Uncharted Territory

August 28, 2012

MonopolyWatch: Thames Water’s Counting Difficulties

Our vision: If customers had a choice, they would choose Thames Water.
– signoff on email from Do.Not.Reply@thameswater.co.uk.

I don’t know why that quote creases me up, since it expresses a very sensible aspiration. Maybe it’s because it could be so easily adapted: “Our vision: If voters had a choice, they would vote National Socialist/Communist/United Russia [delete as applicable]”. Or maybe it’s just my sense of humour.

I’ve recently had to move home, so am experiencing no end of hassle, in large part in dealing with various utilities and suppliers. This has led me to formulate a hypothesis: the level of incompetence of an organisation is directly correlated with the extent of its monopoly.

So, as an aside within this inaugural MonopolyWatch newsletter, perhaps US car rental customers should start to worry with Reuters reporting that:

“Hertz Global Holdings [has] agreed to buy rival Dollar Thrifty Automotive Group for about $2.3 billion in a deal that puts about 95 percent of the U.S. car rental market in the hands of three companies.”

Why do we allow takeovers, such as of Dollar Thrifty by Hertz? Do we really believe that 3 choices is enough to ensure healthy competition throughout the entire US? It seems to me that in most markets the presence of at least 10 suppliers is necessary to provide sufficient consumer choice and drive continual quality and feature improvements and cost reductions. Surely “consolidation” across industries such as car rental is driven almost entirely by large organisations seeking to achieve a greater degree of monopoly power? So why don’t we – or at least our elected representatives and public officials responsible for the health of the overall economy – resist this process more strongly?

Back to Thames Water. They’re not the worst, but not far from it. Ealing Council, for example, have no rule for deciding who pays the Council Tax on the day you move. Or perhaps they do have a rule, but don’t understand it! Let me explain: you don’t move in or out at midnight, but Council Tax applies – and there seems to be little disagreement on this point – per calendar day, i.e. from midnight to midnight. In fact, likely you formally move some time around midday, let’s say at 11am on 16th August, for the sake of argument. So who pays the Council Tax for 16th August, the person moving out or the person moving in? Simple enough, you’d have thought. (For the record, I’d expect the rule to be along the lines of hotel room bookings, i.e. the person moving in on 16th pays the Council Tax for 16th, just as if you booked a hotel room for “the night of 16th” that would be the night starting on 16th and ending on 17th!).

How could Thames Water match this? Well, they make a clear distinction on their website between customers moving within their catchment area and those moving outside it:

Clearly, if moving out of Thames’ catchment area means you “need to close your account”, the implication is that moving within the catchment area keeps it open. They even ask you for a moving-in date to the new property. This makes some sense, since there may, as in my case, be an overlap, i.e. the rental for the new place started before the one for the old place ended. I don’t think it’s just me being pedantic: asking for information about where you are moving implies Thames are going to carry the account over, as, for example, Virgin Media do (more about those scum another time).

But whoever is moving out from the new property will also have told Thames you are moving in. Does Thames’ website sort this out in some intelligent manner, e.g. by overriding or matching the names provided by the previous resident at the new property? Seemingly not.

And does Thames’ website ask if you want to carry over your Direct Debit when you move? Nope.

So, after telling Thames where I was moving, I then received a letter inviting me to pay by Direct Debit. Has this resulted from me telling them I’ve moved or from the the landlord telling them I’ve moved in? No idea.

Do Thames reassure customers in any way that they will not be billed twice for the property they are moving to. No.

Is it actually possible I could even end up paying twice? Who knows?

Since I now have a new account number and have had to set up a new payment arrangement, is there any sense in which the account at my previous address has not been closed as if I’d moved out of Thames’ catchment area? Seemingly not.

Nevertheless, I dutifully went on line and set up a Direct Debit to Thames. This is where the tale really takes off. What day of the month did I want to pay on? I selected 15th. But when I went to the next screen the form showed 14th. So I pressed “Back”. Big mistake.

This screen-grab shows what I saw next:

Yeap, no “14”. So “15” is interpreted as 14th in the list, I guess.

Thinking maybe I’d inadvertently selected 14 instead of 15 the first time and that Thames’ had implemented a new form of drop-down list omitting the current selection, I selected 15 again. No dice: the next page still showed 14.

I decided to settle for paying on 14th. And guess what? That wasn’t the only problem with this one simple web page. No sirree. Even though all the data I’d entered – name, address, bank account etc – was showing on the screen, the software didn’t think it was there. I had to enter it all again.

On one level it is a bit odd having alternative gas and electricity suppliers all selling an identical product, coming along the same pipes or wires. Given no differences in what is supplied, one should expect little difference in prices. But at least you can choose energy suppliers that are competent in handling the billing process. Why not allow the same for water?

January 20, 2010

Parking Paralysis (and Housing Horror)

As we head towards what promises to be a fascinating General Election, the absurd first past the post system has ensured the parties are united in their zeal to pander to Middle England. And Middle England, it seems, is consumed with localist fervour.

What is localism, anyway?

The politicians would have you believe that the first stop on the road to true democracy is to “empower communities”. That is, they assert the moral right of the current residents of a given area to make a broad range of decisions without reference to the general interest.

The idea that the primary unit of a complex modern society is a “community” of people living near one another is, of course, absurd. In fact, our personal networks – including families – are, in general, becoming more and more geographically dispersed. We have little in common with most of our neighbours, other than the area where we live.

Harking back to an outmoded idea of the community masks what is really going on. What’s really happening is that the political process is becoming more and more skewed towards vested interests and against the general interest.

Take housing, for example. This morning I heard the Housing Minister, John Healey, on the Today programme, promising to clamp down on “garden-grabbing”.

Let’s put to one side the fact that John Prescott was right: we need to increase housing density. Labour has caved in on this principle as the Tories have gradually captured local government. But below a certain threshold of population density local shops are not economically viable; nor is public transport. Pretty soon everyone’s driving to Tesco’s. And the same nauseating nimbys who prevented “overdevelopment” are complaining about the loss of local shops and whinging about “Tesco towns”.

I consider it absolutely ridiculous that I’m in London Transport Zone 3, but 10 minutes walk from a pint of milk and a newspaper. If there were a few more flats nearby and perhaps fewer large private gardens, maybe there’d be enough people in walking distance to sustain a local corner-shop. If it could get planning permission.

Let’s ignore the “community” narrative and instead consider what’s really happening with the “clamp-down” on “garden-grabbing”. What John Healey is really doing is strengthening the rights of neighbours over the owners or prospective owners of property – despite the fact that the size of gardens has marginal impact on neighbouring properties, or, for that matter, their value. If they reduce the size of a garden, those bogey-men, the developers, are not simply being bloody-minded. The market is telling them that the land has less value as a garden than as building. If the opposite was the case they’d increase the size of gardens.

Obviously, the reason why “building” is more highly valued than “garden” could have something to do with the lack of available housing in many parts of the UK. But clearly our leaders don’t see this isn’t a good enough basis for a decision. The visceral feelings of neighbours are obviously far more important.

A few weeks ago Secretary of State John Denham rejected plans for a development near Ealing Broadway station. He acknowledged that the proposed “scheme would comply with some specific development plan policies relating to the regeneration of Ealing Town Centre and would bring many benefits to the area”, including 567 homes, but judged that all this value was outweighed by his subjective judgement (in response to local concerns) that “the bulk, massing and certain aspects of the design of the scheme would be inappropriate in its surroundings. It would fail to preserve or enhance the character and appearance of the Town Centre conservation area and the setting of the Haven Green conservation area, as well as harming the setting of the Grade II* listed Church of Christ the Saviour.” One person’s fears about their “visual amenity” (an irritating phrase repeated ad nauseam in planning documents) trumps another’s need for somewhere to live.

Look, Haven Green is a mess. It’s simply not that pleasant a place. It could conceivably be improved by removing the buses which stop and indeed park (for driver breaks, I gather) on the diagonal road across the Green. A recent Ealing Council document (pdf) noted that: “A major consideration, as part of both the Crossrail and Arcadia redevelopment proposals, is the provision of better interchange with local bus services.” But Arcadia is not going ahead, and, if I understand the document correctly, Crossrail has no budget to pay for a proper bus station.

The planning process is bad enough, but nowhere is localism more evident than in the battle for control of scarce road space.

Ealing Council, to my horror, is also consulting on a dreaded CPZ (controlled parking zone), which would affect me.

OK, the proliferation of CPZs can be largely explained in terms of local government bureaucrat empire-building, but there is clearly at least enough tacit public approval to allow them to get away with it. Let’s therefore consider the CPZ in my novel terms of the “local” (or “vested”) interest and the “general” interest.

Before a CPZ is implemented in a given street, everyone has an equal right to park there. After its implementation, car-owning residents generally have absolute priority. In fact, often the schemes are implemented with the shocking inefficiency that non-residents can’t even use the space when it is unoccupied! (Schemes variously allocate a few metered bays or, better, allow metered parking albeit for limited periods and at limited times in residents’ bays).

So, in approving a CPZ, residents in effect extend their property a couple of metres into the road in one fell swoop!

Do they pay a fair price for this asset, though?

Of course they don’t.

Permits for residents’ parking on public roads are often less than £100 per year, and rarely more than a few £100s. The market value of such parking – determined by the rates in the few metered bays typically provided or in nearby car-parks – is usually at least several pounds a day – £1000s, not £100s a year.

It’s not just outsiders who, in effect, subsidise permit-holders. Residents who don’t run cars are massively inconvenienced, as is everyone when they have visitors, or use local services. Estate agents, for example, have problems parking when they quite legitimately want to show properties to prospective purchasers or tenants.

What CPZ schemes fail to take account of is that residents’ cars are part of the problem, and not the only injured party. Personally, it seems to me that there would be more social utility in reserving parking places for estate agents than for residents who just want to leave half a tonne of steel and moulded plastic outside their house for 6 1/2 days a week.

If we’re going to have CPZ schemes, then, let’s charge a market rate for the parking space – upwards of £1000 a year (and allow the option of paying a daily rate for those residents who park their car elsewhere most of the time). Then we’d reduce car ownership, spaces could be allocated to car clubs and for visitors and our parking problems would be much reduced.

What Ealing really wants, though, is not an ever-growing CPZ area. What’s happened is they’ve tried to solve the problem of commuters parking near Ealing Broadway and West Ealing stations. Entirely predictably, the small CPZs implemented have just moved the problem. Now they’re consulting on more CPZs. Nice work, if you’re in the CPZ implementation business.

Is there another policy that might make more sense than the inefficiency of selling the public parking space asset at a discounted rate to residents who think they own “their” road? It is entirely legitimate to discourage car rather than bus or shoe-leather use by commuters. Why not, therefore, consider a congestion-charge scheme for non-residents coming into the centre of Ealing? One might hope that some of the London congestion-charge infrastructure could be fairly cheaply deployed just in the centre of Ealing. I’d suggest vehicles entering and leaving are monitored and the software programmed to charge only for those non-residents who stay in the area more than, say, an hour, since the objective in this case is not to penalise through-traffic but relieve pressure on on-street parking.

Perhaps it will take PR to slow the tide of localism. Certainly though, until the political process weighs the general interest more carefully against vested interests, our society will continue to be held back by dysfunctional and misguided decisions.

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