Taxi Operation

Taxi Operation

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Taxi Operation segment provides for-hire vehicle transport on British roads. This includes the use of hackney carriages (black cabs) and private-hire vehicles, limousines, executive cars and wedding cars. The industry also includes companies that exclusively provide related services, such as radio operators and taxicab owners. However, ridesharing companies are not included in this industry.

The Taxi Operation industry has displayed a mixed performance over the past five years. Overall, revenue is expected to fall at a compound annual rate of 7% over the five years through 2021-22. At points throughout the period, industry revenue was supported by strong economic conditions, such as growing business confidence and disposable incomes. Furthermore, though also presenting increased competition for taxi operators, technological disruption in the form of ridesharing apps encouraged the greater use of industry services. This development boosted the number of operators, although it reduced the average fare. In 202-21, industry revenue is anticipated to have declined significantly as a result of the COVID-19 (coronavirus) pandemic.

In times of economic uncertainty, consumers and businesses limit their spending, which often lowers the demand for taxi services. Therefore, there may be opportunities for growth over the next five years as the economy reopens and recovers from the COVID-19 (coronavirus) pandemic.

(Ibis World,2021)

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Market Size: £5bn
Industry Employment: 328,586
There were 67,900 licensed taxis in 2020, a 3.9% decrease from 2019
There were 230,900 licensed PHVs in 2020, a 4.4% increase from 2019

(Ibis World, 2021)

(Department for Transport, 2020)

Industry
Challenges

  • Economic uncertainty caused by the pandemic limiting consumers spending
  • Driver Shortage in the UK
  • Drivers moving into the food delivery industry for better employee benefits
  • Expensive Fares
  • Emerging Competition from Air-Taxis start-ups planning to launch electric vertical take-off and landing (eVTOL) passenger vehicles in the next 3 years.

(Ibis World,2021; CNBC, 2021; Daily Mail UK, 2021; E&T,2021)

Investment
Opportunities

  • Emphasis on pre-booked journeys as early post-pandemic travel arises
  • Comprehensive App-based services
  • Services that offer choice and personalisation to the customers

(London Post, 2021)