Questions Answered
Page 65
Page 66
If you've noticed an error in this article please click here to report it so we can fix it.
AREADER at present employed as a p.s.v. driver in the North West says that he is considering entry into p.s.v. operation on his own account and asks for advice as to procedure and the operation costs in respect of a 31-seater coach with petrol engine.
At the outset, it must be emphasized that entry into p.s.v. operation—and particularly at the present time—is a matter not to be undertaken lightly. In addition to the financial outlay involved, competition in this field is keen, not only from existing operators but possibly even more so from the evergrowing number of private motdrists. Any application for the appropriate p.s.v. licence would almost certainly be strongly opposed by existing operators, although this is not to imply that there is a complete bar on newcomers. But it does mean that the new applicant must have an extremely strong case of public need before his application can succeed.
Although already a p.s.v. driver, this reader states that he has no knowledge of the procedure necessary to obtain a licence and asks for advice in this respect. As an introduction to this subject, it would be advisable for him to obtain a copy of leaflet PSV)A, which is a memorandum for the guidance of persons using motor vehicles for the conveyance of passengers for hire .or reward. It is available from the office of the local Traffic Commissioners. After this leaflet has been perused, the prospective applicant should then engage a legal adviser if he intends to proceed with his application.
COST OF OPERATION Dealing now with the likely operation costs of a 31-seater coach, an average outlay, when fitted with petrol engine, would • be £3.450.
As the reader intends to engage in private-hire work and not stage-carriage operation, the licence fees incurred will include hackney carriage, public-service vehicle licence and certificate of fitness. Allowing for the annual proportion where the fee is for a longer period than one year, the total annual licence cost is £24 6s., the equivalent of 9s. 9d. a week. As with the other four items of standing costs, this latter calculation has been based on a 50-week year, to take account of two weeks a year when the vehicle may be off the road because of major overhauls or driver's holidays. Such provision would apply to most operators but additionally, in relation to the type of work this reader envisages, there may be seasonal spells when the vehicle is not operating. Such further adjustments to the weekly standing costs can, however, only be made by individual operators in the light of their own experience.
Unlike the situation which applies in general haulage, there is no overall national wage rate for all p.s.v. drivers. Particularly does this apply to coach drivers. Their work is not only • seasonal but often involves considerable overtime at week-ends and possibly with one or two days mid-week at the basic minimum hours. Consequently it is practically impossible to arrive at an average working week, inclusive of overtime, based on the whole year other than in the light of experience. Rather than make such an attempt here, driver's wages will be based on a basic 42-hour week, averaged as between the several national wage rates as now apply with additions 'It respect of National Insurance contributions and an appropriate allowance to permit holidays with pay.
Rent and rates in respect of garaging the coach will be assessed at the equivalent of £1 6s. a week. Vehicle insurance for this 31-seater is estimated to cost £90 a year, or Li 16s. a week. Interest charged at a nominal rate of five per cent on the initial outlay of £3,450 adds the equivalent of /3 19s. a week, so giving a total of £19 Is. 8d. for these five items of standing costs. Still assuming a 42-hour week, this would be equivalent to a standing cost per hour of 109.04d.
Similarly, there are five items of running costs and the largest —fuel—is reckoned to cost 4.90d. per mile. This estimate is derived on th" assumption that petrol is purchased in bulk at 4s. Id. per gallon and that a rate of consumption of 10 m.p.g. is maintained. Lubricants add 0.24d. and tyres 1-04d. a mile assuming a cost per set of £174 and a mileage life of 40,000.
Maintenance is estimated to cost 3-05d per mile and depreciation 4-40d. based on an estimated vehicle mileage life of 200,000, but with some adjustment to allow for possible obsolescence which is particularly prevalent in connection with coach operation. In this instance it is understandable that this prospective operator can have no reliable estimate as to the likely average weekly mileage, bearing in mind that this may well fluctuate substantially between summer and winter. Nevertheless, some estimate has to be made if operating costs and subsequently charges to customers are to be formulated, and is figure of 400 miles per week as an average throughout the year is assumed. But at this relatively low figure some allowance must be made for obsolescence, even though the vehicle may still be in good mechanical condition. An addition of 25 per cent is therefore made to the cost of depreciation, so giving the figure of 4.40d. as already mentioned.
The total running cost is then 13-63d. per mile, or £22 4s. 4d. per week. Added to the standing costs, this gives a total operating cost of 25.08d. per mile, or £41 16s a week. These estimates, however, represent solely the cost of operating a particular vehicle and before charges can be assessed, additions are necessary in respect of overhead or establishment costs and profit margin. Allowing an addition of 20 per cent in both cases, the minimum charge for this 31-seater, petrol-engined coach would then be 35.11d. a mile or £58 10s. a week, still assuming an average of 400 miles a week.
In coach operation, however, there may be many types of jobs where there is a substantial amount of standing time, for which reason it is often more prudent to quote a combined charge of time plus mileage. In this case the charge per hout would be 152,66d. plus 19.08d. a mile.
RECORDS EXEMPTIONS Exemption from the keeping of records is the subject of another inquiry.
The Goods Vehicles (Keeping of Records) Regulations, 1935, Section 5 of Regulation 6, stipulates that no holder of a licence is required to keep records (i.e. log sheets) in respect of the driving by him of any vehicle authorized under that licence on journeys which are in no way connected with any trade or business carried on by him.
More specific exemptions relate to farmers' vehicles within 20 miles of depot, showmen's vehicles, vehicles used for carrying Royal Mail or vehicles up to 16 cwt unladen weight operating within a five-mile radius. Difficulties which can arise from a haulage driver joining a company during holiday time, in relation to the amount of holiday then due to him, arise from another query.
The appropriate regulations are set out in the Road Haulage Wages Regulations R.H.(74) commencing at paragraph 29. It is here stated that in addition to the customary holidays (i.e. bank holidays, etc.), an employer shall between May 1, 1963 and October 15, 1963 allow an annual holiday to every worker in his employment for whom the R.H.(74) Regulations apply and who was during the 12 months immediately preceding the commencement of this holiday season in his employment for any of the periods specified. There then follows two tables relative alternatively to six-day and five-day workers. In the former case a period of at least 48 weeks' employment entitles the employee to an annual holiday of 12 days. At 44 weeks the allowance is 11 days and with corresponding reductions for every four weeks down to a minimum of four weeks with a resulting holiday of one day_ For the five-day workers, the total allowance is 10 days and subsequent reductions of one day for every five weeks less than the maximum of 48.
It is important to note that this regulation dealing with annual holidays categorically states that "an employer shall . . . allow a holiday . . " and therefore payment in lieu of a holiday is not permissible, even if both parties were in agreement.
Although in these days " holidays " and "holidays with pay" are virtually synonymous, nevertheless a separate regulation covers the payment of holiday remuneration. The whole of such remuneration is based on the amount which the driver will be entitled to receive from his employer at the date of the annual holiday for the basic working week (which at present happens to be 42 hours) exclusive of overtime.
Obviously where the individual qualification for holiday justifies 12 days in the case of a six-day worker and 10 days for a five-day worker, the holiday remuneration will amount to twice the basic weekly rate.
For periods which were a proportion of the full amount the six-day worker would be paid one-sixth of that amount for each day he was entitled to a holiday and the five-day worker, one-fifth. All such holiday remuneration must be paid on the last pay day preceding the annual holiday. Alternatively, where a worker ceases to be employed, accrued holiday remuneration must be paid immediately on termination of employment pro rata to his qualifications.
PETROL OR OIL A reader engaged on the distribution of animal feed stuffs in the West Country, asks for a brief comparison of 7-tonner costs when operated 400 miles a week as between oil and petrol-engined versions.
Whilst allowing for variations as between individual makes, an average initial outlay with standard platform body would be approximately—petrol £1,242, oil £1,383; operating costs per mile—petrol 21.58d., oil 20.10d., or alternatively as operating costs per week—petrol £35 19s., oil £33 10s.
THIRD-PARTY COVER Recent instances of insurance companies going into liquidation have resulted in inquiries as to the position regarding thirdparty insurance.
Regulations governing third-party liability constitute Part 6 of the Road Traffic Act, 1960. Regulation 201 requires that users of motor vehicles must be insured or secured against third-party risks. Whilst the requirements as to the issue of insurance certificates are commonly known, the alternative provision contained in Regulation 204 is not so. In order to comply with the requirements of this part of the Act, a security must be given either by an authorized insurer or by some body of persons carrying on in the United Kingdom the business of giving securities and has deposited with the Accountant General of the Supreme Court the sum of £15,000. Additionally, an undertaking must be given to make good in the case of public service vehicles up to £25,000 and in other cases not less than £5,000.
Bankruptcy, etc., of insured or secured persons is dealt with in Regulation 208. Despite such bankruptcy the liability of persons to be insured as required under this Act is not removed and it is consequently their responsibility to re-insure forthwith.