INDUSTRY EXPERT REFLECTIONS
However, this industry is complex; we have in effect unsolicited and chaotic demand and unsolicited and chaotic supply. A broken-down train, some heavy showers, a football match can turn that chaos into complete turmoil. And yet the business model of self-employed drivers who want flexibility but also want to earn money, make it work. Managing drivers is an art not a science. The mistake that many people make and the government, the unions and the think tanks have made, is regulating or straightjacketing the supply side of this business. But without order on the demand side, there is only disappointment, lost business and ultimately failure. The short-term windfalls of compensation for holiday pay and enrolment in pension schemes and payment for being logged on when there is no demand, won’t compensate or substitute for a well-managed and reliable industry that can cope with the perturbations inherent in this sector.
An industry or a victim
Without apportioning blame or making a political point, this country is not in great shape financially; the world is uncertain and that makes running businesses difficult. Add financial challenges to a completely avoidable regulatory mess and you have the perfect storm. The private hire industry is worth £13 billion a year in fares alone so why do operators sit there doing nothing knowing that the worker status issue is wrecking their businesses? Successful industries should not be victims. Laws and regulations are meant to be beneficial otherwise why have them? Worker status is clearly wrong and damaging to this industry. The fact that only a relatively small number of companies have ended up in a tribunal should not give any one comfort.
You and your peers have altered the way you run your business, and not for the better, due to the threat of a worker status claim. Worker status has helped no one. The industry, since the second half of 2022, has been in gentle decline, masked to an extent by inflation which enabled long overdue fare increases. Fare increases have covered up the 1-2% per annum drop in journey volumes each year, but
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they continue. We can point to many reasons that volumes of cab bookings/journeys have and continue to fall, but how much of it is due to systemic issues? Is multi-apping, which is linked to worker status, plus refusals and a less compliant and flexible supply not responsible for some of the volume reduction? If you are finding it difficult to answer that question let me help you – the answer is yes! Will the impact of worker status continue to impact your business? You bet it will! Poor service, lack of reliability,
inability to react to sudden
concentrations of demand will all lead to one thing – customers go elsewhere.
Car ownership in this country has stayed doggedly high. One only gets stuck at a restaurant once or twice before one decides that next time one of us will be the designated driver. A late cab to the airport or station increases the blood pressure dramatically and if you are the customer that has ‘that journey’ that no one wants, which the controller used to get covered when he/she could lean on drivers, then it’s back to the car.
The pantomime season has now closed and if no one quite realises it Fairy Godmothers are not real. This industry does not have a parent to pat its head and make it better. The private hire industry is successful, it has a turnover of £13 billion and when it has problems, especially existential problems, it needs to sort them out. Ending up in a tribunal may be daunting, its outcome may be inevitable but that is only the symptom - the illness is worker status. Ignore it at your peril.
FEBRUARY 2025 PHTM
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