Co-operative models can help drive up standards for Taxi drivers in Wales

Working conditions for taxi drivers do not have to suffer with the introduction of digital platforms in the taxi industry. Co-operative models can offer customer convenience whilst maintaining employment standards. It can be win-win.

Uber has made headlines in recent weeks following London Transport’s decision not to renew their London license. Uber was deemed to not be a “fit and proper” private car-hire operator. Alongside this issue Uber is also seeking to overturn a ruling ordering it to give drivers basic employment rights. Drivers working for Uber are treated as self-employed and are not entitled to rights such as sick pay or the minimum wage.

Those working for other taxi operators can face a similar squeeze on their rights and working conditions. While not formally employed by taxi operators they are often obliged to work for a single operator. They have little control over their hours of work and face sanctions if they turn down work, often regardless of the long hours already worked. Drivers also pay significant fees to operators and sometimes find themselves working longer hours to cover this. This has a knock-on effect on the service passengers receive. Concerns have been raised about the standard of background checks in addition to the training and support that drivers receive.

But there is an alternative that can empower taxi drivers, drive up working conditions and see improved services for customers. Forming a co-operative can provide a solution to some of these challenges, by bringing together self-employed workers to strengthen their position in the labour market and help reduce their outgoings.

Worker co-operatives such as Union Cabs in Wisconsin are owned and controlled by their employees. This gives the drivers far more say in the business, from day-to-day concerns through to major strategic issues. Union Cabs was established in 1979 following a dispute between workers and an established operator. Its core values are to create living wage jobs in a safe, humane and democratic environment while providing quality services. Unlike the industry norm where drivers lease their vehicles from the company and receive the daily difference from fares and tips, Union Cab owns all the cars and allows drivers to work on a commission system ranging from 36 to 60% of the total. Union Cab pays a living wage and allows drivers to chose the hours that they work. Unusually for this industry, the drivers also receive health insurance.

Closer to home, City Cabs in Edinburgh is an example of taxi drivers coming together to form a co-operative. City Cabs has over 400 members. They decide the rules and regulations and also decide the number of hours they work with no sanctions. Drivers own their own vehicles and pay a one-off membership fee alongside monthly radio dues. Their radio dues help to cover combined costs such as back office staff and operating systems. However it also covers the cost of life assurance, death in service benefits and the cost of the discount system the organisation employs with hotels and other tourism related businesses in Edinburgh. This means that the drivers still receive the total fare and the discount offered for repeat custom is covered by the co-operative through the radio dues.

There is significant potential for the development of platform co-operatives that would combine convenience for consumers, offering similar functions to ride-sharing platforms such as Uber, but also result in a better deal for taxi drivers.

Taxi drivers across Britain are coming together to form co-operative alternatives to Uber. Taxiapp London is a non-for-profit owned directly by taxi drivers themselves and developed with the aim of offering an honest, trustworthy service that puts customer and driver welfare at the forefront. It allows passengers to book and pay like they would through Uber but rather than a fixed price that can be subject to surges the fare is decided by the meter. An online co-operative platform app owned by taxi drivers is also being developed by drivers in Bradford and Leeds with support from the New Economics Foundation.

Driver owned and controlled co-operatives alongside emerging platform co-operatives offer an exciting opportunity to empower drivers and improve standards in the industry. But they’ll need support. There is currently a gap in the provision of development support to co-operative businesses at pre-start and start-up stages when many of these taxi drivers will need support.

Our recent research with Co-operatives UK and Unity Trust Bank explored the potential of trade union and co-operative solutions for self-employed workers. This found that the interests of self-employed workers are not well represented in national policy-making, with the result that they face unnecessary regulatory barriers. These burdens need to be addressed to help the circumstances of many self employed workers.

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