The industry is travelling well after a recession-induced slump.
London, United Kingdom (PRWEB) July 15, 2012
Fierce competition between taxis and hire cars for passengers has marked the Taxi Operation industry in the five years through 2012-13. Revenue is forecast to decline an annualised 0.1% to reach £8.85 billion in 2012-13. Things are looking up though, as the industry is projected to grow by 2.5% in 2012-13. The Taxi Operation industry is made up of the operators of taxis, private hire vehicles (PHV) and organisations that connect drivers with customers and facilitate the provision of industry services. According to IBISWorld industry analyst Caroline Finch, “competition between industry participants has resulted in a downwards trend in taxi fares in the five years through 2012-13”.
On the volume side of the equation, the recession caused demand for services to falter. The lack of a clear economic recovery has suppressed demand for industry services in the following years. Unsurprisingly, the industry has also felt the pressure of lower profitability. Finch adds, “the data concerning the number of registered drivers and the average wage for the industry suggests that many drivers operate in the industry to supplement another income stream”. The average industry wage is barely enough to live on alone. This aspect of the industry's structure is the best explanation for the swell in driver registrations during the recession. The increase in competition among drivers at a time of decreasing demand for services resulted in losses in 2008-09 and 2009-10, with margins expected to be scant in 2012-13.
The outlook over the next five years to 2017-18 for industry revenue is moderate. Notably, London will host the 2012 Olympic Games, resulting in tens of thousands of tourists flocking to the city to participate and spectate. This will result in a surge in demand for industry services and stronger revenue growth than has been experienced in the past five years.
The Taxi Operation industry is dominated by owner operators and the self employed. As a result, there are no major players in this industry. PHV operators tend to be larger on average than taxi businesses. A lower fare rate for PHV operators means that vehicles need to be on the street for longer hours to generate the same return. The inability of PHVs to pick up passengers on the street means that they incur higher costs through the operation of radio and booking operators. An estimated 80% of taxis are owner-operator businesses. The higher fares charged by the taxi segment enables taxi operators to have their vehicles off the road for periods.
For more information on the Taxi Operation industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
The industry provides for-hire vehicle transport on British roads. This includes the use of hackney carriages (black cabs) and private hire vehicles, limousines and wedding cars. The industry also includes companies that exclusively provide related services, such as radio operators and taxicab owners.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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