Business upstart sees the good times roll with GPS
As the row over the mandatory introduction of GPS technology in the taxi industry enters its end game, the brand new Bermuda Central Dispatch Corporation (BCDC) - formed to provide an integrated dispatch service for the whole Island - is gearing up for what may be a gruelling battle for market dominance.
Once the much disputed computerised dispatch bill becomes law, just two companies - Radio Cabs and BCDC - will be left standing.
And because of the Island's size, only one is likely to survive after the initial two year period.
BCDC and entrepreneur George Scott are both depending on the success of Transport Minister Ewart Brown's effort to modernise the taxi industry with a computerised dispatching system.
And BCDC, like Dr. Brown's initiative, is also depending on the acceptance of the industry's key players for its own survival.
Unlike Radio Cabs, BCDC is offering shares to taxi operators drivers and the existing dispatchers.
The company has its detractors, not least of which is the Island's leading dispatching service Radio Cabs which has refused outright to get involved in the venture.
Radio Cabs owner Edward Darrell has dropped his opposition to the GPS technology but is willing to purchase a computerised dispatching system for his company.
He has also been pushing for Government to resume enforcement of mandatory two-way radios in all taxis.
That, said Junior de Silva, one of BCDC's 13 directors, is a attempting to keep his share of the market.
“Radio Cabs is asking for protection - because they have 66 percent of those cars presently on radios. If I had 66 percent of the drivers on radios I would ask for protection too.”
Mr. de Silva says that BCDC will hit the ground running as soon as the legislation is passed. Forty percent of its capital is already in place as are agreements with Mr. Scott's company, Advanced Tech Solutions, which will be the local vendor of the computerised dispatching technology, and letters of intent with local and overseas suppliers.
Over 10,000 of the companies 12,000 shares are being reserved for taxi permit holders with the rest being kept for taxi leaseholders and dispatch companies.
So far BCDC has managed to entice the smaller dispatchers into becoming shareholders, but between them they account for only about 100 taxis.
According to Mr. de Silva some 300 taxi drivers have indicated an interest in buying shares in the company but are adopting a “wait and see” attitude in view of ongoing discussions between the Bermuda Taxi Operators Association (BTOA) and Government.
If that's true, some taxi operators are playing both sides - Mr. Darrell said that his company has surveyed its 420 taxi operators and found that three quarters of his subscribers will not get involved in BCDC. There are only about 600 taxis in the industry.
He also pointed out that the other dispatchers do not operate on a 24-hour basis. And he said he doubted whether the dispatchers would invest in a brand new company that's “not making any money”.
A better way to go would be to merge the dispatchers and have each company own a share proportionate to their market share.
He told The Royal Gazette that he suspected some “foul play” had taken place. “If someone already has a certain dispatch company and the legislation is not put in place yet, that's kind of dangerous,” Mr. Darrell said.
“Why would someone invest in something when the Minister hasn't passed it yet ? It doesn't look logical that this equipment is here if the legislation is not here yet. Nobody invests a million dollars on a whim and a guess.”
To be sure, while some of the key people have strong connections with the ruling party, the man who started it all had the idea way back in 1994.
His plans initially involved having a fleet of some 200 cars - all using computerised dispatch technology.
Mr. Scott, a former Progressive Labour Party (PLP) candidate has invested “a good five figures” in his company which is poised to supply the technology that he says will bring the industry out of the dark ages.
Other shareholders are reported to be political commentator Rolfe Commissiong and Murray Brown.
Mr. Scott, who sold his taxi permit to raise capital for the venture, is not dependent on the taxi industry alone. His equipment has other applications besides taxis.
Effectively, Advanced Tech Solutions will act as the vendor for the system - supplying the hardware and software, while BCDC, its primary customer, plans to be the Island's main dispatcher.
Mr. De Silva is undeterred by the prospect of competing with an established industry giant. “I don't think the four companies can adequately afford a computerised dispatching system - everybody will be going broke.” Ideally, he says, the companies should merge “in the interest of the industry”.
BCDC will hold shares for the dispatchers for a year after it starts operating.
An industry-wide merger might happen anyway in the interest of business survival. Mr. De Silva says that a study has already “clearly indicated that four computer dispatch companies would not be financially feasible” on an Island this size.
Market forces will favour BCDC, he predicted. “When the dust settles, taxi drivers will do what's right.”
