The largest provider of red light camera and speed camera services in the US admitted yesterday that public opposition has begun to affect the bottom line. In an announcement to the Australian Securities Exchange (ASX), Melbourne-based Redflex Traffic Systems reported a nine percent drop in net profit for the year ended June 30, 2009. This has come about in part as motorists increasingly refuse to pay automated fines and use public pressure to force cities to eliminate photo enforcement programs. “We have been adversely affected by reduced collection rates on some of our US contracts, write-downs on several contracts that have not been renewed, extended start-up difficulties with a major state-wide speed contract in Arizona and costs in dealing with litigation and legislative issues,” a Redflex statement explained. “These and other factors have affected profitability for the year.”
Reduced collections have cost the company A$2.2 million this year. Motorists in Arizona and Virginia, for example, have become increasingly aware that they may throw away any automated camera ticket received in the mail. Both states require personal service for any citation to be valid. To offset this loss, Redflex added another 394 red light cameras and speed cameras in the US market. This helped increase the amount of money extracted from American motorists by 61 percent to $114,543,000 this year — despite the net decrease in profit over the previous year.
Of all its contracts, the Arizona photo enforcement contract has proved the most problematic as intense public protest forced lawmakers to limit speed camera deployment. Redflex has lost $2.3 million on this contract to date.
“The program has encountered a number of difficulties,” Redflex explained. “Despite initial expectations of installing 40 mobile and 60 fixed units, the installations have been held to 40 mobile and 36 fixed at this stage. We are hopeful of installing the additional 24 systems in the future but do not have a committed timeframe at this stage. Initially, deployments of the mobile units were limited in time and were constrained to less than ideal locations.”
Those additional deployments may never happen as the group CameraFraud.com continues to collect signatures for a statewide initiative that would ban all photo ticketing. Arizona is not the only jurisdiction where Redflex faces trouble.
Redflex boasted that it had signed 49 new ticketing contracts, but the list provided to investors was somewhat deceptive. Among the “new contract” cities, Redflex counted Sulphur, Louisiana and Heath, Ohio. In April, a stunning 86 percent of voters ordered the camera program to be shut down. Heath voters will have the same opportunity in November after a group of citizens gathered signatures to force a referendum. So far, the write downs on closed contracts cost the company $1.6 million. Redflex also highlighted its contract renewal with Santa Ana, California even though a Superior Court judge has ruled that the Redflex program is “illegal and void” (view ruling).
The legal troubles do not end with motorists fighting photo ticketing. In fact, Redflex is involved in litigation with other photo enforcement companies. So far this year, that suit has cost Redflex $815,000. A failed attempt to entice investors to buy out Redflex cost another $438,000.
The biggest loss in future earnings potential has come as a number of states shut the door on photo ticketing in 2009. After the legislatures in Maine, Mississippi andMontana acted, Redflex had to pull the plug on a number of planned red light camera and speed camera programs.
Geez, I hope that this business won’t get bailed out.
Saw on the interwebs that a group in Ohio (Toledo?) just had a petition referendum shot down on a technicality. Hope they get that fixed and throw the bums out.
Redflex and their ilk can FOAD.
I hope they rot in hell.
This nonsense is big-brother-ism at its worst, and any company that attempts to enable such an invasive practice should go out of business.
Whaaaaat???? American drivers’ don’t like getting speeding tickets? Captain obvious strikes again.
It seem that Redflex has run into a fundamental rule of economics that if your product is unpopular, even despised, you aren’t likely to be a viable business for long. They deserve no better fate than extinction.
It completely baffles me that people (sheeple?) in the UK, Europe and Australia put up with this crap.
Very glad I live in Maine where we don’t put up with this BS. We also voted out emissions testing many years ago.
Everyone who gets a photo ticket should take it to court. Call the operator as a witness, request the timing or red light sync data. If every ticket took up the court’s time and money they will go away.
Twotone
good.
If speed limits were by an d large reasonable in this country, I might not mind the use of these things, especially since they don’t result in points. But they are not. As for red light cameras, the history of short yellows speaks for itself.
I also agree strongly with someone who pointed out that when ticketing financially benefits the municipalities who do the ticketing, there is a conflict of interest between justice and revenue raising.
Having lived a number of years in Oz, I saw first hand how much the police and government there love their little cash making machines.
In Perth, one time a citizen stood on the side of the road with a sign “Supernova ahead”. A supernova is a hidden portable speeding camera. Half the police department was there in minutes. They arrested him and tried to convict him of interfering with the police. They treated him like he was Osama bin Laden or something. They claimed he was obstructing traffic (he wasn’t).
The irony was not lost on me or my coworkers. If we had called for a rape or break in, the police would never have responded as fast or with such force.
The speed camera co executives and politicians that make deals with them should be convicted of thievery and locked up with 300# starved sex offenders.
If Redflex looked like going under (they don’t) then it would make quite a lot of sense for the Australian governement to bail them out, as siphoning off US taxpayer’s cash to Australia is a net positive.
It is also fair recompense for the lousy military contracts that the USA fail to deliver on (Seasprite) or come in very late and under deliver (Wedgetail, Collins Combat System).
Just means that Australia will get more “$afety Camera$” because we care about our koalas!