CABBIE QUESTION: How should a taxi driver be charged to use a taxi app?
Updated: Aug 30, 2023
There are a growing number of taxi and private hire vehicle (PHV) hailing apps on the market and that trend looks unlikely to stop. Getting drivers logged onto those apps and accepting work is vital for the growth of the service and generates the reliability required by users.
The two key factors that affect a driver’s decision to accept work centre around fees and run-ins. In this article we’ll look at the fees.
Taxi drivers are typically charged between 10-20% of the metered fare to accept bookings. They may also be subjected to card payment fees on top of those booking fees.
The pros for a driver accepting this work is that they can pick and choose what job offers work best for them, and even work across multiple platforms due to paying no upfront costs. The downside comes if the driver is turning over a lot of app work throughout the week and the total fees payable exceed costs over £150 each week when a membership could cost £70.
Historically on radio circuits drivers have also been able to pay a set weekly or monthly fee to gain access to work. Drivers are more likely to remain loyal to the platform, work less apps at the same time and complete more jobs. The downsides can however be felt during quieter periods and if the driver is forced to take time off work.
In a perfect world most taxi drivers would welcome a capped commission-based system. For example, if drivers reach £70 a week in paid commission, the fees stop there for the rest of the week. If the cap level is set correctly, app platforms would see better coverage during peak times and higher acceptance rates.
Taxi driver Andrew Goodchild supported this idea, saying: “Percentage capped at a weekly maximum payment is the fairest way. Drivers still pay for it if they don’t do much, but if busy pay a maximum fixed fee.”
Cabbie Sheldon Roberts said: “Percentage capped is the fairest method. With a fixed price firms get the money regardless of if there is enough work for their drivers and will flood a system. They have no incentive to advertise to bring in new customers etc.
“On a percentage model the firm only earns if a driver is earning so it’s now in their interest to keep their drivers wheels turning and earning hence advertising / customer incentives etc.”
Could we see one of the app firms break away from the pack and give drivers what they want in 2023?
