Monday 19 November 2018

A New Model. A New Chauffeur.


In the last year, DrivenByQ has been through some fairly big technical changes which have mostly occurred in the background. If you were to go back and read through my Chauffeur Blog you would see that acquiring a new account customer lead to a domino-effect. Simply increasing the turnover past a certain point meant changing our VAT arrangement. This lead to the purchase of new company owned Mercedes vehicles and that in turn lead to the hiring of our first ‘employed’ driver.

Not many people know it but the private hire industry works quite differently to most business models. The majority of the time, the cars and drivers are not owned or employed by the company. Instead, they work on a self-employed, sub-contract basis. Historically, DrivenByQ has been the same. Using self-employed drivers who own their own vehicles. The advantage of this is that it keeps costs fixed and it provides a flexible workforce. Additionally (and it may be brutal but) anyone underperforming is quickly replaced.

Minicab offices use the same model and always have done with drivers paying a rental fee (or settle) for their radio equipment. At DrivenByQ we use a commission rate which is proportional to what a driver earns. The difference however between a minicab (or taxi) office and the executive work which DrivenByQ carries out is that a minicab driver will work a shift pattern of up to twelve hours and wait to see what they earn - which is sometimes very little. An executive driver will know in advance what they are working and will only work when required.

The real separation between the two models is that a minicab (taxi) office will have drivers ready to go ‘on demand’ whereas the executive company will struggle to cover jobs at short notice. This was the industry standard until a few years ago when digital disruptors (like Uber and Deliveroo) arrived in the market. They attracted a new kind of person to the industry who demanded conditions more akin to a traditional type job. Comparing earnings to hourly rates of pay resulted in legal claims being made and over time, the government’s response was to publish the Taylor Review.

The outcome of this report was to recommend more people be employed on an hourly rate where they could also receive worker’s rights. I am proud of the fact that DrivenByQ has always paid some of the best rates to self-employed drivers and they have in turn been able to invest in nice vehicles. This summer however, with the purchase of company owned vehicles and a change in the way we reclaim VAT, we spent time constructing a bespoke ‘contract of employment’. We then took on our first ‘employed’ driver who has sick pay, a set hourly rate and a holiday entitlement.