REFLECTIONS OF AN THE PENDULUM SWINGS


The Chinese wish: “May you live in interesting times”, could have been written for the taxi and private hire industry over the last seven years, in fact during the last forty years that I have been in the industry I am not sure times have ever been this interesting and it appears likely that it will continue to be so for the foreseeable future.


But of all the interesting times we have had to date, this moment is perhaps the most interesting. Power has suddenly been wrested away from the largest of ride-hailing companies to the smallest of operators and moved explicitly to drivers. The pendulum has swung and it has in my view some way further to swing. Benign interest rates, no inflation and a surfeit of cheap labour enabled the driver to lose any real vestige of power. Cannon fodder may be too strong a term but if drivers left there were plenty of others to fill the space.


Over recent years basic economics kicked in – supply out- stripped demand, costs in real terms reduced and earnings flattened and then fell. In truth this was not all driven by the economic situation as Venture Capital (VC) money was fire hosed around the industry, companies were bought at eye watering multiples, rides were subsidised and the poor old original equipment manufacturers believed that they would never sell another car and piled their money in too.


Making money became an old-fashioned, at times even an out of fashion concept, and the skill changed from running profitable and cash generative businesses to ‘raising invest- ment (sic)’ aka mugging investors and pouring the money down the drain. Well guess what; the wheels have well and truly come off of that bandwagon. The hangover would have been bad enough but now we have labour shortages, rising inflation with a government that could do with inflation being around for a while to reduce the Covid debt, the threat of higher interest rates, higher taxation and over half the cab-using public working from home and showing little appetite for returning to the office.


So here we are - the morning after the night before. Perhaps the Alka Seltzer is going to come in the form of an end to certain nonsenses. In particular, whilst I could understand growing membership of unions when drivers were powerless; I could also understand the desire for revolution when wages dipped below the level that enabled people to work hard, pay their bills and have some money over.


But as that pendulum has swung, and as I said I believe it has further to swing, surely the attraction of worker status, union membership and the rest starts to wane. The irony of seeing the company that caused so much poor practice in this industry jumping the gun and ending up as the totem of a


40


construct, worker status that is unattractive, unloved, unwanted and quite unnecessary is surely delicious.


Instead, companies who do not quickly latch on to the new order will find themselves bereft of drivers. Why mess around with tribunals if you can simply vote with your feet. The smarter operators will have already worked out that to parody Bill Clintons’ electoral team’s famous maxim: “It’s all about the economy [rates] stupid”! Low pay – no way! As the concerns re: tribunals and worker status roll away like the tide going out as a consequence of higher pay and competition for drivers increases, operators will need to develop or rediscover the skills needed to sell dear.


The obvious dichotomy for operators is will moving rates up move demand down? To an extent and using the economists’ favourite line…yes if all things are equal. But all things are never equal. Markets, industries and competitors don’t move equally. They are chaotic, individualistic, free-willed, unpre- dictable, often illogical and frequently opportunistic. So even if there is a temporary dip in demand, fulfilling the bookings you do receive with a great on-time service or quick response times to ASAPs, will in turn place you ahead of cheaper and less reliable competitors. Drivers will follow the rates. Being moaned at for being late and being paid low rates isn’t anybody’s’ idea of fun. So, its simple is it……put up the rates and count the profits? No not quite.


As well as the pendulum swinging towards driver power, regulators are also clawing back some control which they ceded so much of seven years ago. The mighty and litigious Americans dared regulators to close them down, to take them to court to go against Osborne and Cameron’s desire for London to be the tech start up of Europe. Many were encouraged to turn a blind eye. Many felt that they were too small or their council was too timid to take a stand. Many who turned a blind eye or wrung their hands have lost their jobs, been pilloried by safety conscious operators and repre- sentative organisations and have now decided that they are not passive administrators but responsible for managing the frameworks needed to ensure public safety aka regulators.


The teeth are beginning to be seen on many fronts. The new Statutory Guidance, HMRC’s Conditionality, low emission and ULEZs and of course EVs. Many councils have new sets of regulations with demanding and effective obligations for operators, regardless of size or heritage. Consolidation and amalgamation is currently in vogue as is plural working for drivers - even where councils have resisted this, they are changing their views. So, can we just get through this list of issues and get back on the golf course and let Mary or Bob run the office again and just call if there’s a problem? I doubt it.


NOVEMBER 2021


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80