COMPUTERIZED DISPATCH

CENTRAL DISPATCH, WHAT’S IT ALL ABOUT?

by Don McCurdy

Recently, I was contacted regarding the possibility of a country's government assuming the role of dispatch service and what my opinions on such a venture might be. While I do believe that there are some things government can do better than private industry, like provide for the common defense, there are many areas private industry can manage better. That aside, this month we'll look at some of the pros and cons of central dispatch, whoever the provider might be.

Central Dispatch

Defined, at least in my opinion, central dispatch would be a single point of contact for all taxicab service. Australia has some of the best examples of consolidated dispatching that I've encountered. Though still privately owned and operated, Black Cabs Combined of Melbourne is the largest "central dispatch" system I've seen.

They dispatch for several companies, some all the time and others during off peak hours. If a cab from the requested company is not readily available a cab from one of the other fleets is sent in its place. This does lead to faster overall response time, but does present some issues such as what is the taxi company's role in the grand scheme of things.

Companies spend an awful lot of time and money attempting to gain a competitive advantage. Where would central dispatch leave us in that quest for a competitive advantage? It is my opinion that central dispatch would remove the opportunity for companies to gain an advantage through individual superior technology.

Cab Companies, why?

Historically, one of the primary roles of a taxicab company was the dispatching service they provided. Generally speaking, the larger the cab company the better the opportunity would be to provide citywide service.

Theoretically, a company of 100 cabs would be able to provide better coverage than 10 companies of 10 cabs. That would seem to be the strongest point for the concept of central dispatch.

The next logical question would seem to be "why do you need taxi companies?" With the company's primary role being removed (dispatching) what would be the purpose of the taxicab company?

It would appear that taxi companies would then become an unnecessary middleman between the dispatch service and the drivers. Yes, there is always insurance, training and administrative functions, but the same arguments that apply to central dispatch would apply to consolidated purchasing of insurance, single source training and one administrative entity. If the government took on these responsibilities the argument could be made that between administration and regulation that the taxicab drivers would become municipal employees.

Pros

The foremost argument for central dispatch would be an improvement of service due to the increased size of the available pool of taxicabs. While this argument is theoretically true there are some variables than may negate any potential advantages. The Sydney, Australia situation jumps to mind.

Traditionally, drivers in Sydney are given the entire pickup address and destination of the passenger prior to accepting a trip. This scenario allows the driver to select only the calls that are going a sufficient distance to inspire them to accept the trip. The local regulatory authorities issued a ruling declaring the destination would not be allowed in the trip offer. After a test period, during which the drivers protested vehemently, the regulators relented and restored destinations in the trip offer.

Would regulators, working for politicians, be willing to withstand the heated and vocal complaints of the drivers to maintain a high service level? My experience has been that drivers will complain of any changes, regardless of the improvement in service and business volume they may provide.

Another argument for central dispatch, from a municipality's point of view, would be revenue generation. Since the municipality would now be providing the dispatch service couldn't they reasonably expect to receive the revenue that the taxi companies had been receiving to provide the dispatch service?

Cons

The foremost argument I would make against central dispatch would be the elimination of competition. Competition between companies has driven the technological improvements the industry has initiated. Taxi company professionals have assisted in the development of the vast majority of the computerized improvements the industry has achieved. Removing their years of experience and considerable expertise would stagnate the industry. What would be the point of expensive software and hardware improvements if there was no competitive advantage to be accomplished?

In conclusion, I will say that there is considerable room for improvement in most local industries, but central dispatch does not appear to me to be the solution.

Local industries tend to develop their own culture, which sometimes must be overcome to improve service. Practical regulations could potentially improve the service level, but again my experience has been that well meaning regulations do little beyond costing the industry money. Well meaning, but inexperienced, regulators often come up with fantastic appearing "improvements" in regulations that have little or no effect.

Service improvement is driven by a company's desire to survive more than anything else. While some regulation enables inefficient companies to survive, others simply do nothing. A complete study of the local culture by outside, experienced industry professionals can get results. However, the company and or city must be willing to accept new ideas. Often they are not.

I have been hired on numerous occasions to consult on potential service improvements but was totally ineffective due to the level of entrenched local culture. "Well, yeah, we want to provide better service, but we don't want to change anything." And so it goes.

 —dmc

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