SUPPLY AND DEMAND: Could taxi drivers be forced to exit school transport work as fare prices fall?
- Perry Richardson
- 1 hour ago
- 2 min read
Concerns are growing within the taxi industry that continued downward pressure on school transport payments could prompt drivers to withdraw from education contracts altogether, potentially creating long-term capacity issues for the Education Authority and pushing costs higher in future.
The issue follows recent confirmation in the Northern Ireland Assembly that the Education Authority has achieved savings of almost £1 million through revised arrangements with taxi operators providing home to school transport. While the reduction has been welcomed as a cost-saving measure, it has also been acknowledged by Education Minister Paul Givan that “for some taxi firms, that reduction in payment is a challenge”.
Within the trade, drivers have warned that falling contract prices are colliding with rising costs across the sector. Fuel, insurance, vehicle finance, maintenance and labour costs have all increased, driven by inflation and high interest rates. For drivers specialising in school transport, particularly those serving children with special educational needs and disabilities, margins are already narrow due to the bespoke nature of the work.
SEND transport often requires adapted specialised vehicles, additional training and longer journey times. Industry figures may argue that these factors the limit flexibility and increase fixed costs, making such work less able to absorb price reductions compared with general taxi or private hire operations serving commuters during key rush hour times at full tariff rates.
Short-term savings may risk longer-term capacity and higher costs for school transport provision
Historically throughout the UK, drivers question whether school transport and other lower fixed price fares remain commercially viable. If drivers begin to exit this part of the market due to its viability any saving made by reducing fare prices may only be short-term to meet immediate budget pressures. However, this approach risks hollowing out the supply base over time.
There is a risk that a sustained reduction in the number of drivers willing or able to undertake SEND transport could leave authorities with fewer options when tendering or renewing contracts. In rural areas, where specialist provision is already thinly spread, even a small drop in capacity could have a disproportionate impact on service delivery.
In the longer term, a shrinking pool of qualified and equipped drivers could shift the balance of supply and demand. With a statutory duty to ensure children and young people with special educational needs can access education, authorities may find themselves competing for a limited number of providers and paying more to secure their services.
Industry observers suggest that such a scenario could ultimately drive prices back up, not through market leverage but simply to ensure sufficient coverage to meet legal obligations. Higher rates may be required to entice drivers back into the sector or to invest in compliant vehicles and training.
