NO MORE TAXI DRIVERS PLEASE! Recession looming and rising industry costs could squeeze 2023 demand

A significant number of drivers left the taxi industry during the coronavirus pandemic, rightly prompting a call for more cabbies to apply and literally join the many empty ranks.

That call was made even more urgent when demand for taxis rocketed after the final covid restrictions were eased during spring 2022. However, just as one crisis ended, another one began with the cost-of-living spiralling and the war in Ukraine unfolding.

Demand for taxis has remained strong in most UK cities despite the squeeze on the economy, but the bite of another recession remains lurking around the corner moving into 2023.

Historically the taxi industry has been used as a barometer to gauge the economy. As a result, any downturns and upturns in spending are usually quickly felt by the trade.

However, this time round it’s different due to the imbalance in taxi supply and passenger demand in many cities. In cities that thrive off foreign tourism the weak pound is still inviting high levels of overseas visitors. The recession is also expected to be shallower when compared to some of the more devastating instant downturns felt before.

With all this in mind, many are expecting the taxi industry to ride this one out better than previous years. With taxi driver numbers remaining low it can afford to lose some of the oversubscribed demand. If taxi driver numbers were however to rise over the next two years and demand falls, that’s when problems will be felt.

We polled our readers asking them whether the taxi industry needed more taxi drivers. Nearly two-thirds of those who responded thought we already had enough, while the other third (35%) surveyed thought we still needed more new cabbies onboard.

In many cities the next few years are seen as important ones for the taxi industry due to incoming Clean Air Zones (CAZ) and changes to rules surrounding the vehicles that can be driven. Investment will be key and any squeeze felt will impact that. The demand imbalance tipping in favour of the taxi driver this time round is no bad thing in the short-term, but there needs to be a plan ready for when the upturn begins.