Guest post by Rod Bogaards: Opportunity lost for Personalised Transport Review

The long-awaited Green Paper for the Personalised Transport Review (aka the Uber Review) has been released. The trouble is, as highlighted by Gene Tunny in a previous post, the Green Paper provides almost no analysis to objectively assess the most appropriate regulatory and policy framework for personalised transport in Queensland.

Four major options are presented in the Green Paper:

  • Option 1: Do nothing.
  • Option 2: Legalise ridesharing in south east Queensland with hailing and cab ranks restricted to taxis.
  • Option 3: Legalise ridesharing across Queensland with hailing and cab ranks restricted to taxis.
  • Option 4: Deregulate with a safety-focused accreditation scheme.

These options and related discussion are, for the most part, constructed on the premise that the Government is best placed to determine the future of personalised transport in Queensland, rather than establishing a least-cost regulatory framework and letting consumers decide. There is insufficient recognition that increasing competition will obviate the need for much ‘command and control’ regulation.

Scant attention is also paid to identifying the nature of the policy problems or the objectives of government regulatory action. As a result, the Green Paper is a ‘brainstorm’ of ideas, from legalising ridesharing in the south east corner but retaining the taxi monopoly for the rest of Queensland, to mandating vehicle signage or deciding whether or not taxi drivers should have to wear seatbelts.

The Green Paper uses an opaque form of multi-criteria analysis (MCA)(a fancy name for ranking) to evaluate options using the Final Guiding Principles (Accessible, Accountable, Customer focused, Innovative and Safe) as the assessment criteria.

In a standard MCA each policy option is given a score for each criterion and these are weighted and summed to give an overall score. But as Dobes and Bennett argue, MCA is flawed and a poor substitute for cost-benefit analysis. While MCA avoids the challenge of quantifying dollar values for positive or negative impacts, it does implicitly assign values (in this case, by assigning arbitrary values to the guiding principles, which is not the same as determining whether Queenslanders are actually better off).

Moreover, the MCA in the Green Paper does not even attempt to weight the criteria and score options, instead it makes a purely subjective assessment. The Review Taskforce concludes all options either ‘satisfactorily’ or ‘strongly meet all of the principles’. This leads to the implausible conclusion that Queenslanders could be better off by maintaining the status quo, and the similarly fanciful conclusion that the Government could choose any of the other three options and the community would be equally better off.

This approach allows maximum flexibility for the Review Taskforce to recommend any of the reform options without testing the evidence on impacts, or providing an opportunity to identify unanticipated consequences, or any better options. By not consulting on an objective evidentiary base, it is also a lost opportunity to increase acceptance and understanding by interested parties of the option ultimately recommended in the forthcoming White Paper.

The Green Paper does raise a number of interesting policy issues, such as improving transport options for people with a disability by reforming the government subsidy scheme. However, it fails overall by not identifying, in either a qualitative or quantitative sense, the costs or benefits of the individual reform options.

Instead, Queensland consumers are looking down the barrel of a significant regulatory decision being based on limited analysis. Let’s hope the White Paper manages to find an option that provides the greatest net benefit to the community.

Rod Bogaards is an economist and former Director of the Productivity Commission.

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2 Responses to Guest post by Rod Bogaards: Opportunity lost for Personalised Transport Review

  1. John Craig says:

    Gene

    This is great to see. Another serious analysis of policy issues.

    And today’s Sunday Mail there was another one Economic Reform Can’t Wait: Politicians have to think beyond elections for sake of nation ( which needless to say I believe could be considerably improved).

    With more of these we could actually see irresistible pressure for public debate about real issues which I have waited 45 years to see. Under Joh’s regime policy debate was limited to ‘don’t you worry about that’. His late 1980s successors’ (LNP) regime tried then-trendy economic things with no understanding of what they really meant or any idea how to make them work. Goss’s regime tried to do the same trendy things and failed because they were driven by punishing public servants for the problems that the unrealistic Whitlam administration had experienced in the 1970s. The Borbidge regime had no idea at all what to do. The Beattie regime decided that, even though it did not know what to do, it was going to do so anyway (and ran up huge bills). The Bligh regime struggle to deal with the consequences. The Newman regime wrongly believed that it knew what to do and did it in ways that upset a lot of people. The Palaszczuk regime clearly has no idea what to do.

    In all this time, serious analysis of policy issues that might create an informed electorate and political system has never existed. Who know what is possible now.

    Regards

    John Craig

    • Gene Tunny says:

      Many thanks for the comment, John. I was particularly disappointed with the Varghese review given the time and resources they were given to do it. Your characterisation of recent administrations is amusing and disturbingly accurate.

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