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TAXI AND PHV SHORTAGES: What are the solutions and is it a LONG-TERM problem?
Across the UK peak-time demand for taxi and private hire services has returned at the flick of the switch. However, a shortage of drivers, and in some cases vehicles, has meant a significant proportion of that demand is not being met.
The problem has caused mixed opinions within the industry when it comes to predicting whether the issue will persist in the long or short-term. There has also been a number of solutions discussed online and at forums over the past few weeks.
So where are the shortages, what has caused them and what are the solutions?
First up let’s differentiate between taxi and Private Hire Vehicle (PHV) sectors.
When talking about London’s licensed Hackney taxis there is more of an issue with a shortage of vehicles rather than drivers.
The number of licensed taxi vehicles in the capital has dropped by nearly 25% since pandemic restrictions first hit in March 2020. Currently there are just 13,966 cabs licensed in the capital compared to 18,341 licensed in April 2020.
A short-term recovery solution for fleets and individual licensed cabbies is to simply keep investing in new EV taxis to keep up with the number of drivers returning to the trade. Gaining finance to buy cabs has been hard due to the downturn caused by the pandemic, but with demand higher than ever before lenders are now lending again.
Long-term there has always been the argument that more needs to be done to entice new applicants on to the ‘Knowledge of London’ (KOL), to replace what is an ageing pool of taxi drivers in the capital. The KOL takes roughly three years to complete so there is no quick fix when it comes to recruiting new licensed drivers into the industry, but a well-thought-out plan must now be put in place.
In Scotland, and in particular Glasgow, shortages of drivers are seen as the issue during peak-times. Union representatives have partly blamed the ‘woeful’ support offered by Scottish Government and the local authority during the pandemic.
Throughout the pandemic Unite Glasgow Cab Section union asked both Glasgow City Council and Scottish Government for
financial support to help drivers through the period of low work levels.
The Scottish Government were able to offer eligible cabbies two grants both worth £1,500 each during the pandemic. This wasn’t enough to stop drivers retiring from the industry early or seeking different employment instead.
A Unite Glasgow Cab Section spokesperson responded on social media to the issue of driver shortages, saying: “Glasgow City Council and Scottish Government are partly to blame for the driver shortage.
“Pandemic support for the trade was woeful. A start would be to clear ranks of parked cars so drivers can serve the public.”
They went on to add: “Drivers were working in a poorly paid industry pre-pandemic. Many have had enough.
“It is a legacy of over-provision of Private Hire Vehicles (PHVs), pure and simple. You reap what you sow.”
In the PHV sector there is also a shortage of drivers and the reasons for this are similar across the UK. PHV drivers left the industry to discover similar paid jobs in delivery, logistics and other sectors. The risks, both monetary and safety, are now far less in their new jobs so there must be new big incentives to entice these lapsed drivers back. Many ex-PHV drivers no longer have the pressure of footing large vehicle expenses and do not have to deal with the public late at night, and it will take some convincing for them to return.
There’s also the added complication that operators are competing against the highly advertised (and now well paid) recruitment for HGV drivers. Recruiting new drivers to become PHV drivers is now harder than ever.
The topic of recruitment was discussed at the recent LPHCA Road Show and most operators were in agreement that prices need to increase to in turn allow for better paid drivers. However, raising the prices too much will push potential passengers away into the taxi industry where prices remain regulated.
Discussing the issue on LinkedIn, David James, Director of Personal Class Travel, also raised potential issues surrounding experienced drivers leaving the UK during the pandemic and not returning.
James said: “This is a similar question to the HGV driver shortage in many ways, and some of the same reasons. Just as with HGV drivers, a large number of taxi and private hire drivers were from the EU (probably not as many as HGV though) and returned home during the pandemic, and haven't come back.
“Many left the industry altogether as there simply wasn't enough work out there to survive. Some of them retired completely, others went to work in supermarkets etc, and have become used to a more secure wage and have decided to stay. Plenty simply don't feel it is safe enough to go back to taxi work.
“Councils aren't helping either. Many charge ridiculous amounts for licences, and lots feel it simply isn't worth while anymore with the excessive costs and stringent conditions laid down by some.
“Uber are also a huge factor. For years they have driven down fares and income to a level that is not sustainable for many drivers. In some areas it has become a work for Uber or don't get any work situation, because of the market share they have, and many refuse to work for Uber because of their treatment of drivers and the low rates (without surges).”
In the same discussion, started by Mileus Founder and CEO Juraj Atlas, it was thought that the problem could be made short-term if companies act now. Michael Agius, Commercial Director of National Tech Services, said: “This will be a short term issue as long as the private hire and taxi companies do not just sit back.
“Taxi drivers have left the industry to work in different sectors such as retail and courier. The industry needs to work together to offer an attractive package for drivers to return such as driver benefit and reduced commissions rates.
“Taxi drivers have to spend thousands of pounds to have the right vehicle and all the relevant insurances in place, plus renewal of PCO licence which is costly. If operators action the above they should start to see an increase in new drivers and driver retention.”
James Deville, Sales Director as Curtis Gabriel, added: “It doesn’t need to be a Long Term issue. I’m currently working with many Private Hire and Taxi Fleets across the UK, bringing drivers back to work in the industry.
“Many drivers left fleets through the pandemic to go and work for supermarkets, delivery companies or found an alternative industry. An element also took early retirement. Fleets that are being proactive to let drivers know there is plenty of work back out there and money to be made are successfully bringing drivers back to their fleets. I have a number of case studies of fleets we have worked with to show this.
“The issue we face, is through the pandemic there was not the influx of new drivers entering the trade, taking their tests and gaining their badges. The local councils need to work with and help fleets to help bring the new blood through as quickly as possible.
“This doesn’t need to be a long term challenge. If Fleets are proactive work and collaborate with the right people it can be over come in the short term.”
What should be done next?
For this to be a short-term issue the taxi industry will need support with their fleets. If the Government and Local Authorities want to ‘build back greener’ and take more privately owned vehicles off the road, they need to invest in the taxi industry fleet. Bigger grants and chargepoint incentives should be at the heart of a short-term fix. Taxi drivers and fleet owners need the short-term ability and confidence to start buying new taxis again.
Government and Local Authorities need to start listening to the trade or face long-term coverage issues.
In the PHV sector the issue of recruitment and retaining drivers focuses mainly around pay and driver safely. Driver pay has been squeezed for a number of years prior to the pandemic meaning delivery jobs are now seen as more attractive. PHV Operators appear to widely agree that all prices must rise to attract drivers back. But if the cost of journeys increases, will customers be willing to pay it?
It’s a complex situation, and personally, I don’t think the PHV industry driver shortage will be a short-term fix in the UK.
