We are still enjoying unprecedented demand for our services and this will be reflected in the Society's annual accounts to be issued as usual in the Autumn. This prosperity allows us to face the future with greater confidence, but it is far from clear as to what that future holds for us and we will need financial strength to meet its’ challenges with assurance. I resist the temptation to let the present buoyancy create a false sense of security or complacency about the future.
RECESSIONS, PRIVATE HIRE AND CUSTOMER’S NEEDS
Newspaper articles are regularly forecasting that a recession is around the
corner and if the last one is any guide, it would hit a single-product service industry
such as ours just as hard as before. There is also the matter of how the imminent Private
Hire Vehicle (London) Bill will affect the fortunes of the radio circuits. Competition
will be even sharper when non-taxi suppliers gain respectability and therefore market
acceptability. Taking advantage of this situation, existing operators are already
announcing ambitious plans to offer improved services tailored for customers' needs.
Customers with a wider choice will exercise that choice, particularly where longer
distance jobs are involved.
Although it is hard to see organisations as large as any of the big three
radio circuits emerging in the near future, I believe that we
can expect a further drift of work away from taxis, especially where higher value work is concerned. I am already aware of existing non-taxi operators preparing significant expansion plans which are aimed fair and square at what they see as the opportunity to extend their services at the expense of the taxi trade. The emergence of ever-bigger corporate clients with massive buying power and influence puts margins and service levels demanded under constant pressure and we have to fight hard to maintain our position and to offer what the customers want. In many cases, medium to large corporates already place more than half their business with non-taxi suppliers, which is a clear demonstration of what could be a continuing trend. This lost business is the high value and longer distance work which we seek to secure for our members. All of us at Dial-a-Cab have to fight back to prevent further erosion of our influence and market penetration and use our powerful brand name, reputation and proven management expertise to develop and offer services which will not only
maintain existing business levels but also regain what has been lost. It is vital at this time to demonstrate to our customers our commitment to be their supplier of first choice with services and management to match.
NEW TERMINALS
In such circumstances, the major commitment to replace our present terminals and also
provide for expansion, needs to be considered very carefully. The burden of loans taken to
pay for them may present a higher degree of risk than we would like at a time when the
trade may be facing an uncertain future. On present assumptions, it could involve a
commitment lasting for 5 years of around £I million p.a. which would seriously limit our
ability to respond to any other unforeseen changes in the market place and consequent
demands on our resources.
The forecast result for this year shows that the drivers' subscription will
probably account for less than 30% of total income. This means that over the years, the
requirement for the members to pay for the running costs and investment needs of the
business has been progressively supplemented by service charges paid by the circuits'
clients. Perhaps this contribution from the paying customer should be used to investigate
and do whatever is necessary to strengthen and retain our core taxi business and to win
back the other business already lost?
Alastair Hill
