the knowledge
Driver shortage or pay shortage?
M
uch indignant, hot air is
money. Yes, the very people who not so long being directed at TfL and other ago would have considered becoming PH regulators concerning the current drivers. ‘driver shortage’. But the facts (an What happens if people e-shop, e-eat, often-neglected concept in this industry) do not e-work and e-live? They use fewer cabs. in my view apportion any blame on regulators Therefore, demand is not going to move back for this particular predicament. to normal levels any time soon. I know we I would go so far as to point out that in most all like to think we have been clever, but we areas of the UK, licensed PH driver numbers are have in this industry enjoyed the luxury of Dr Michael Galvin being able to quickly access a pool of people at historically high levels. We have seen over the past five years or so licensed drivers increase by who needed or wanted to earn some extra https://mobility a quarter and in some areas by more. Whatever money quickly when demand flexed up. We serviceslimited is causing driver availability to appear elusive have been able to see supply return to normal .com it is not the number of licences that is the levels when demand diminished, either problem. So, let’s agree there are a deeper issues at play seasonally or cyclically. here. Well, that ship has sailed and we are now facing a world of fighting for flexible resources along with freight SO, WHAT IS THE PROBLEM? companies, goods delivery companies, grocery stores and Before we talk about ‘the problem’ let us consider the food delivery. And this is not going to change any time soon. operating environment. Fares are at levels not seen in this The wiser operators have always recognised that finding industry for probably 40 years. At the same time, the surfeit and then holding on to good drivers was the key to their of cheap labour and labour with relatively low earning business growing sustainably. Well, nothing has changed expectations is waning fast, mainly due to Brexit. except that some previously wise operators have allowed That pool of labour, which was the source of many PH themselves to get sucked into reducing rates paid to drivers, is in more demand than has been the case for drivers. many a decade thanks to the way we now live, work, shop The outcomes are clear. We are in an inflationary cycle. and eat. Our industry has been disrupted in recent years. It might not be the 26% inflation of yesteryear, but it is Not, as many, frankly ill-informed pundits may claim there and it is clear every time you fill up. The inflationary through disruptive technology, but through disruptive cycle on pay is moving up significantly, albeit distorted by money. And it is now being impacted by the EU referendum, furlough, additional universal credit payments and so on. demographics, and behavioural and lifestyle changes. But as labour shortages begin to bite, inflation will bite Before the pandemic, we had previously respected further. consultancies, who should know a great deal better, An industry with mileage rates at 40-year lows in a standing up at transport conferences and presenting what market where the very resources they need are in high they describe excitedly as “awesome disruptive business demand and where demand is pedestrian has a systemic, models”. In reality these were “profit prevention schemes”. maybe even an existential, problem. We had car makers buying anything that had a hue of Mileage rates are going to have to go up and go up ‘mobility’ about it for vast sums. And we had venture significantly if you are to retain your drivers. Will customers capital companies that are happy like it? Probably not, but in the to subsidise private hire journeys words of John Griffin, a man by up to 60%. who knows a thing or two about There was a clear bandthis industry: “Good service is wagon rolling – but that was remembered long after price is only ever going to end in tears. forgotten.” It’s interesting to note that If people want service, they the same accolades quickly are going to have to pay for it. As moved to food deliveries and are operators, your service will need now “transforming” to be sufficiently good for them grocery deliveries. to feel comfortable doing so. So, what do these forays by The alternative is bookings but VC companies, clapped and no drivers and another heated applauded by consultancies and meeting with the regulator who financial page scribblers, have in has no mandate to run your common? They all dip into the pool business for you! n www.mobilityservices of people who are looking at lowlimited.com entry, flexible opportunities to earn
“So, what do these forays by VC companies, clapped and applauded by consultancies and financial page scribblers, have in common? They all dip into the pool of people who are looking at low-entry, flexible opportunities to earn money....”
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AUGUST 2021
