Visit Dublin city center on a recent summer afternoon or, much more pointedly, late on a Saturday night and there’s a strong sense that the taxi industry’s recovery after two years of pandemic paralysis is gaining momentum. Tourists have resurfaced on the streets; workers are back in their offices; the pubs are full. But for many drivers, there’s another lingering threat: a price hike.
“At the moment business is pretty good. The volume is there and the industry wasn’t crying out for this increase,” said Mark, a driver who, like others, is concerned that the 12 percent price increase formally announced in newspaper ads this week could spoil the recent recovery in trade.
“You just hear 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 forced upon us.”
Although feelings are mixed, concern among drivers waiting for fares at Foster Place in Dublin is perhaps unsurprising – while there may be a shortage of cars for the public, there is a sense that money can finally be made again.
The National Transport Agency (NTA), which has also announced a requirement for all drivers to accept card payments, says 80 per cent of views received during a recent consultation process supported the proposed fare increase. Over the course of an afternoon talking to drivers, most told The Irish Times they were skeptical about both the need for it and the timing.
Almost without exception, they complained about the time and cost of recalibrating their taxi meters, although the NTA, which regulates the sector, points out that this was taken into account when calculating operating costs.
More generally, there are concerns about how the customer will react at a time of record inflation and looming winter energy bills.
Research commissioned by the NTA recently found that 35 per cent of taxi users agreed they got good value for money, while 38 per cent disagreed. While this was broadly flat, there was a drop in perceived value compared to a 2019 survey when 50 percent felt they provided value.
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Still, like all businesses, taxi drivers face rising costs and overheads, not least a recent increase in the cost of fuel.
The NTA’s National Maximum Taxi Fare Review 2022 speaks of a “series of unexpected short-term macroeconomic shocks” over the past two years, particularly in the service sectors. While people were saving money, it said, current economic and geopolitical uncertainties raised the question of whether they should spend it.
“This could adversely affect the taxi industry, despite the forecast of continued Irish economic growth.”
Recession conditions
The price reviews are designed to keep pace with changing economic environments and inflation. The 2012 recommendation for a 4 percent increase was never implemented due to industry concerns about the recession.
A 4 percent increase was implemented in 2015 and prices rose again by about 3.2 percent in 2018, a figure set the previous year. A 2019 recommendation of a further 4.5 percent was postponed following the massive disruption caused by Covid-19. Next month’s increase takes into account the later postponement.
The 2022 review recommended that the recommended increase would fall between 11.7 and 12.5 percent with increased labor and fuel costs, offset by reductions in insurance costs among other variables.
The public consultation process carried out as part of the review provided overwhelming support for this recommendation – fewer than one in five of hundreds of submissions were accepted. In a statement, Free Now, the taxi app, whose management in Ireland declined to be interviewed, said the vast majority of its “driver partners” believe their ability to continue operating “would be compromised” without the increase.
However, Vinny Kearns, managing director of NXT Taxis in Dublin, believes the process could be simplified by working out an automatically programmed annual top-up over five years that can be reviewed on an ongoing basis if necessary.
“If they increase it [by] 3 percent and it will come in, no one will refuse 3 percent, he says. “But the problem is if it’s released for four or five years and it’s 12 percent, I don’t blame anybody who’s banging on about 12 percent which is exactly the same thing [as] 3 percent per year.”
The taxi business is familiar with disruption, having weathered various challenges since the days of deregulation more than two decades ago, a major upheaval that undermined the value of car cards, or plates, with the Supreme Court subsequently dismissing a claim for damages in the matter in 2015.
In November 2000, the government of the day moved to end a system that controlled the number of licenses issued at the time by local licensing authorities. From then on they would cost £5,000, far less than plates had changed hands for at the time.
“Any driver who had an asset by having a taxi plate is completely destroyed,” John Ussher, then chairman of the Irish Taxi Drivers’ Federation, said at the time.
According to official data, the number of taxis (standard and wheelchair accessible) would later decline from a 2008 peak of 21,177 to 18,034 at the end of 2013, the period in the immediate aftermath of the financial crash.
In July this year, there were 19,111 small public utility vehicles (SPSVs), a broader category, of which 16,065 were standard and wheelchair-accessible taxis. The SPSV number had generally fallen by 20 percent compared to 2011’s figures (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 drive.
Shrinking fleet
“With our national taxi fleet down by 30 per cent over the last 10 years and recent NTA data showing around 2,500 more taxis have left Irish roads since the pandemic, it is vital that we retain the fantastic drivers we already have on our roads – while also exploring ways to bring new drivers on board,” said Free Now.
The NTA said its advertising campaign in July has paid some dividends – taxi driver 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 few years so we know it works,” a spokesman said.
It cited a 5.5 per cent drop in Dublin taxi driver licenses (as opposed to vehicles), 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 permits.
Such numbers are fluid and usually affected by events – Ireland has no cap on the number of SPSV driving licenses or vehicle licences.
But statistics aside, many in the industry talk about how the pandemic wiped out drivers they say couldn’t survive on government subsidies.
At Limerick’s Treaty Cabs, owner Jude Williams believes the industry nationally has seen a drop of as many as 40 per cent in driver capacity.
“They would be back now if they were to come back,” he says. Things are relatively calm in Limerick, according to Williams, but better, and they are expected to improve further in the city when the students return in September.
“It’s not as busy as it was pre-Covid but it’s busy. It’s a lot better than it was six months ago. I expect it will take a couple of years for full US tourism to come back.”
The lack of young drivers is indicative of the need for a broader strategy on how to reshape the business, give it an identity and safety they can be attracted to, says Kearns.
– The industry is in chaos right now. We cannot attract new staff to the business, he says. For him, the new working lifestyle stumbled upon by those who stopped driving during Covid, with hours favoring family life, has proved too appealing for many to leave again.
Excess demand
“I warned them [officials]. I said corporate Ireland will be screaming when this country gets back on its feet because we won’t have enough drivers to meet the demand,” he says, evoking nuances of the latest dilemma facing airports.
“The demand that we are seeing today exceeds our ability to deliver at peak [times]… I’ve seen a demand like I’ve never seen and I’ve been in the business since 1981.”
And after the sharp Covid-related decline in taxi use, a further increase in the number of journeys is now likely given the ongoing return to normal social and work-related activities (taxi journeys increased by 12 per cent in the year to February 2022, according to official data). However, the magnitude of the bounces will ultimately be affected by customers’ reaction to inflation.
What the short-term demand looks like is not yet fully determined, but “the pandemic is likely to have a long-term impact on the use of public transport,” the 2022 review document says.
An increase 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, in February last year, found that 81 per cent of adults were users, with 15 per cent climbing into cabs every two weeks or more. But of those who take taxis, 53 percent use them less often than before Covid-19.
Technology has also taken its toll on an industry once dependent on two-way radios and mechanical measuring systems.
Free now looms large – the taxi booking app is an industry giant, facilitating an efficient cab service that has been embraced by the majority of drivers. There is some grumbling – for example, the drivers don’t care about the addition of a new €1 “technology charge” to their fares, which Free Now says is to support further investment in the quality of its service.
But the use of such apps and their effectiveness have done little to solve the problems of growing night-time demand and an apparent lack of service during peak hours, an issue that has been well aired in recent months. Free Now recorded 25 percent more late-night weekend travel inquiries in June compared to the same month in 2019.
Taxi drivers often shrug off the annoyance of those pouring into city streets at the wee hours of the morning wondering why there are no taxis. Many say a change to the licensing laws would take pressure off the system.
Time and money
While technology has helped improve the taxi industry, it also poses a threat and the mere mention of Uber or other similar services draws the ire of taxi drivers who have invested time and money in their work and see themselves as more professionals than owners of private cars offering lifts. However, not everyone makes the distinction.
“When you go to other countries, you know, you have options other than a taxi,” Tánaiste Leo Varadkar said recently, poking at the hornet’s nest.
“Whether it’s public transport, you also have things like Uber and you have 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 liberalize that.”
The seemingly inconsequential remarks made him a bête noire of many in the sector, evoking the specter of deregulation.
Yet, as the industry fights back, raising prices and appealing for new drivers, the Department for Transport played down Varadkar’s comments. Although “always open to review[ing] new proposals”, it said, no special rules have been drawn up for passenger cars outside SPSV. Uber has been operating in Ireland since 2014 but is still restricted to licensed drivers.
“The licensing regime is in place to protect the consumer and to 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 pricing structure, the growing influence of technology and the soon-to-be universal use of cashless payment systems, perhaps followed by the wooing of a new generation of post-pandemic drivers, Ireland’s taxi industry is entering another new era. Whether that means you’ll be able to get one as fast as you want at 1am in a city center is another matter entirely.
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