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THE HAULIERS' INQUIRE WITHIN.

24th June 1924, Page 24
24th June 1924
Page 24
Page 25
Page 24, 24th June 1924 — THE HAULIERS' INQUIRE WITHIN.
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Which of the following most accurately describes the problem?

Hire Cars in London and Provinces : Cost and Probable Revenue,

IHOPE those who have been asking me as to the prospects of employment in, and concerning the steps to be taken in order to enter, the business of taxicab driving in London are satisfied with the material which has been presented to them in the three preceding articles, it is true, perhaps, that I have not devoted a great deal of attention to the actual prospects of employment, but have taken the line of showing what minimum profit may be expected, provided that a man has reasonable luck.

The chances that a man will experience reasonable luck are, in my opinion, as good, in this business of taxi-driving, as they are in any other business just now, which is equivalent to saying that they are none too good. I think, however, I am on the safe side when I state that, with energy and initiative, coupled with the exercise of a little politeness and the recognition that a passenger is for the time being the employer of the driver of the taxi, even if the driver happens also to be its owner, there is still plenty of scope for new entrants into this business.

Now, I do hope I have made it quite clear that no ordinary hire car has any chance of being allowed to ply for hire on London streets, or on those of Liverpool, Manchester, Glasgow, Birmingham, and other leading towns and cities. They cannot do so because they do not comply with the constructional regulations which are in force in those places. On the other hand, the ordinary taxicab is not well adapted for private hire work, for the simple reason that, although it will seat, and is licensed to seat, four persons, two of the four have to be content with seats which are somewhat lacking in comfort, whilst the other two, on the more comfortable cushions at the rear, are incommoded by the nearness of the passengers in the front seats, London cabs are the worst in this respect, those in the provinces being generally a little better, because their overall diniensiona and the space inside the body exceed those which obtain in London.

In the smaller provincial towns—in places, for exampIe, such as Shrewsbury—there appear to be no very stringent rules about the construction of cars which are permitted to ply for hire, and anything from a " flivver " to a lordly Lanchester limousine may be used for the purpose. It follows, therefore, that the functions of a taxicab and a private hire car are in such districts interchangeable, and it is no uncommon thing for a car to be a taxicab one minute and a private hire ear the next. Indeed, in the provincial vernacular, the one term—taxi—covers both uses.

Logically and strictly speaking, we should, on account of this difference in habitude between larger and smaller towns, treat separately the two classes of hire cars—those which may and do ply for hire, and those which may not or do not so ply. In plain actual fact, however, the difference is one with which we need not concern ourselves any more than we already have done, for, in considering the profit and loss accounts in connection with the operation of these cars we have chiefly to keep in view the weekly mileage, and, in particular, that proportion of it which is run for fares, and, above all, we have to keep before us the importance of maintaining that mileage at a maximum.

An Interchanging Cab and Hire Car Business.

If, therefore, it is a ear operating as a private hire car only, in the suburbs of some large town or city, the mileage will be kept up to a reasonable figure there is a sufficient car-hiring clientele to allow of it ; if it is one being used, in and about a smaller town for both purposes, then we shall have to keep in mind that circumstance and the fact that, to make both ends meet, some system must be devised to enable the car to be on the rank as a taxicab when there is demand for cabs, as often as may be, without interfering with the private hire branch of its activities.

The first thing which the prospective hire-car owner will have to decide for himself is the class of car he is going to buy. Should he get a new one or a second-handi A 30 h.p. three-quarter landaulet costs a thousand pounds, new. A used car of the same type can be had for fifty pounds. The man who buys the latter is simply buying trouble : the real question is, need he buy the first, for there is obviously a middle course.

Now, it is not so. absurd a proceeding as it looks, this laying down of a cool thousand for a car to use for hire purposes. In order that we may get a fairly clear idea of the comparative merits, from the business point of view of the two propositions—new car or good second-hand one—I propose to go into figures about them.

If he buys a new car the owner has to face heavy depreciation and interest charges, for although in commercial vehicles we have been accustomed to reckon depreciation per mile, practically irrespective of the age of a van or lorry, we cannot do the same with a touring car of any kind, because such vehicles depreciate very considerably merely by becoming second-hand. A ear which is bought second-hand has already suffered that depreciation, which does not recur. In view of that fact, the prospective hire-car owner must make up his mind, in the first place, on this question of new or second-hand as a matter of policy. Is he going always to present a spotless, spick-and-span new car to his clients, or will he be content to offer them one which, although still, by virtue of his own hard labour, spick and span, is nevertheless a second-hand one and invariably to be distinguished as such, even by the uninitiated/ This question must be decided first. If he favours the " new " proposition, then he is committed to the policy of selling his car again after a short period, replacing it by another. If he is in doubt, then, . he had better buy good second-band, for it is unwise to lay down a big capital sum on a new car with the idea of keeping it for ever. He might as well buy ontawith the first year's depreciation taken off it.

• In order to get the figures on a comparative basis, T shall have to vary my usual practice and to calculate the budget of profit and loss over the period of a year. I shall assume a mileage of 12,000 per annum, of which 10,000 is actually paid for at the rate of Is. 3d. a mile. average. I shall assume the depreciation to be at the rate of 20 per cent. per annum on the new car. The costs will then work out as fellows, :—Petrol 260, oil and grease 25, tyres 230, sundries 210, -repairs 240, licence 230, insurance 225, rent and rates 225. The total of the items errnmerated is 2225, so that, as deoreeiation alone is 2200, its importance is very real. There are still

three items : establishment (say 220, since they do not amount to much with a car which is ownerdriven), wages and interest on first cost, which are 2150 and 250 respectively. The grand total of all these items is 2645.

The revenue on 10,000 miles at Is. 3d. is 2625—a book loss of 220 a year. The complete statement has not, however, been made. The owner gets the wages —2150 a year, plus the interest, 250, plus tips, less 'the 220 loss.... The last-named will no doubt be made up by tips and extras of one sort or another, so that really he has 2200 td live on and has put 2200 by— the depreciation—towards a new car. At the end of the fourth year he has 2800 put by and possesses a well-kept, well-found ear, only four years old, which has a market value of from 2400 to 2600. Let us assume 2500, and that he sells it for that. He thee has a thousand for his new car and a balance of 2300. There is also the interest which has accrued on his depreciation account, amounting to about 275—total 2375, which, spread over the four years, is 293 15s a year additional profit. These figures are, of course, affected by the mileage, by the charge per mile, and the percentage of dead mileage. I know of London suburban hire-car owners who do 20,000 miles a year, who charge only a shilling a.nuile, but who make no dead mileage whatever, every mile travelled being paid for by the hirer. In such a ease the net return will be a thousand pounds, putting a far different complexion on affairs, as the profit, over and above wages and interest on first cost, then amounts to 2355 a year. The prospective entrant into this business must count up his chances : how many race meetings are there each year that will appeal to people living in his district, how many weddings, football and cricket matches, etc., and what are his prospects of country runs: do the people in his district go often to dances and theatres, and do they own their own cars? All these things and others besides—runs to the station, etc.—must be considered in the endeavour to estimate the probable mileage that will be covered and the resultant revenue.

THE SEOTCIT.


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