1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160 
When Statistics are Misleading
Page 115
Page 116
If you've noticed an error in this article please click here to report it so we can fix it.
THE Annual Reports of the Traffic Commissioners for the year ending March 31, 1962, record a total of 5,249 passenger operators compared with 5,184 the previous year, whilst vehicles show a slight increase from 67,710 to 67,893. Moreover, the several area reports of the Commissioners stress the continuing difficulties facing those engaged in passenger operation.
But alongside the trend of increasing costs and declining revenues in p.s.v. operation revealed by. these Annual Reports, there is still 'a substantial amount of profitable coach work being done both by long established and comparatively new operators. Many have relatively small fleets. Thus, (inclusive. of all types of passenger operation) of the 5,249 operators at March 31, 1962, as many as 3,545 had four vehicles or less, whilst a further 977 had fleets of between five to nine vehicles.
In contrast to the road haulage industry, there are admittedly Many big Passenger operators with fleets of 500 vehicles or more, both private enterprise and nationalized. But this fact slibuld not be allowed to obscure a field of passenger operation Where private enterprise on a small scale' predominates, namely Private hire work, excursions and tours.
Yet, as in haulage, it is essential that anyone contemplating becoming a passenger operator should first make a thorough snrvey of potential traffic and obtain knowledge of licensing procedure and statutory requirements with which he will have to comply. Equally important he must be aware of the operating costs of the vehicles he proposes to use before he can estimate his proposed charges, competitiveness and anticipated revenue.
As required by the Road Traffic Act, 1960, any motor vehicle used for carrying passengers for hire or reward which either is carrying passengers at separate fares, or is adapted to carry eight or more passengers, is termed a public service vehicle. The significance of the alternative qualifications is that a vehicle adapted to carry less than eight passengers and not at separate fares, for example a taxi or hire car when hired as a whole, is not a public service vehicle and therefore does not have to meet the licensing requirements which would otherwise apply.
PASSENGER service vehicles, for the purpose of licensing procedure, are divided into three categories, namely stage carriages, express carriages and contract carriages.
A stage carriage is a public service vehicle which carries passengers at separate fares but is not an express carriage. This latter term is of more limited application in that it refers to public service vehicles carrying passengers at separate fares, none of which are less than one shilling or such greater sum as may be prescribed. The third category, namely contract carriage, denotes a public service vehicle which does not carry passengers at separate fares and for which a contract is expressed or implied for the use of the vehicle as a whole. In layman's terms these three categories of vehicles would respectively relate to local bus services, limited stop or express services and private hire.
Regardless of which three categories applies, a public service vehicle licence must be held for the vehicle 'and, in addition, driver and conductor (where carried) must hold licences for p.s.v. operation. It is also necessary in the case of stage and express carriages to hold a road service licence for the particular service which it is intended to be operating.
As laid down in Section 129 of the Road Traffic Act, 1960, a licence to use a vehicle to carry eight passengers or more (whether as a stage, express or contract carriage) will not be granted unless a certificate of fitness has been issued by a certifying officer of the appropriate licensing authority in respect of the vehicle concerned. Unless previously revoked or cancelled, such certificates continue in force for seven years or for such shorter periods (but not less than a year) as the certifying officer thinks fit.
The fee payable for a public service vehicle licence is £8 10s. and is normally valid for one year. A certificate of fitness costs £5 105. and its validity can vary from one to seven years according to individual circumstances, but it is not invalidated by change of ownership of the vehicle.
Drivers' and conductors' p.s.v. licences are valid for three years and the fee is 3s., whilst there is a badge deposit of 2s. 6d.
FOR the purpose of public service vehicle licensing the country is divided into 10 traffic areas covering England and Wales. and a further one covering the whole of Scotland. Each area is controlled by Traffic Commissioners, comprising three members, one of whom is a full time chairman. Application for any of the licences already mentioned has to be submitted to the. Clerk of the Authority of the appropriate area. In addition to examining vehicles, certifying officers conduct the tests of prospective p.s.v. drivers and application for such tests must be made to the appropriate office of the Traffic Commissioners.
But although it is necessary to have knowledge of the licensing procedure before entering into passenger operation, it represents only the initial hurdle to be surmounted. Subsequently and throughout the life of the vehicle, the necessity of ensuring that such operation is a profitable exercise will persist. The need for an adequate survey of potential traffic has already been stressed, but even this cannot be usefully undertaken unless a sound estimate has already been made of the likely operating costs of the vehicle it is intended to employ.
Accordingly, it will be assumed that a prospective operator is considering setting up in private hire work and is undecided whether to commence with a 41-seater petrol-engined coach in the quantity-produced class, or a 44-seater built on a more expensive chassis and fitted with oil-engine. A comparison of the respective operating costs is therefore given.
Dealing first with the lower-priced vehicle, it will be assumed that the 4I-seater coach costs £4,008 and that an average weekly mileage—throughout the year—of 400 will be maintained.
The standing costs per week in respect of licences are assessed at 1 is. 9d., which amount is derived from apportioning the annual cost of hackney carriage and p.s.v. licences and Ale certificate-of-fitness fee.
In contrast to haulage, no national wage rate is applicable to drivers of coaches, so it will be assumed that the total cost of 'wages to the employer for a basic 42-hour week amounts to £11 8s. 9d. This includes allowances for contributions to National Insurance and employer's voluntary liability insurance, together with an adjustment to permit holidays with pay. Rent and rates in respect of garaging the coach add 17s. 4d. a week. B45
The antival premium payable for vehicle insurance based on a seating capacity of 41 amounts to £102 12s. Od., or the equivalent of £2 Is. Id. a week. Interest charged at a nominal rate of five per cent. on the initial outlay of 14,008 adds £4 Os. 2d., giving a total of £18 19s. Id. for these five items of standing cost. Based on the estimated weekly mileage of 400 the corresponding standing cost per mile is 11.37d.
Relative to this latter figure a warning must be given regarding this all-important factor in vehicle operation, namely, the significance of average mileage-both estimated arid subsequently achieved. Despite fluctuations in trade and seasonal peaks, goods traffic normally tends to be persistent throughout the year despite variations in weekly tonnages. In coach operation, however, there may well be a complete cessation of use for lengthy periods during the off season, even allowing for the growth of theatre parties and similar work during the winter. Consequently, a weekly average mileage derived from an appropriate division of the total annual mileage when applied to coach operation may be substantially less than the actual weekly mileage during the summer months. This difference will have a big effect on overall operating costs. Any estimate must therefore take a realistic view of this variation in average mileages peculiar to coach operation. Assuming petrol is purchased inhulk at 4s. ,1d. a gallon and that a rate of consumption Of 9 m.p.g, is maintained, the fuel, cost per mile will be 5.44d. Lubricants are reckoned to cost 0.25d. and tyres 1.11d. a mile. This is based on a cost per set of £186 and an estimated mileage life of 40,000.
MAINTENANCE is reckoned to cost 3.37d. and depreciation 4.51d. a mile. In order to arrive at this figure, the balance' to be written off is obtained by first deducting the equivalent cost of the original set of tyres from 'the initial price of the coach, with a further deduction in respect of the ultimate residual value. A vehicle mileage life of 200.000 is assumed, but because of the relatively low mileage In this particular instance, allowance will be made for obsolescence.
The total, running cost is therefore 14.68d. a mile. The corresponding running cost per week when averaging 400 miles would be: fuel £9 Is. 4d., lubricants 8s. 4d., tyres £1 I7s., maintenance £5 12s. 4d. and depreciation £7 10s. 4d.
The addition of standing and running costs gives a total operating cost of 26.05d. per mile or £43 8s. 5d. a week. Over a period of five years the total operating cost will be £10,855, which amount compares with the initial outlay. of £4,008.
The 44-seater coach, fitted with oil engine, is estimated to cost £6137 and, because of, this higher outlay envisaged, it will be reasonable to assume that the potential operator has a higher estimated average mileage in mind, say 600 a week.
As before, the various licence fees necessary will be apportioned on an annual basis and because of the higher seating capacity, the total annual amount will now. be £30 16s. or the equivalent of 12s. 4d. per week. Wages remain at £11 8s. 9d. and rent and rates at 17s. 4d. a week. Again because of the higher seating capacity, the annual insurance premium will be increased to £130 4s. for this larger vehicle, with an equivalent standing cost of £2 12s. Id. Similarly, interest charges are raised to £6 2s. 9d. per week. Despite the higher total standing cost of £21 13s. 3d. for this 44-seater coach, compared with £18 19s. ld. for the 41seater, the standing cost per mile is reduced to 8.67d. for the larger vehicle compared with 11.37d. for the 41-seater. This appparent anomaly emphasizes the importance of average weekly mileage, which in this case has been assumed at 600 for the 44-seater and 400 for the 41-seater.
T will still be assumed that bulk storage is available but, with the use of fuel oil in this case, the price per gallon is adjusted to 4s. ld and the rate of consumption to 12 m.p.g. This gives a fuel cost per mile of 4.15d. Lubricants are now reckoned to cost 0.28d. per mile. A slightly higher cost will be allowed for a set of tyres, namely £212 although the same mileage life of .40,000 is assumed. This gives an increased tyre cost per mile of 1.27d., whilst. maintenance is reckoned at 2.92d. per mile.
Depreciation is increased to 5.10d. a rile, adopting the same procedure as before, although on this occasion there will be no allowance for obsolescence because of the higher mileage now anticipated. Also, appropriate to this type of vehicle, the estimated vehicle mileage life is increased to 250,000. The resulting total running cost is therefore 13.72d. per mile or £34 6s. per week. Correspondingly the total operating cost per mile for this 44-seater coach becomes 22.39d. or £55 19s. 3d.
per week when 600 miles are averaged. ,'H.
Because of the differences in average weekly mileage the results obtained in respect of these two coaches are not strictly comparable. Nevertheless, they do emphasize once again the significance of variation .of average weekly mileage. Despite the initial cost being more than 50 per cent. higher -than the smaller. coach (£6,137 compared with £4,008), the total operating cost per mile (22.39d.) for the 44-seater is shown to be less than for the lower-priced 41-seater (26.05d.), due to the difference in average weekly mileage.
The whole of these estimates, however, relate solely to the costs likely to be directly incurred in operating a vehicle. Before charges could be formulated, overhead or establishment costs need to be added. Particularly where coach work is concerned these cOuld add up to a substantial amount for even a small fleet, which would then have to be appropriately allocated to each vehicle. Also, when assessing an equitable profit margin, adequate allowance must be made for the sPasmodic operation inherent in most coach work. S.B.