HOW YOUR TAXI FLEET CAN EMERGE FROM COVID-19 STRONGER THAN EVER
The Covid-19 pandemic has created huge challenges for the UK economy. Although it’s too early to tell what the final conse- quences will be, it’s clear that the impact on businesses, their employees and the self-employed will be profound.
For the taxi sector, the outlook is challenging. The measures taken by the government to restrict normal business and leisure activities, and travel in particular, pose an existential threat to taxi companies. For a sector normal- ly dedicated to keeping people and business moving, the prospect of empty streets and a nation in lockdown seems a bleak one.
However, the taxi sector is made of stern stuff. As the specialist provider of card pay- ment processing services for taxi fleets and their drivers, at CabCard we know that our customers are ready for the challenge. It has been extremely encouraging, as we have spoken to fleets and drivers over the past weeks, to hear how taxi businesses all over the country are facing up to the challenge.
THE FOURTH EMERGENCY SERVICE
The smartest fleet operators have recog- nised that they have a crucial role to play in helping to beat the pandemic. When public transport services are cut back and the pub- lic is urged not to travel, who is there to get essential NHS workers to the hospitals? With the elderly and vulnerable asked to remain at home and supermarket delivery services stretched beyond breaking point, who is there to ensure that food, medicine and other essentials are delivered where they are needed? Who can collect shopping and prescriptions for disabled customers? When restaurant businesses need to start offering a new delivery service at the drop of a hat, who can bridge the gap between the kitchen and the customer, ensuring the restaurant can stay afloat?
For all of these requirements and more, taxi businesses are there, living up to their moniker “the fourth emergency service”.
AN OPPORTUNITY TO BUILD DEEP TRUST
But taxi fleets and their drivers aren’t just providing a crucial service at a difficult time. The savviest fleets have understood that this is a moment of huge opportunity. After years of David-and-Goliath battles with multi-national ride-sharing apps such as Uber, Ola, Bolt and others, Covid-19 has changed the national conversation. For the first time in years, communities are looking around and offering a helping hand. There is a moment of opportunity for taxi fleets to build a deep layer of trust with people, busi- nesses and public authorities that will be rewarded for many years to come.
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Your fleet has some amazing infrastructure: a network of drivers and vehicles, sophisti- cated dispatch software, a phone system manned by friendly local experts. Look for creative ways to offer help and support to people in your community using the tools in your hands. Then, tell those stories. Talk to your drivers and ask them about the people they have helped. Contact your radio station or local newspaper. Post in local Facebook groups. Give your call centre staff some new prompts for all callers such as simply asking: “do you need anything? What can I help you with?” Above all, be human, be open and show your community spirit.
At CabCard, we’ve received a number of requests from taxi fleets who are embracing this approach. For example, we’ve provided contactless card payment terminals to fleets who want to ensure their drivers are safe and protected by avoiding handling cash. UK Finance has responded to the crisis by raising the maximum limit for contactless card payments from £30 to £45 with effect from the 1st April. This will have a huge impact on taxi fleets both immediately and over the long term, since consumers will become even more accustomed to paying by the convenience of contactless.
If you’re taking a creative approach to busi- ness and offering things like home delivery services, your drivers will need to take card payments, as any customers who are self- isolating will not have access to cash, while many ATMs will be unavailable due to shop closures or the unavailability of those work- ers who keep them replenished and maintained. CabCard can help you by pro- viding a simple, secure card payment terminal for every driver.
ENSURING BUSINESS SURVIVAL
As legendary investor Warren Buffett said, “Only when the tide goes out do you discover who's been swimming naked.” The average small business has just 27 days of cash buffer available to it. It’s therefore urgent to reduce costs, avoid losses and invest in growth.
This is the moment to streamline your opera- tions. At CabCard, we have helped many taxi fleets to reduce administration costs by ensuring driver card payments are made directly to drivers, with no need for a reconcil- iation process. With your drivers paid directly to their bank accounts, staff who would ordi-
narily spend time reconciling transactions and making payments can work on revenue-gen- erating activities. You’ll also save money on bank fees.
You should also look to avoid losses where possible. In financially distressed times, card- holders are sometimes tempted to disingenuously use their card issuer’s charge- back facility to recoup some funds. If you accept bookings (for example on a taxi book- ing app or web booker) in a cardholder-not-present manner, you are leav- ing your company open to the possibility of huge levels of chargeback fraud. When card- holders claim not to recognise a charge in this way, or they dispute a charge for some other reason, it can be extremely difficult for mer- chants (such as taxi fleets) to defend themselves against the chargeback, and funds can be debited from their balance immediately. For taxi fleets, this has a triple- whammy effect: the cost of the chargeback, the funds which must be paid (and may have already been paid) to a driver, and the chargeback administration fee (usually around £20). At an already difficult time, the challenge of spurious chargebacks can have a crippling effect on a fleet’s cashflow situation.
At CabCard, our advice is simple: in-vehicle card payments offer the security of Chip & PIN or contactless payments (based on the secure EMV standard) to protect your fleet, your driver and your cardholder. Many of Cab- Card’s fleet customers have chosen to disable the option for customers to pay by card via their dispatch system’s booking app or web booker, instead allowing all customers to pay quickly and conveniently at the end of the journey using a CabCard payment terminal for every driver.
Finally, we recommend that all fleets look to reduce their direct costs. Transaction fees are an obvious way to do this. At CabCard, we have been able to reduce card payment pro- cessing fees for some fleets by as much as 60%, while saving them money by reducing administrative overhead and eliminating chargebacks too.
In summary, Covid-19 brings challenges but also huge opportunities. We believe that the taxi sector will emerge stronger from this cri- sis, and the smartest fleets are already taking steps to ensure that they not only survive it, but that they thrive because of it.
If you need advice on your business’ opera- tion, please contact our experienced and friendly team, who will offer guidance and share best practice from across the industry.
Article supplied by:
Cabcard Services 0203 9555 400
www.cabcard.services
APRIL 2020
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