Earnings from Taxi Drivers
Introduction
The question of how you deal with earnings from taxi drivers is always a problem. This is an area where benefit inspectors and assessors suspect that all taxi drivers lie to us. Council officers are often faced with several problems:
|
1. |
Two sets of books. |
|
2. |
More often than not no accounts whatsoever. |
|
3. |
Accounts written on the back of a cigarette packet. |
|
4. |
No accountant. |
|
5. |
The accountant is a mate/member of the family/spouse who has no training as an accountant. |
|
6. |
The accounts have not been properly audited |
|
7. |
All are self-employed. |
|
8. |
They only do a little bit at the weekend to keep their hand in. |
The bottom line is that the majority of taxi drivers seem to do under 16 hours per week and only earn £15.
Reality Check
Despite the protestations of the taxi driver and the suspicions of benefit staff that all taxi drivers must be making a small fortune, there a number of facts to consider.
|
1. |
A number of taxi drivers are on the taxi company's payroll. Most of the good taxi firms are working this way because they get a good deal on bulk car leasing. Local businesses and local authorities are more likely to give contracts to a taxi firm that is a registered company. Organisations that want to have a contract with a taxi firm will be looking for reliability. The one-man-band is not thought of as being as reliable as a firm. However, in rural areas the one-man-band may be the only option. |
|
2. |
It does cost money to run a car. The driver/owner will probably have to licence more than one car. Taxis do have high running costs because of the mileage and the fact that most of the usage is over short distances, more often than not in urban or semi urban areas. |
|
3. |
In some areas there is a surplus of taxi firms and therefore finding customers can be difficult. Taxi drivers can put in long hours but carry few passengers. |
|
4. |
Weekend work is good. A taxi driver who is prepared to work on Friday and Saturday nights can expect to earn as much on those two nights, as a driver who only works Monday to Friday. Thursday and Sunday nights are the second two busiest nights. Wednesday, Friday and Saturday day work is good, as these are shopping days. It is worth checking with the out of town shopping precincts to see which of the taxi firms offer a free telephone calling service. Having a freephone in Tesco is not something that the one-man-band can afford to do. Wet weather will draw out the customers, for short journeys as well as long journeys. While in sunshine alternative transport is used. January is a very poor month for taxi driver, while December is often a good month. It should be noted that in December the need for taxi drivers has greatly reduced as Christmas shopping has extended over six months. |
|
5. |
The so-called middle classes tend to use less taxis than other groups. These days one member of the domestic partnership will drive and not drink. This grouping will also be multi-car users and is another reason why they do not use taxis as much as many others. Even groups of men from this social class are likely to go out drinking with one of their number as the designated driver of the night. |
|
6. |
It costs money to licence a driver and the cars. It is not reasonable for a driver to spend £150 to licence two cars and a further £75 to licence himself and only do £15 a week. |
|
7. |
When on holiday a one-man-band will get someone else, a brother or father-in-law to keep the business going. They may be claiming benefits too. |
|
8. |
Retired drivers are more likely to work the day shifts, while married men will do either, unless they have another day job in which case they will do a few hours in the evening, early mornings and weekend work. Middle-aged single men will do the night shifts. More women are working in this field but tend to be used for couples and women passengers. |
|
9. |
The one-man-band will give little or no consideration to their own health and safety (or in many cases those of the customer, would you choose to be driven by someone who has not slept in the last 24 hours?) |
|
10. |
If a driver/owner is not doing enough hours then there is the question, are they available for work, or are they already doing other work? |
Taxi Earning Policy
Firstly you need to do some work with your taxi licensing department and one of the reputable taxi firms (either in your district or a neighbouring district). Establish the following:
|
1. |
Which of the local firms run payroll staff (some do a mixture of both). |
|
|
2. |
Which are the busiest times for taxi drivers in your area. |
|
|
3. |
To work out the average number of hours that a driver does find out the average time that a journey takes and multiply it by the average number of journeys that a driver does per week |
|
|
i. |
What is the average number of hours that a full-time driver does per week |
|
|
ii. |
What is the average number of hours that a part-time driver does per week |
|
Where a driver is self-employed but can not/does not/will not offer up his accounts then calculate his benefit on the following simple calculation:
·
Average number of hours * national minimum wage
Remember that he should have a good reason for working part-time. Tell him the above calculation will be used until he supplies you with proof of his real earnings. If he does supply you with real earnings treat as a change in circumstance.
It would be worth updating each time the national minimum wage is changed and check the average number of hours once a year.
Example:
In your area the average journey takes 20 minutes and the average full time driver does 100 journeys per week while the average part-time driver does 50. The average number of hours become 33hrs and 17hrs.
If the average minimum wage is £5 per hour the earnings will be £165 per week and £85 per week
Malcolm Gardner - February 2001