• PROBLEMS OF THE HAULIER AND CARRIER.
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How to Get at the Working Costs of Taxicabs.
...Le/ OUBTLESS many readers will say to them
selves that I am always telling the same story. Exactly, I am, because it is the only true story that can be told on the subject ; it applies with just the same force to taxicab running as it does to the use of any other business vehicle. There are many owners and drivers of cabs -to-day who -would be in a better 'financial position if they had given the business side of the question the full consideration that it deserves.,
Roughly speaking, there are three classes of cab' operator—the owner-driver, the hirer-purchaser and the plain hirer. Those in the last category need not concern us at the moment, as they can reckon up their takings and they know their outgoings definitely. Their profit account is simply arrived at by adding up their total income and subtracting their gross expenditure.
The other two types may be considered together in connection with runningand standing charges, as they are similarly placed, with the exception of one or two items. I always draw a line between the owner and the hirer-purchaser, as the first has a definite title to his vehicle, whereas the other cannot sell his cab without definite permission from and arrangement with the vendors and he has additional burdens in connection with the interest items.
'The recording of running costs is a comparatively simple matter, as the bills come in for the goods received and the expenditure is proportional to use. There are five headings under this section which are almost self-explanatory. The fuel item is quite simple to record in that it is merely necessary to file all the fuel bills and to total them up .periodically. The costs of any petrol which may be used for cleaning should be included, preferably in the maintenance section, as it is, 'strictly, more applicable to that department. Lubricants may be treated in the same way as fuel, but, of course, all oils and greases should be written down to this heading as there is no other proper place for them.
Gauging the Cost of Tyre Use.
The annual tyre bill is compiled quite readily-, but a • little point which is often overlooked is in connection with the value of the tyres on the wheels at the beginning and end of the accounting period. If a new tyre be bought in January and worn out in a -few months the whole cost of that tyre obviously must be debited to the ac-counts for that period. On the other hand, if a tyre be purchased in November and at the end of the year is still in service' only a portion of its cost is strictly chargeable to the year's running costs. If the price new of. one cover was, say, £3 and it was only two-thirds worn -out by December 31st only E2 should be _written down to the tyre 'account for the year in respect of it ; the remaining pound should be carried forward to the tyre account for the following year. An annual audit must, therefore, be made in order to give the true figures for the period and to obtain a correct statement 'of affairs for the new year. All tyre repair charges must be included under this heading.
Maintenance is a somewhat comprehensive title and should -cover any charges for repairs, cleaning and other oddments either in the way of labour or material charges. A proportion of the annual repainting and varnishing costs should be added to the closing year's account if an overhaul be due to i
take place n the new year at an early date., If, say, ..-t20 has to be expended in February for maintenance work it is not fair to allocate the whole sum to just over one month's running ; a large proportion should
be debited to the running costs for the previous period.
Depreciation is quite a heavy item, and in many cases inadequate allowance is made for the future. It is surprising that, even in the present enlightened days, some owners make no provision whatever for the purchase of a new vehicle. to replace the present one when its useful life is over. Assuming a period of seven years as the serviceable working •span, due proportion of the first or original .cost of the cab_ must be made. At The end of the seven years the . cab will be worth at scrap price at least say 220, therefore this must be taken into account Turning now to standing charges. We come to the more abstruse matters of finance, but there is really little that need frighten anyone, however doubtful they may be of their mathematical prowess. Licences are obviously a fixed quantity; as there is no variability in, the cost and -the total annual outlay may easily be reckoned up. If the ordinary calendar year is taken as the accounting period there will ee no allowances to be Made at the end et thea'nnual calculations.
The Incidence of Driver's Wages.
Driver's wages . are a straightforward item. but there is a pitfall for the unwary which should he pointed out. If a man owns a cab and does not have an extra driver to do double shift, there is often the temptation to omit the driver's wages altogether, relying on the profit to recompeese the proprietor. The profit should be a return for the money invested in the business and the wages should also be added. by the owner, as they represent his financial reward for the work of driving. If the double-shift principle be employed the extra man's wages must be -added to the sum representing the ownei s services.
Whether the cab is garaged in a separately hired space or in the owner's rented premises, he must provide for an amount to cover the rent and rates of such accommodation. If the garage is his own freehold he should set aside a certain sum annually to meet the dilapidations on the premises and to compensate him for the loss of interest on the price he paid for the building. . The yearly insurance premium is simply calculated, but, if accidental damage be not included in the cover specified, there should_ be an extra allowance for maintenance in the event of those trivial accidents which are bound to happen sooner or later. Interest is a matter frequently misunderstood. If a ,cab costs £700, that amount of money is Paid away and, consequently, the interest which might he gained by the money if invested in some security is lost to the owner, If he simply invested the money, sat still and did nothing, he would earn a certain income. If he, on the other hand, loses the interest and has to work in addition he should provide for the missing cash his yearly estimates.
-Whether the one or two-drivercab system be utilized is a matter for personal choice by the driver. In many instances an owner prefers to have a regular clientele and to run the cab only a limited number of hours per day for longer and specified jobs. On the other hand, if "rank and chance" jobs are relied upon it May be a better paying proposition to employ an extra hand to do the second shift. The cab is bound to be laid up for a certain number of days annually for repairs and repainting ; therefore, In compiling the yearly estimates, the profit allowance should be regulated to coyer this " dead season" S.T.R. e55