Taxi Driver Online

Couple driven to despair by taxi trade.

Jul 20 2006

By Peter Young, The Evening Chronicle

A couple planning to start a taxi business were shocked when they discovered licence plates were changing hands for up to £50,000.

Frank Norton, 56, and his wife Linda, 47, of West Moor, Newcastle, wanted a hackney carriage proprietors' licence so they could start their own black cab business.

But they were forced to scrap their plans when they found out Newcastle City Council has placed a limit on the number of plates issued - and could not afford the prices being asked within the trade.

Instead they ended up working for a cab firm, paying £230 a week to rent their vehicle. They've now left the trade and Mr Norton has got a job as a painter while his wife works part-time in a shop.

The local authority placed a limit of 780 on the number of plates in 1998, though the situation is reviewed. A spokeswoman said: "There is no significant unmet demand and we would struggle to accommodate any more cabs on existing ranks." Licence plates belong to the council and the annual fee is £280. Trading plates is not illegal but the council said: "It's not something we encourage."

Mr and Mrs Norton, who have four grown-up daughters, decided to go into the taxi business together after he lost his job as a manager in the building industry. They got their licences from Newcastle City Council after taking the knowledge test and Mr Norton said: "Both my wife and I spent a lot of time, effort and money obtaining hackney carriage driving licences.

"We also undertook an advanced driving programme with the Institute of Advanced Motorists. To our dismay, we found the only way to obtain employment in the industry is to hire an already licensed car or buy a plate from a multi-plate owner.

"The asking price for plates is in the region of £50,000 and there is no way we could afford that. A small number of individuals own the majority of plates. "Multi-plate owners rent the vehicles out to drivers like myself and we have to work up to seven 14-hour shifts a week to pay these charges and make a wage.

"Newcastle's licensing policy seems to protect the rights of multi-plate owners to the detriment of taxi drivers and the travelling public."

Chris Chandler, director of Newcastle-based Noda Taxis, said there are enough black cabs to meet demand and people who want to start a taxi business can apply for private hire plates.

Hackney carriages work from ranks in the city and people can flag them down while private hire taxis have to be pre-booked.

Mr Chandler said: "There is no restrictive practice. If people want to start a business they can get private hire plates."
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Taxi Driver Online
www.taxi-driver.co.uk

Obviously they hadn't looked into it properly before they decided to start their business.

There are too many people out there that assume if they are paying £x for a taxi home after a night out that it must be a goldmine it never occurs to them that it actually costs a lot of money to do the job in the first place

EVENING CHRONICLE (Newcastle, UK)

August 1, 2006 Tuesday

Letters page.

J M BLAKE, Contracts Manager, MetroCity Taxis Ltd, Newcastle.

Hazards of taxi trade

WITH regards to Peter Young's report, Couple Driven to Despair by Taxi Trade (Chronicle, July 20) it is a regular talking point among the taxi-using public who may wish to come into the trade or are amazed at the costs involved.

As taxis and hackney carriages are part of the public transport network, any individual or business connected with public transport will inform you of the high costs involved. However, the taxi and private-hire trade receives no public funding whatsoever to alleviate their business costs.

If the couple involved wish to start a taxi business, other areas in the region may accommodate them. However, as the Disability Act 1995 is being currently enforced by local authorities, whereupon all taxis need to be wheelchair-acceptable, this could cost them as much as £33,000 per vehicle. This, plus interest, insurance, licence fees, etc, could take them up to £40,000 per vehicle. Cheaper vehicles are available of course, but most business costs remain the same.

One must not forget that, as a self-employed person, national insurance contributions, own sickness plans and pension must also be taken into account. At present Gateshead Council is issuing licences, but as recent demonstrations by Gateshead taxi drivers have shown there are too many licensed taxis on the streets sitting idle as there are not enough ranks to accommodate them.

The over-supply of taxis and lack of earnings is now causing hardship among trade members. Most of the Hackney fleet in Newcastle is owned by individuals, but during long bouts of deregulation, many have come into the industry, and fallen by the wayside. Some have incurred unsustainable debts and have been bailed out by other owners, allowing them to walk away from a bad business venture. The few multiple owners then have to recoup their investment, hence the hire charge as stated in the report.

The report also said they have the option of going into the private-hire market. This is true, but as many private-hire operators and owner drivers will inform you, many of the business costs are similar to running a vehicle.

Office costs can be horrendous as one has to have the various radio and computer software to make the whole operation work. But the main point to remember is that hackney carriages have their fares set by the local authority. Unlike other businesses one has to set one's income as to what the local authority believes the public should pay. If there is regulation you have a chance of survival. If the local authority deregulates and the fleet doubles - as occurred in Newcastle on two occasions - then the pie is shared by more drivers. The pie does not grow!

If Mr Norton believes he will work fewer hours as an owner as to hiring a taxi as a driver, that is not always the result. Either way the costs have to be met. As a driver he can hand the keys back! As with all business ventures, it is well to do extensive research before making that final commitment.

J M BLAKE, Contracts Manager, MetroCity Taxis Ltd, Newcastle.
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