HM Treasury officials told a staggering 96% of the finance agreements with taxi and private hire drivers are currently in arrears according to industry sources.
The Licensed Taxi Drivers’ Association (LTDA) shed light on a recent meeting held with Treasury officials and the Finance and Leasing Association (FLA) to discuss ways to help cabbies struggling with finance payments on their vehicles.
According to the LTDA, the FLA revealed that 96% of finance agreements their member lenders have with taxi and PHV drivers are currently in arrears.
The coronavirus pandemic has had a devastating impact on work levels in the taxi and private hire industry throughout the UK.
In a recent LTDA survey they found 99.8% of taxi drivers said their income had been affected by the pandemic. 25.5% of those said they currently had no income at all from driving a taxi due to the pandemic, and 34.8% said they were earning 20% or less of their usual income.
The findings also revealed 79% were receiving support from the Government through the Self-Employment Income Support Scheme (SEISS), but of these drivers 87% said the grants they receive are not sufficient to cover both their living and business expenses.
In March last year black cab drivers were handed the opportunity to take a three-month finance payment holiday, which was designed to ease the burden. As the pandemic progressed this offer was eventually extended by another three-months.
Despite the six-month payment holiday, taxi drivers have continued to struggle financially.
Since 2018 taxi drivers in London have invested over £200million in nearly 4,000 Zero Emission Capable (ZEC) black cabs. Monthly payments for the ZEC taxi and insurance can cost cabbies around £1,200 each month, at a time when work levels are at a record low due to COVID restrictions.
The London Mayor wrote to the Chancellor Rishi Sunak days before the eagerly anticipated Budget last month to call on him to extend payment deferral for vehicle finance agreements to help taxi and private hire drivers keep hold of their vehicles.
The letter sent to the Chancellor, Rishi Sunak, was co-signed and supported by taxi and private hire trade groups, plus vehicle manufacturers including LEVC and Dynamo Motor Company.
Steve McNamara, LTDA General Secretary, said in TAXI newspaper: “I promised to update on our meeting with the Treasury and the Finance and Leasing Association (FLA) to discuss ways to help drivers struggling with finance payments.
“The FLA had prepared some statistics that show just how bad the situation is.
“They told Treasury officials that 96% of the finance agreements their member lenders have with taxi and PHV drivers are currently in arrears. This is pretty telling if you ask me and its clear there is a particular problem in our sector that should no longer be ignored!
“The officials we met with said they would discuss the matter with the Chancellor’s team and come back to us and we are waiting to hear. Like everything during this pandemic, it’s been an uphill battle to get anyone to listen and recognise that our sector needs specific help, but that has not and will not stop us continuing to try!”