess whether the rules regulating industrial action in such services had been breached. It was concerned in particular with the obligation to give prior notice of strikes and guarantee 'welfare' transport services (for elderly, disabled and ill people). The municipality and the regional government invited the prefect of Milan to file a notification with the public prosecutors’ office that the regulations on strikes in essential public services had been breached by the taxi drivers’ demonstrations.

Agreement with the provincial government

Next to intervene in the difficult dispute was the provincial government of Milan, which is the body responsible for the issue of licences. It proposed a period of truce so that the situation and the shift system could be monitored. Following a meeting convened by the provincial government on 10 February, to which representatives of the municipality were not invited, the provincial government announced its intention to decide on the new licences only after due assessment had been made. The taxi drivers and the provincial administration agreed substantially on four points:

  • the setting up of a provincial consultative commission;
  • the creation of a technical panel which will determine methods to establish the demand/supply ratio and also set up a joint monitoring system;
  • the devising of a project to monitor demand by means of objective data furnished by telephone operators and radio taxi dispatchers; and
  • the design of further surveys with a view to creating a reliable database.

Commentary

The situation of the supply of taxi services in the major Italian cities is considered by many observers to be critical, given the chronic shortage compared with demand, especially in peak hours. The initiative by the mayor of Milan tries to find a solution to this problem. However, the number of licences represents only part of the story. The actual availability of taxis is influenced to a great extent by the structure of shifts and by the distribution of cabs, for instance between town centres and airports. The areas of regulation are many and can have a decisive impact on the levels of service.

The protest by the Milan taxi drivers stresses the high conflict potential of some categories of independent workers, such as taxi drivers, truck drivers, petrol station operators, pharmacists and farmers. The vulnerability of a society which relies more and more on services is not only due to dependent employees, but also to self-employed workers. In these cases, regulation is even more difficult: collective bargaining can operate only marginally and with limited effectiveness; besides, it is more difficult to control opportunistic behaviour.

The case of the Milan taxi drivers highlights some distinctive features of representation and conflict in these areas of the Italian economy. Taxi drivers are almost exclusively self-employed workers or members of cooperatives, within which, however, they maintain a high degree of autonomy. The situation is therefore one in which the employers’ associations representing the small taxi businesses and cooperatives and the unions protect the same interests. The opposite party in negotiations and the negotiating process also have distinctive characteristics, because the former consists of the authorities that regulate the local public transport system, and the latter concentrates on the contents of regulation, primarily the number of licences and fares. This is not real and proper bargaining, but rather a form of pressure applied on the political authority so that rules endorsed by the taxi drivers are approved.

Users are almost never directly represented in this relationship, for example through involvement of consumers' associations. The political authority may therefore find itself having to strike a balance between the potentially opposing interests of the taxi drivers, a homogeneous and well-organised group, and of users, a disorganised set of individuals. From this point of view, the initiative by the mayor of Milan to conduct a poll of the city’s inhabitants was an attempt, albeit one which met with only limited success, to give a voice to the party least represented at the negotiating table. In the case of the Milan taxi licences, moreover, the fragmentation of responsibilities among three levels of government has perhaps multiplied opportunities for the taxi drivers to apply pressure, and it has made the public authority’s regulatory role more complicated.

Another factor mediating between the interests of the taxi drivers and users is the regulation of the right to strike. In this case too, however, the absence of an employer and the sometimes unclear identification of the organisations responsible for strike action, as opposed to individual initiatives, complicates both the drawing up of self-regulation codes and the sanctioning of breaches.

In a situation such as this, the capacity for public regulation therefore appears crucial as a 'credible threat', among other things to foster the involvement of the taxi drivers’ organisations in the defining of rules, and to prevent opportunistic behaviour, which is particularly likely in the presence of institutional weaknesses. In the latter case, it is always possible that conflict will have a doubly negative outcome (especially for political leaders): protest by the taxi drivers, and hardship for the users hit by the strikes. (Diego Coletto and Roberto Pedersini, Fondazione Regionale Pietro Seveso)

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