‘We didn’t ask for it’: Apprehension among taxi drivers over fare increase

Visit Dublin city centre on a recent summer’s afternoon or, much more pointedly, late on a Saturday night and there is a strong sense that the taxi industry’s recovery from two years of pandemic paralysis is gathering pace. Tourists have re-emerged on the streets; workers are back in their offices; the pubs are full. But for many drivers there is another lingering threat: a fare rise.

“At the moment business is reasonably good. The volume is there and the industry wasn’t crying out for this rise,” said Mark, a driver who, like others, is concerned the 12 per cent fare hike formally announced in newspaper ads this week, and coming into effect on September 1st, might spoil the recent recovery in trade.

“You are just hearing everything else going up, and now [the perception will be] we are another scalper looking for people’s money. We didn’t ask for it, it was imposed on us.”

While feelings are mixed, apprehension among drivers waiting for fares at Foster Place in Dublin is perhaps unsurprising – while there can be a shortage of cars for the public, there is a sense that, finally, money can be made again.

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The National Transport Authority (NTA), which has also announced a requirement that all drivers accept payments by card, says that 80 per cent of the submissions received during a recent consultation process supported the proposed fare increase. Over the course of an afternoon speaking to drivers, however, most told The Irish Times they were sceptical about both the need for it and the timing.

Almost without exception, they complained about the time and cost associated with recalibrating their taximeters although the NTA, which regulates the sector, points out this was taken into account in calculating running costs.

More generally, there is concern as to how the customer will respond at a time of record inflation and looming winter energy bills.

Research conducted on behalf of the NTA recently found 35 per cent of taxi users agreed they were good value for money, while 38 per cent disagreed. While this was broadly even, it was a decline in perceived value compared to a 2019 survey when 50 per cent felt they offered value.

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Still, like any business, taxi drivers are facing rising costs and overheads, not least a recent spike in fuel costs.

The NTA’s 2022 National Maximum Taxi Fare Review speaks of a “series of unpredicted short macroeconomic shocks” over the last two years, particularly in the service sectors. While people saved money, it said, current economic and geopolitical uncertainties raised the question of whether they would spend it.

“This could adversely affect the taxi industry, despite the forecast of a continuation in Irish economic growth.”

Recessionary conditions

Fare reviews are designed to keep pace with changing economic environments and inflation. The 2012 recommendation of a 4 per cent increase was never implemented due to the industry’s concerns over recessionary conditions.

A 4 per cent increase was brought in in 2015, and fares went up again by approximately 3.2 per cent in 2018, a figure set the previous year. A 2019 recommendation for a further 4.5 per cent was postponed following the massive disruption brought about by Covid-19. Next month’s increase takes that latter postponement into account.

The 2022 review recommended that, with increased labour and fuel costs, offset by decreases in insurance costs among other variables, the recommended increase would fall between 11.7 and 12.5 per cent.

The public consultation process conducted as part of the review delivered overwhelming support for this recommendation – fewer than one in five of hundreds of submissions took issue. In a statement, Free Now, the taxi hailing app, whose management in Ireland declined to be interviewed, said the vast majority of its “driver partners” believe their ability to stay working “would be compromised” without the increase.

However, Vinny Kearns, chief executive of NXT Taxis in Dublin, believes the process could be simplified by working out an automatically programmed annual increment over five years that could, if necessary, be reviewed on an ongoing basis.

“If they increase it [by] 3 per cent and it comes in, nobody is going to balk at 3 per cent,” he says. “But the problem is if it’s let go for four or five years and it’s 12 per cent, I do not blame anyone balking for 12 per cent which is exactly the same [as] 3 per cent per annum.”

The taxi business is familiar with disruption, having shouldered various challenges since the days of deregulation over two decades ago, a major upheaval that undermined the value of car licences, or plates, with the High Court subsequently dismissing a claim for damages on the issue in 2015.

In November 2000, the then government moved to end a system that controlled the number of licences issued at the time by local licensing authorities. From then on they would cost £5,000, far less than plates had been changing hands for at that time.

“Every driver who had an asset by having a taxi plate is completely destroyed,” John Ussher, then president of the Irish Taxi Drivers’ Federation, said at the time.

According to official data, taxi numbers (standard and wheelchair accessible) would later decline from 2008 highs of 21,177 to 18,034 at the end of 2013, the period in the immediate aftermath of the financial crash.

As of July this year, there were 19,111 small public service vehicles (SPSVs), a broader category, of which 16,065 were standard and wheelchair accessible taxis. The SPSV rate generally had fallen by 20 per cent on 2011 numbers (23,777).

Free Now, which has been in the Irish market for 10 years, said it hoped new fares would not only support existing drivers but attract new ones – an imperative embraced by the NTA which recently launched a recruitment campaign.

Diminishing fleet

“With our national taxi fleet diminishing over the past 10 years by 30 per cent and recent NTA data showing that approximately 2,500 more taxis have left Irish roads since the pandemic, it’s crucial that we retain the great drivers we already have on our roads – while also exploring ways to bring new drivers on board,” Free Now said.

The NTA said its ad campaign in July has paid some dividend – taxi driver test bookings increased by over 50 per cent in the first week.

“We did this in 2018 too and got 3,000 new drivers over the next couple of years so we know it works,” a spokesman said.

It cited a 5.5 per cent drop in Dublin taxi drivers’ licences (as distinct from vehicle ones), compared to 7.3 per cent nationally since pre-Covid.

While the rate of newly licensed drivers has plummeted since 2019 (541 in 2021 compared to 1,673), the NTA now estimates a monthly flow of over 100 applications to An Garda Síochána for SPSV authorisation.

Such numbers are fluid and typically affected by events – Ireland has no cap on the number of SPSV driver or vehicle licences.

However, putting statistics to one side, many of those in the business talk about how the pandemic cleared out drivers they say were unable to survive on government supports.

At Limerick’s Treaty Cabs, owner Jude Williams believes the industry nationally saw a drop of as many as 40 per cent in driver capacity.

“They’d be back by now if they were coming back,” he says. Things are relatively quiet in Limerick, according to Williams, but better, and they are expected to improve still further in the city when students come back in September.

“It’s not as busy as it was pre-Covid but it’s busy. It’s a lot better than what it was six months ago. I reckon it will take a couple of years for the full American tourism to kick back in.”

The shortage in young drivers is a sign of the need for a broader strategy on how to reshape the business, giving it an identity and certainty they can be attracted to, says Kearns.

“The industry is in turmoil at the moment. We can’t attract new personnel into the business,” he says. For him, the new working lifestyle stumbled upon by those who got out of driving during Covid, with hours more conducive to family life, has proven too appealing to many to leave again.

Surplus demand

“I warned them [officials]. I said corporate Ireland will be screaming once this country gets back on its feet because we will not have enough drivers to service the demand,” he says, evoking shades of the recent dilemma facing airports.

“The demand that we seeing today exceeds our ability to deliver at peak [times]… I have seen a demand that I have never seen and I am in the industry since 1981.”

And after the sharp Covid-related decline in taxi use, a continued rise in journey numbers now is likely given the ongoing return to normal social and work activities (taxi journeys increased 12 per cent in the year to February 2022, according to official data). However, the scale of the bounce will ultimately be affected by customers’ response to inflation.

How demand in the near term plays out is yet to be fully determined but “the pandemic is likely to have a longer-term impact on public transport use”, the 2022 review document says.

A surge in home-working and reduction in “in-person” meetings means the old reliance on transport, including taxis, “may no longer be as true as in pre-pandemic times”.

The most recent survey on taxi use, last February, showed 81 per cent of adults were users, with 15 per cent climbing into cabs fortnightly or more. But of those who take taxis, 53 per cent use them less often than pre Covid-19.

Technology too has brought its weight to bear on an industry once reliant on two-way radios and mechanical metering systems.

Free Now looms large – the taxi booking app is the behemoth of an industry, facilitating an efficient cab-hailing service that has been embraced by the majority of drivers. There are some grumblings – drivers do not care, for instance, for the addition of a recent €1 “technology fee” on its fares which Free Now says is to support further investment in the quality of its service.

But the use of such apps and their efficiencies have done little to solve the problems of growing night-time demand and an apparent lack of service at peak times, an issue well-aired in recent months. Free Now recorded 25 per cent more late-night weekend trip requests in June compared to the same month in 2019.

Taxi drivers often shrug it off as the vexation of those who pour into city streets at the same small hour of the morning and wonder why there are no cabs. Many say a change in licensing laws would take the pressure out of the system.

Time and money

While technology has helped improve the taxi industry, it also presents a threat and the mere mention of Uber or other similar services draws ire from taxi drivers who have invested time and money into their work, and who see themselves as being more professional than owners of private cars offering lifts. Not everyone makes the distinction, however.

“When you go to other countries, you know, you have other options than a taxi,” Tánaiste Leo Varadkar said recently, poking the hornets’ nest.

“Whether it’s public transport, you also have things like Uber and you’ve things like Lyft and they’re just not available in Ireland in the same way. And maybe we need to look at that again and see if we can liberalise that.”

The seemingly off-the-cuff remarks cast him as a bête noire of many in the sector, evoking the ghosts of deregulation.

Still, as the industry struggles back to its feet, raising fares and appealing for new drivers, the Department of Transport played down Varadkar’s comments. Although “always open to review[ing] new proposals”, it said, no special regulations have been developed for passenger cars outside of SPSVs. Uber has operated in Ireland since 2014 but remains limited to licensed drivers.

“The licensing regime is in place to protect the consumer and to help ensure personal safety,” a spokeswoman said, adding that “the issue is not the use of technology, but rather the principle of licensed drivers and licensed vehicles”.

With a new fare structure, the growing influence of technology and the soon-to-be-universal use of cashless payment systems followed, perhaps, by the wooing of a new generation of post-pandemic drivers, Ireland’s taxi industry is entering another new era. Whether that means you will be able to get one as quickly as you’d like at 1am in a city centre is quite another matter.