THE TAXI FLEET OWNER SQUEEZE: The problems facing cab fleet owners during the pandemic
As a full time taxi driver, I know first-hand the difficulties the trade is currently facing since the coronavirus pandemic washed over the industry, wiping away tourism, hospitality, and everyday travel as a whole.
Front line drivers have struggled on a day-to-day basis to find enough fares to even cover their overheads. But what about parts of the taxi industry which sit in the background, such as fleet owners?
These companies have committed to purchasing dozens, if not hundreds of taxis, to maintain and rent out to drivers who choose to avoid the overall financial commitment of purchasing a vehicle of their own.
Rental drivers and rental fleets go hand-in-hand. They cannot function without one another. So, if drivers are unable to warrant time in a cab, then cabs sit empty on forecourts up and down the UK. How has this directly impacted the fleet owners?
TaxiPoint has spoken exclusively to one of the owners of a taxi rental business which has been operating for 15 years, who has given us an in-depth look into what it’s been like to own a large fleet of cabs during these testing times.
Ben Waine of Elite Taxis in Essex said: “Like many people around the UK we suppose, when the Government initially announced that the spread of the coronavirus had hit global pandemic levels, they really had no idea of the magnitude effect it would have on them as a business.”
As a fleet owner of almost 100 cabs, Ben told us that during the period between the global pandemic being announced and the first hard lockdown, 95% of the cabs they rented out to drivers had been returned. The fear of the virus, coupled with expectations that work levels would rapidly drop had sent drivers into panic, causing them to off-load all expenses and run for cover. Within the first week of lockdown, the fleet had seen all cabs returned to base.
Finding a place for the cabs to be held was the first challenge the fleet owners had. Eventually the taxis were parked up at a range of locations including the industrial estate where the business was being run from, staff driveways, as well as the driveways of family members. Some drivers were even kind enough to let the cabs sit dormant on their own driveways. Lockdown had hit fleet owners with an issue that they could never prepare for.
Once the cab locations were taken care of, Ben said the next pressure on the company was finances. With so many taxis no longer bringing in rental fees, the firm had to seek any financial aid which the Government had available.
Ben told us that as soon as it was announced that businesses which were struggling had the opportunity to apply for ‘Business Rate Relief’ they had to take it, as well as the small business grant. Without these, Ben says it would have been impossible to stop the company from going under.
With rent to pay on the firm’s business premises, insurance and tax to cover on vehicles, and vehicle finance packages to cover, Ben has called the Government help a “God send”.
The months that followed saw no action or improvement within the industry, forcing the company to apply for a bounce-back loan to help cover any costs which were beginning to creep in again, but Ben says they were unfortunately denied one from their bank. A decision they are still fighting.
Although a bounce-back loan would certainly help them as a business, Ben has said they are very much aware that it would just add to the debt they are already in as a rental company. It is the way that sort of business has to operate; upfront costs, to see a return somewhere in the future.
Moving on to August when lockdown had begun to ease, Ben said a few drivers were slowly returning to work to test the waters. By mid-August the company had 13 taxis back out on the road, out of nearly 100. Leading up to Boris Johnson’s second announcement imposing tighter lockdown rules and a 10pm curfew, Elite Taxis only had 17 taxis being actively used and bringing in a weekly rental fee, which were being offered at half-price.
Following the announcement from Boris, Ben says 2 cabs were returned because work levels drastically dropped. He now fears that as drivers are really struggling once again, those remaining 15 taxis could be handed back over the coming weeks.
Ben says he believes the next six months are the most vital for the industry and thinks if we can drag ourselves through it, we can once again grow as an industry.
But he has stressed that insurance companies and finance firms are now starting to press for payments to begin again, causing major concerns for them as they currently have very little to no income. To help cut costs, the company has had to give up half its business premises to save on rent costs, meaning they have even less space to store taxis which are not in use.
Ben has said if he could ask the Government for one thing it would be for another one-off payment to assist small businesses survive the next 6 months. He believes if this happened, they would have a good chance of making it through these unprecedented times.
Ben says keeping his fleet business afloat is currently hanging in the balance at 50/50. He wants to remain in business and understands the knock-on effect closing the company could have on rental drivers and hopes it doesn’t come to that. But speaking openly and honestly he has said that just like cab drivers themselves, a decision is going to have to be made on whether being in the taxi trade is still going to be a viable business in its current format.
As Ben has explained, fleet owners, although somewhat in the background, have felt the squeeze, the financial pressures, and the mental strain that drivers have had to endure this year too, and can only hope that we can all come through this and once again be proud of this wonderful industry we have all given blood, sweat and tears for.
