“Just before the last lockdown, in December, things finally got a little better for me,” said taxi driver Solaiman Ben Mohammed. Not that the demand for rides had increased so sharply, he says – tourism was at a standstill, there were no conferences and events yet and the turnover of the taxi industry was at most a quarter of what was normal before the corona pandemic. But because so many drivers had stopped due to financial distress, the survivors were given more rides. And one of the latter is self-employed person Ben Mohammed, he explains. “My luck is that I had paid off my car. Despite the 80 percent drop in turnover, I was able to keep my head above water.”
The biggest blow to the taxi market fell immediately after the outbreak of corona, in the spring of 2020. The first strict measures to prevent the spread of the virus reduced turnover to virtually zero. Of the 1,250 drivers who drove via Taxi Centrale Amsterdam (TCA), about 850 have survived, says Ben Mohammed. As a board member of TCA, he represents the interests of all drivers affiliated with the corporation. “For drivers with a concession to drive from Schiphol, it was completely dramatic.”
TCA has continuously tried to let its members also benefit from the government support that the plant received, says director Hedy Borreman. For example, by temporarily halving the contribution. For Ben Mohammed, who normally pays 375 euros per month to the exchange, this made all the difference. In addition to his insurance and administrative costs, the membership fee is his only fixed operating expense.
However, for colleagues with a financed car, the support was far from sufficient. Insurance and lease costs for a ‘zero-emission A-class car’ quickly amount to 600 euros per month. In order to recoup the investment in a car of thousands to sometimes 80,000 euros, a driver must be able to drive. Many drivers were faced with a difficult choice: pay or hand in the keys?
“Guys who had no buffer and were tied to a loan or lease contract soon had to give up,” says Ben Mohammed. “The leasing company confiscated their car, the car was sold, the remainder of the debt was for their account. This is how many colleagues ended up in debt restructuring. Colleagues who have a family at home. A lot of damage has been caused.”
Many colleagues have ended up in debt restructuring. A lot of damage has been caused
Everyone for himself
Nationwide, barely 20 percent of the taxi industry consists of self-employed drivers, such as Solaiman Ben Mohammed. For the most part, they serve the ‘boarding market’: passengers board on the street or at a stand. In large cities such as The Hague, Eindhoven and Amsterdam, these drivers must join an Authorized Taxi Organization (TTO). The TCA is one of the seven Amsterdam TTOs.
This obligation does not apply in the rest of the country. Drivers who drive trips ordered via telephone or app – for example via Uber – are also excluded from this structure. For them: everyone for himself.
Of the approximately five thousand active drivers, just under two thousand were organized through a TTO. As far as the TCA has insight into this, about 40 percent of these self-employed have dropped out. The elderly retired earlier, others switched to parcel delivery or became truck drivers. TCA director Borreman still hears about drivers who end up in debt counseling.
The activities of self-employed drivers who are not affiliated with an exchange are out of sight. That is also the experience of Johan Baars, coach at the entrepreneurs sounding board in Utrecht. Over the past two years, Baars has been in contact with about thirty drivers in Utrecht through the municipal initiative Ondernemers Centraal. To offer them a listening ear and to guide them where necessary to get through the crisis. “These men are so committed to their profession that quitting is often not an option, even if it is no longer profitable at all. They save themselves by doing odd jobs in a cousin’s shop or sometimes through questionable jobs.”
price agreements
The 80 percent of the taxi industry outside the boarding market consists of contract companies with drivers in paid employment. They provide transport to and from hospitals, day care and special education. This work is tightly regulated through tenders; price agreements and number of journeys are fixed in detail and for a longer period of time.
The organizations that arrange this transport try to do this as cheaply and efficiently as possible, for example by combining journeys. At the time of the corona measures, the rides were already limited. The journeys that were still there had to be carried out with fewer passengers and therefore proportionally more cars. Costly adjustments.
The passenger transport contract market moved along with the lockdowns and easing. With closed schools there were no rides and no income, staff had to leave.
Wim Leewis had around 75 drivers on the payroll of his regional taxi company in Veenendaal. He now has ten fewer full-time jobs. Leewis’ fleet consists of twenty passenger cars, sixteen vans and fourteen funeral vehicles. The costs of this equipment naturally continued during the pandemic. “Initially, we also continued to pay all salaries, but that soon became untenable.” The older drivers who mainly drove for pleasure, he says, were the first to lose hours.
Leewis could not benefit from aid schemes such as NOW and TVL. His transport company falls under the same BV as his gas station – and that had to do with a decrease in turnover in (reference year) 2019. “Fortunately, our clients contributed ideas,” he says. “But that does not alter the fact that we had to work even more efficiently. In particular, we have started to coordinate the planning of hospital trips and pick-up addresses more closely.”
Working with fewer drivers also had a downside: as soon as schools reopened, Leewis was in short supply.
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Photo Dieuwertje Bravenboer
In search of people, he approached former employee David Aarnoudse (30). It had started for itself in 2017, but in the meantime stopped as a ‘loner’. As a self-employed person, he mainly had to rely on going out on weekends and Schiphol rides at irregular times, and both fell almost silent due to corona. “Unfortunately, until March 2020 I was doing well. I got more and more regular customers and I had just paid off my financing in full.”
When he also missed the peak holiday sales at the end of 2020, he decided to stop. He sold his car well and found a job in customer service at a transport company – which was busier than ever. But, says Aarnoudse: “An office job brings me less pleasure than being on the road with people.”
That is why he was happy to be able to return to his old boss, who hires him as a freelancer. He just doesn’t run ’empty’ discos on weekends anymore, he says. That’s what his former colleagues do. This gives him more time for a social life.
Compensation Plans
On average, turnover on the contract market has fallen by about 20 percent in the past two years. Compensation schemes such as TVL and NOW have been eagerly used, says Bertho Eckhardt, chairman of the employers’ organization Royal Dutch Transport (KNV). That doesn’t mean the suffering is over. “Entrepreneurs who have applied for and received too much must repay.” And the tax authorities may grant a five-year extension to pay the tax debt that has arisen, but that is not an adjustment. Eckhardt: The question remains how and when lost income can be recouped.”
Even now that the corona restrictions have virtually disappeared, the turnover of taxi company Leewis remains at the lower corona level. Director Wim Leewis no longer thinks that the ‘old normal’ is returning. “The bingo evenings have disappeared and I expect the elderly to remain cautious.”
He is preparing that he will not exceed 80 percent of the previous turnover. That is why costs must be structurally reduced: fewer employees, lower accommodation costs. Leewis: “We had a beautiful, large historic building, with huge energy costs by now. Unfortunately we had to sell that. And then we can count ourselves lucky that it was our own property, and that we were able to sell it in this favorable real estate market. Then just park the cars outside and work from a modern and cost-efficient office.”
Two years without growth is not how Leewis learned to do business from school. But, he says: “I’m proud that we still exist.”