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Operating Cabs, Hire Cars Solving the

12th January 1945
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Page 39, 12th January 1945 — Operating Cabs, Hire Cars Solving the
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Which of the following most accurately describes the problem?

Problems of

and "Drive Yourself" Vehicles rhe Carrier

Some General Observations on the Matter of Hire Cars with Preliminary Figures for Costs of Operation. The First of a Series of Articles Dealing Comprehensively with this Subject

IT is not, after all, a far cry from haulage contractor to hire-car operator. I know many hauliers who actually participate in the operation of hire cars alitl regard it, if not as the most important part of their business, at least as a profitable and convenient sideline, which fills a gap.

In a leading article in " The Commercial Motor " for October 13 last, the Editor drew attention to this aspect of what he referred to as commercial transport enterprise. He expressed the opinion that, due to a variety of reasoes which he indicated at some length, there will be a considerable extension in this field of activity immediately after the war. s Shortly afterwards he received a letter from a reader asking for some detailed information, particularly with regard to costs and rates and the legal aspect of the matter. following which it was suggested that I should include an article, or a short series of articles on the subject, in " Solving the Problems of the Carrier."

The delay in responding to that suggestion has not been due to any reluctance to proceed, but rather to the fact that, in the first place, other articles were already in hand, and, secondly, that, in the meantime, more urgent problems presented themselves for consideration.

I think I am justified in treating certain other problems as more urgent if only from the viewpoint that this question of hire-car operation is one rather of preparation than of immediate execution. Operators who are interested are not likely to be able to develop their ideas immediately; they can only prepare themselves now for action so soon as the war is over.

The subject of hire cars, generally, is more comprehensive and extensive than its title would at first seem to indicate. There are, in effect, three principal aspects. First comes the taxicab, secondly the hire car, as exemplified in London and the provinces by suoh concerns as Daimler Hire. Ltd., and. thirdly, the " drive yourself " type of operation in which the hirer lets out the car but does not provide a driver.

-There are further sub-divisions to these three main sections, as will subsequently appear. At the moment, there is no point in dealing with the matter in such detail.

Newcomer Riding for a Fall While I was cogitating on the subject there appeared amongst " Passing Comments " in the issue of " The Commqrcial Motor" for December 15, a paragraph stating that, in a southern town, a discharged " unfit !' ex-Serviceman had recently set up a much-needed taxi service and was running three cars. He was charging 6d. per mile.

That, indeed, gave me very furiously to think, and I immediately turned up Table XX of " The Commercial Motor " Tables of Operating Costs, to which I shall frequently have occasion to refer in the course of these atticles. 1 therein discovered that, assuming the man was using a 12 h.p. ,:ar, he would have to cover 1,000 miles per week per vehicle, at least, for 6d. per mile to be profitable I cannot imagine that this newcomer to the industry is running 1,000 miles per week in these days: if he is he must have got on the soft side of the local representative of the Ministry of Fuel and Power and must be getting a very considerable ration of petrol. As I do not think that to be at a:1 likely, then, in my opinion, this operator is riding for a fall. Moreover, as is remarked in the paragraph to which I have referred, there is, in these days of shortage of taxicabs and plentiful demand, not the slightest need for anyone to cut prices.

Another reference in the pages of " The Commercial 111otor " appears in the issue for December 22 in. the form of 'a letter from a Mr. F. J. Boshier-Jones, director of Drivehyre Cars, Ltd., of Newport, Mon. He, as the name of his company indicates, is interested in the business of letting cars out on hire to be driven by the hirer. He gives some interesting information, in particular. that his fleet consists of 100 8, 10 and 12 h.p. Austin saloons.

These, he says, were bought new for the service, and replaced at periods not exceeding 12 months, freqnently much less. He says that they each average 1,000 miles per week. I mention these facts as I shall have occasion to refer to the figures subsequently.

First, a brief reference to a particular phase of the operation of taxicabs. In London. Manchester, Liverpool and other large cities, the operation of such vehicles is, more or less, strictly governed by regulations which stipulate details of construction of the cabs, method of use, provide for the use of taximeters, and specify the fares which may be charged.

I do not propose to go deeply into these matters, as the space required would be out of all proportion to the usefulness of the information provided. As an indication of the length to which I should have to go in order to be explicit and give the information in full detail. I may point out that the " Abstract of Laws " relating to the use of public carriages within the Metropolitan District and the City of London and its Liberties needs a 96-page booklet printed in small type.

Provincial Regulations Less Exacting

In the majority of provincial towns these regulations are less onerous, and, although the fares may be stipulated, conditions as to type of vehicle and other relative matters are not so hard and fast. Readers living in such towns will recognize that that must be so if they compare the types of taxicab they have with those which they use when they are in London and the other cities wl?ich I have men"tioned. With this.'aspect of the matter I &hall be able to deal at some length.

Of the three kinds of information for which the correspondent asked that of cost seems to me to take precedence. Actually, in " The Commercial Motor " Tables of Operating Costs there is given, in Table XX, a full and detailed schedule of operating costs for no fewer than eight different types of hire-car, ranging from 10 11.p. to 40 h p. These costs are given for various weekly mileages from 200 to 1,600 inclusive.

In addition, figures are given for earnings per week and per mile, also for those various wee,kly mileages, and a table showing how to calculate costs of jobs which are worked on a tinie and mileage basis. It will be worth the while of any operator of hire cars, or any prospective operator, to purchase a copy of the Tables, for, besides this detailed data about costs and charges, there is also a mass of other valuable information on cost; genera:1y, and on operating costs and rates for all types of commercial vehicle. The price of the booklet is 2s. 2d. post free, and it can be obtained on application to the Editor of " The Commercial Motor."

I am not, however, going to content myself by referring the operator to these Tables and leaving it at that. I propose to deal in some considerable detail with the matter of costs, but not, however, in respect of so many types of vehicle, nor am IL going to go so extensively into various weekly mileages. I am going to take three typical examples of hire car, one of 12 h.p., another of 16 h.p. and the third of 40 h.p., and show, in the first place. average figures for the cost of operating such cars, and, secondly, how the operator should correct my figures so as

to bring them into line with his own .personal experience, bearing in mind that the figures 1 give must inevitably be averages and, therefore, do not, of necessity, agree with the actual costs as incurred by all individuals. _ Take the case of a 12 h.p. car which is licensed as a hackney carriage to carry in excess of four people. First, the standing charges. Taxation comprises the' Road Fund tax of £12 per annum plus, in the ease of taxis, the local acenaing fee, which varies and for which I have taken an average of AI. The tdtai is thus £13, which is equivalent to 5s. 2d. per Week to the nearest penny.

_For the standard wage I propose to take an average figure of £3 16s, per week, which is eufficient to cover, the average wage paid, plus the three insurances, which are 'National Unemployment, National Health and Workmen'e Compensation; this figure also provides for a week's holiday with pay.

appreciate that the wages paid vary considerably, there being no standard and still less a statutory rate such as i

'prevails n connection with road haulage. It is probable that the wage§ paid in London and some other large cities will be considerably in excess of my figure, but in small towns the total Might be less.

Garage rent I. put down as 5. per %teek, again emphasizingthat this is an average over the whoie country; it is :ikeiy to be insufficient in some parts and ample in others. The average figure for insurance I have taken at 16s. taa per Week; that rises to 18s. in London -and certain other large cities, bnt_falls to .15s._ in the country.

The final item in this list of standing charges is interest on capital outlay. For that I have assumed the vehicle win cost £300, and, at 4 per cent.. that is equivalent_ to 412 per annum or 3s. per week.

. Justiflcatior for Interest Charge

It may be important to explain' What precisely is the point in .including the 'term interest in vehicle-operating costs. The justification for it is that the amount spent on the vehicle could have been invested in another direction and might possibly bring in the amount of £12 per annum. so that, until the operator has recouped himself on that account he cannot justifiably claim that he is making a profit on the operation of the vehiCle.

It, is, perhaps, necessary to emphasize that there is na connection between this amount for interest and interest as applied to hire-purchase transactions. The latter .is, in no sense of the word, an operating cost, and must be paid for Out of the profits of the business. •

have taken £300 purchase price as being an average figure which operators will have to pay, after the war, for the 12 h.p, car, of the popular type, so largely used in provincial town:, for taxicab and hire-car work. Turning new to, the running costs. First, as to petrol.

The consumption may vary 'from 22 to 23 m.p.g., the former for taxi work which involves usually short runs and comparatively high consumption: the, latter for hire cars which run farther between stops and do not, as a role. consume petrol at so high a rate. For oil consumption I have taken 1,000 m.p.g., or .06d. per mile.

I have assumed that a set of tyres wi:1 cost about kl18 and will run somewhere between 8,000 and 9,000 miles per set. In this I am assurding tyres of present-day quality. In that case, the cost per mile wi:1 be 0.52d.

Those who-are familiar with " The Commercial Motor " Tables of _OperatingCosts, to.which I again refer readers who are interested in the subject of this article, will know that, in those Tables, it is the practice to divide maintenance into two parts. One, referred to in the Tables as Maintenance (d), is routine maintenance, that is, it is carried out at stated intervals of time, more or less irrespective of_ mileage. 'That will include washing and polishing end provision for repainting or rece:lulosing. The totalaliowanece for this approximates to 15s. per week, of which, possibly, 10s. may be taken as the expenditure on washing and polishing, the ba'aince of 5s, being set apart as provieien far subsequent expenditure on repainting.

An Average Mileage of 400 at, Now-, it 15s. per week, the cost per mile, if the vulacle runs 400 miles per week, is 0.4d., but if the %Thiele runs 801 miles per week it is 0.2d. For the purpose Of this article I propose to take it that the average mileage is 400, which gives me a figureof 0.4d.

Maintenance (e) is the other half of this item and refers to the expenditure on repairs and provisione for major .over and so on. The allowance for this is at the rate of Ad. per mile. Operators will, appreciate that, in the case-. of a vehicle covering. 400 miles' per week tide amouats to

£40 per annum .

Depreciation also is an amount which varies sornewhat in accordance with the weekly, mileage. It will be agreed that in the .case of a vehicle which does but a small mileage per week there will be, first, a depreciation allowance for wear and tear which will be assessed on the basis of the mileage run, and, secondly, some provision for obsolescence, for, in the case of a vehicle eloing a small weekly mileage, it wi:I become obeolete before it be worn out.

In the case of this 12 lap. vehicle we are considering, which is assumed to tost 2300, then the depreciation. including obsolescence, running 400 miles per week, is 1,20d. Here, again, I would refer readers to " The Commercial Motor " Tables of Operating Costs for supplementary information relating to the Allowance to be set apart on account of depreciation in the case of Vdhicles covering mileages greater or less than 400 per week. S.T.R. • (To be continued.)


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