Taxi Driver Online

On another taxi/private forum, I posted the fare formula used by a few councils down here, and a few councils up and around the country.

This formula is very flexible, some say too flexible, but once the formula is agreed by a council, it should allow for a quite straight forward fare review each year. Yes that's right, having the fares reviewed annually, just like the rest of society.

It does't mean they will always go up, but at least the council will have to formally review hackney carriage fares every year.

The formula is basically A+B+C divided by D = E


A is the regional average wage for your area.

All councils have this, and usually put it on their websites, when they are trying to encourage new employers into their district. I think the UK range is about £21,000 to £27,000.


B is the annual running costs of your car.

Now there are about 72,400 licensed hackney carriages in the UK, and I suspect about 72,400 different sets of annual running costs, thus an average must be taken.

So these figures must be assessed locally. Most of the councils who use this formula use the AA or the RAC vehicle running costs. They take the difference in the costs of running an 1800-2500cc petrol vehicle against an 1800-2500cc diesel vehicle. So if the cost for petrol is 45p per mile, and the costs of diesel is 31p, the average to go in the formula is 38p per mile. The vehicle running costs also differ depending on your annual mileage, in other words your mileage rate is going to decrease the higher the mileage. Both the AA and RAC's running costs take that into consideration.

Now to get the annual costs of running your car, you must times the mile rate by your annual mileage rate. So if you do 30,000 a year, your annual running costs will be 30,000 X 38p, or whatever applies to your local area.


C is the extra charge we pay for insurance.

The AA and the RAC's running costs only use normal vehicle insurance. Since we pay way over the top for our insurance, the formula must include an average of the extra we pay.


D is the paid mileage we do.

This formula (part C) gives the mileage you do throughout the year, alas a large percentage of that mileage is dead mileage, either going to a customer, or returning from the last.
Again this is highly flexible, because different districts will have different dead (un-paid) mileage. Hackney carriages in rural areas should have a lot more dead mileage than the lads in London.

To apply the dead mileage to the formula, you must estimate the average amount of dead mileage that you do throughout the year. The councils down here tend to use the 60% paid 40% un-paid ratio, but your council may choose otherwise. So in this example D will be 0.6 (60%).


E is the minimum price per mile you will need, to earn your average regional wage.


So if we go back to the formula and use the example figures, we have A 24,000, B (.38p X 30,000) 11,400, C 1,000.

Put those three together and we get the sum of £36,400. This is the amount of money you need to take, to earn your average regional wage.

To get to the price per mile to achieve that, we first have to find 60% of the 30,000 miles, which gets us to the amount of paid miles we do, which in this case is 18,000.

So we then need to divide £36,400 by 18,000, which gives us £2.02 per mile. To accommodate that into a metered fare, you could have a £2.00 flag with half a mile before the first change. Thus allowing you to have a two-mile fare of £5.03.

If you wanted to try another set of figures, then go ahead, but the beauty of this formula is that once in place it's so easy to amend every year. If the average wage goes up, if your running costs go up, or if your insurance goes up, then so will your fares.

If anyone has any further questions, then please fire away.

dont shoot me down but I conclude formulas dont work.

Take Brighton or Halifax halcrow say there is excess profits well if plates are sky high its a fair conclusion certainly in the opinion of circular 3/85

yet there are some areas where the fare box is nothing but self exploitation its a wonder the busses get any patronage at all.

yet in both the areas mentioned they advocate a late hike to get drivers out?

sounds familiar? well it was reversed in London oops thats controversial

Wharfie

Your quite right Wharfy, it's not the full answer to our trade's woes. But it's a start.

Getting paid for doing a good job, is basically what we do. The problem is that those who do a crap job, get paid the same as those who are a credit to our trade.

I think the bonus of the fare formula is that it is based on the likes of you and me earning the average regional wage, I don't think that's asking too much.

It is up here Andy.

One day Nigel, one day.

If the OFT decided to say that national standards would be a good thing, then perhaps they could also say that a national sort of fare formula, based on such things as the regional average wage, would also be a good thing.

But in truth when it comes to fares, there are no easy solutions. Other than maybe take it out of the control of those councilors, who if they had a brain, wouldn't be councilors.

Yes, well maybe 8 was a bit early in the evening for it??

That's the problem there are so many different structures and the like, especially for unsocial hours premiums.

Eg flat rates, 50%, some start at 10, some at midnight etc.

Take Purbeck in the PHM tables, isn't it 100% after midnight, so they get £8 for a two mile run?? Surely this is over the top by anyone's standard??

The can't all be the correct way to do it!

Dusty

Yes Geoff, part of the problem is me old friend the quota. Say a garage buys a plate in Manchester for £50k for example, then they're obviously expecting their cut from the jockey, so what good does high fares do the jockey?

Another point is that if you get a big fare rise then you just get more cars and drivers in the trade - for example, if fares were doubled then no one is presumably suggesting that the amount of cars and or drivers stays the same??

Dusty

Well I dont see that but I am a rural guy, but I see it like this
if I give you £30,000 for a taxi, you say goodbye to the trade and that money is exported, what a wasted opportunity?

that £30,000 could have cut fares or, and I like the or, it could have bought a quality vehicle and could pay for quality services

I must admit I am not in front of the que for cutting fares I prefer those passengers that are happy to pay it in return for good service!

by the way 8pm is the time I find that punters start going out, I f London says its 8 pm I am noyt to argue, we have a premium past 11pm of 12.5% increase, our lads are happy if they were not action would be taken but its easy to over egg the pudding!

There will always be barriers to trade there is in a lot of industries, but the monatary barrier I find tough to justify, I much prefer barriers to be by education and quality vehicles.

but its fun to discuss the question and see the dancing of that lobby thats paid premiums or got free plates and is trying to shut the door, because they just cannot justify it!

funnyily enough it isnt the taxi drivers who benefit from it its the bankers, and the premium gang conjour up all sorts of restrictive practices to keep status quo stating what is a taxi job and what is a private hire job.

they would not dream of waiting outside churches after service, or outside theatres looking for work, so in the end they virtually close the trade down.

by the way 4 years ago in my manor we opened up, the transport manager has been a sticler and not passed a single vehicle, I was waiting a court case by way of appeal on a vehicle, and got a phone call last week from a "well wisher" saying the transport manager had retired and I ought to speak to the new one, I have done and withdrawn my case, hes like a breath of fresh air, so we are aiming to get some new wavs by the new year, some of the lads are beggining to chunter, but I have promised them lists of dates and times where plying will strike gold!

bet a pound to a penny, instead of spreading around they will line up at the same events like sheep!

Wharfie

The HC and PH trade to a tee !!!!!

It's so much better for 99% of our trade to moan about this, and moan about that, but say to them "well why don't you do something about it", and the silence is deafening.

Similar to a degree with councils, some take the mickey big time (as a fellow poster may say), but it's only when someone stands up and says "sorry mate, but you are out of order", that things change.

Would a national standard work though Andy??? I'd like to see it work aong with many others who work in low fare areas but, you will always get the ones who will undercut you.

National standards could by their nature, only be qualitative.

There could be no legal justification for setting prices or numbers of cabs by national standard, as this would be uncompetitive.

The number of cabs would have to be left open to market forces. However, if the qualitative controls were sufficiently stringent so as to keep out the cowboys (and here London's PCO system can teach us something), then the number issue could be "controlled" within qualitative boundaries.

After all, what is the issue here? In London, for example, the problem has been that there was no licensing or quality controls of any type for PH, thus everyone and his Brother could just set up in business with any old banger, and any idiot of a driver. Now thats hardly fair competition with a black cab is it.

Apply one standard nationwide, a single tier system, and all that competition from cowboys is removed. The industry would become more professional overnight.

Then, if we all had a similar cost and quality base to work from, fares would similarly have to come within certain boundaries. Only a nationwide MAXIMUM fare would need to be set, simply to enable some legislation to prosecute consistent rip-off merchants.

I don't thereafter see a problem in people competing on price issues. Every other industry does, so why should we expect any difference.

As I have previously stated, to keep the cost-base of saloon vis a vis WAV on a relatively equal level, the purpose-built cab/WAV should receive some subsidy with regard capital and revenue support cost. A framework for revenue support cost already exists in the shape of Fuel Duty Rebate, and if the WAV is a public service, it should be entitled to the same public service rebates as a bus, along with exemption from VAT.

The only new item required, is a structure for capital grants.

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There is Significant Unmet Demand for my Opinion.

Well a national fare formula could work if it was based on your regional average wage. As for being under cut, well I doubt any of us on here have never under cut a fixed price.

In London more and more of the HC boys are under cutting their meter price. Why, because if they don't one of their HC competitors might and most of the PH competitors will, under cut them.

Customers, especially the big account customers, are a lot more wiser than they were, say 10 years ago.

What I have noticed in many districts however, is that under cutting is more prevalent in areas with low tariffs, than in high tariff areas.

Which makes as much sense as most things in this trade.

Which is how I expect the trade to be in ten years time.

Quality conditions, not quantity restrictions.

I find it quite interesting what you are saying, though of course it happens at present, a taxi driver who opperates in an area where a lot of solicitors live is worh more than a taxidriver where a lot of unskilled labour lives.

the terms of conditions are a lot different of course and the insurance can be a lot different.

as you say there is more cutting too in areas of low fares, and the qualificatoions are different.

Wonder if we went onto traffic commission, would they rule on fares, or at present with the buses would the passenger transport authorities fix the fares?(this being in effect by tendering system)

is there an inbult unfairness in the present system whereby the largest taxi users also fix the farebox albeit in a different department?

notice in areas where there are the most tendered routes fares are lower than those areas whith the highest number of commercial routes?

those areas that have the lowest bus fares also have the lowest taxi fares, yet some claim that its the taxis that rule the roost in fare fixing for thier private hire counterparts, isnt it the buses, and indirectly the passenger transport authorities?

and finaly the more fare cutting is done in areas of the most provision, in cheshire you are lucky to get a taxi or private hire let alone a cut price one

there would be problems in a national formula

Wharfie

Why should we volunteer to have a National Maximum fare.

Let operators decide what they wish to charge and insist they publish their tarrifs and keep to them.

If you have open access to the market then 'market forces' should be allowed throughout our operations.

If someone wants to charge £10 a mile and offer brand new Bentleys then let them. If someone wants to run an 8 year old Mondeo (as long as it is roadworthy) and charge 50p a mile then let them.