Taxi Driver Online

Taken from the Director of Finance site www.dofonline.co.uk

You can tell when times are tough because you can hail a taxi. But there is more to this model of supply and demand than meets the eye.

Actually, the cab drivers’ test of recession is not how many shoppers there are but whether they’re carrying bags. No bags, nothing bought. Nothing bought - recession.

But why do the cabbies know this? Because they spend so many hours cruising the streets looking for a fare. And why so much time plying? Because there are so few fares.

Economic slowdown – as we must still officially call the recession – obviously means fewer people using taxis. It is as good as an example of discretionary spending as there is: if the alternative is buses or trains, or to go home before public transport ends, you do it.

So demand is down. But if there used to be 100 cabs on the road and 100 passengers (demand matches supply) what happens now there are only 80 people looking for taxis? Twenty cabs give up? No. On the contrary, the 100 cabs stay on the road longer to make up the cut in their income.

That means each driver doing 25 per cent extra hours, thinking 125 hours x 80 per cent demand returns them to their original 100 per cent income. Except that it doesn’t. It is possible that more cabs cruising the streets make a few people hail a taxi rather than find other transport, but demand doesn’t otherwise increase. So all that happens is cabbies work longer to pick up a similar number of fares.

But if it is futile to work extra hours, not spending longer on the road doesn’t work either. If they work the same hours they pick up only 80 per cent of their normal fares, so they are right to work longer, even if they do not gain on their past income.

Why is this an economic anomaly? Partly because taxi-driving is a capital-intensive occupation. A cab costs more than the drivers’ annual wage: he needs to keep it on the road to average down the fixed cost. In other trades, practitioners would drop out because of the low demand.

But it is also an anomaly because cabs do not cut their fares. If there is a recession, what should give is the price. Taxi drivers should be so desperate for business they will reduce their tariff, both to undercut their rivals and to bring their value to a point that the customers can still justify paying.

Fares are rigid however. That’s why we will take fewer cabs and why
taxi drivers will earn less money.

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IDFIMH

Well I'm not sure that bit stands up.

If a driver works longer to get his 100% income than he use to, then that will mean he will be taking work from someone else's 100% income, who in turn will work longer and eat into his 100% income.

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IDFIMH

Add to this calculation the increase in drivers for London for 2008.

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Charlton's lost past http://www.youtube.com/watch?v=jsFKWGlrze0
London's future? http://www.telegraph.co.uk/news/uknews/ ... rants.html

Well if more cab drivers worked at night then they could recoup some of the work lost to the touts.

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IDFIMH

Better still if TOCU did their job properly against the constant pi55 taking by PH.
How much percentage of a PH drivers income is actually blatantly stolen from us, from the touts on the street, clipboard johnnies and rows of them outside hotels that are "on view" and in effect are touting.
Driver orgs should get together and bring London to a standstill instead of fecking around with stupid side issues like bash the flash, cheap holidays, pedicabs, and Alan Fleming spending members money on legal fees to keep his dustbin plated and rolling.

For fecks sake why dont they WAKE UP!!!

Give it a rest..always Blaming PH, the simple truth is when work becomes scarce some will go under, those that provide a better service will out perform those that dont and those that dont will be the ones that go under. you can whine and buckpass as much as you like but at the end of the day your energys would be better served trying to work out a strategy to survive rather than waste your energy on things outwith your control. survival of the Fittest pure and simple.

If there's any Solice to be had its the fact that the Luxury of car ownership will be an early casualty and that a lot of people will sell their car which costs £75 per week and use Buses and Taxi in order to save money.

Keep up David, after yet another massive round of infighting, Alan Fleming and Dave Cohen have parted company with the LCDC.

They've been replaced by Grant Davis the actor.

Someone else whose name evades me at the moment is taking them to court, and someone else has apparantly eaten all the biscuits . . .

Apparantly Alan's doing his own legal service now.

Does he still drive that E reg Metro? Surely not?

A very valid point.

It's a simple equation, during the day Taxi's wait on passengers, at night passengers wait on Taxi's.

Fairly straightforward you would have thought?

That depends if the drivers who don't bother to renew their badges outnumbers the new badges issued.

There's been a deficit for a couple of years now.

"Fares are rigid however. That’s why we will take fewer cabs and why
taxi drivers will earn less money."
How true!
Maybe it's time to change the tarrif. The present tarriff works against drivers for jobs over two hours or 20 miles,ie we no longer get that work.

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Charlton's lost past http://www.youtube.com/watch?v=jsFKWGlrze0
London's future? http://www.telegraph.co.uk/news/uknews/ ... rants.html

I thought you guys could give a price for a Job as PH do...that would be better than Fixed TarrifF

There tariff sheet is the same as ours where it states the fare is maximum that can be charged and thats what they do.
I stopped the students discount 2 years ago and just charge the full meter rate, but there is now 1 company doing flyer drops offering a pound off all fares when you call them, they can do this as the cars are old sheds that are paid for

they sound Deperate...let them shortchange themselves out of Business...

One or two owners have offered the owner the Ali shuffle
at the rank in broad daylight

That's what the PH do, and at times such as we are in now punters start to work out what has the best value.

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IDFIMH