how are the Private Hire Industry and SKYLINE's Private Hire Drivers affected by the upsurge in fuel price?

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21 Apr 2022 Homework Help

how are the Private Hire Industry and SKYLINE’s Private Hire Drivers affected by the upsurge in fuel price?

Background

The United Kingdom was rankedin terms of high fuel prices ahead of most countries in Europe, especially those in the European Union, such as Germany, Ireland, France and Austria (Haliloglu and Berument 2021). According to Burman et al. (2021), there has been a consistent rise in the cost of petroleum products, particularly petrol, diesel and gasoline, in the UK, since 2020. In 2022, fuel prices have reached a record high level retailing at 151.6 pence per litre in February(Diesel price UK 2021 | Statista, 2022). Haliloglu and Berument (2021) opined that the trend has also been observed in other European countries, with the product retailing at relatively higher prices in Netherlands and Italy by between 1 and 3 pence per litre. The fuel crisis in the UK has been linked to various causes, including the Covid-19 outbreak, Russia’s invasion of Ukraine and a shortage of truck drivers delivering oil to the UK (Yoon, 2022). According to Kartal (2021), the situation has had significant adverse effects on the UK economy. Therefore, the UK must seek alternative energy sources to avoid overreliance on petroleum products facing fluctuation in prices.

The repercussion of the high fuel prices is expansive and cuts across industries, with the transport sector affected the most(Aljoufie, 2019). Motorists are also experiencing tough times, with a recent study showing that it is currently costing £15 more to fill up a 55-litre car in 2021 than in 2020. Wickramaratne (2020) has linked this trend to reduce the number of hired drivers in the UK. However, this relationship has not been empirically proven, thus leaving an unanswered question on whether there is a direct link between fuel prices and public transport efficacy in the UK. According to Ruiz Estrada (2020), passenger mobility relies significantly on the availability of affordable fuel. Considering that private hire drivers are self-employed, they have no opportunity to spread risks regarding high fuel prices like in the large transport companies and thus are more vulnerable to the ongoing energy crisis in the UK. Nonetheless, Emam (2020) had a contrary opinion positing that the decline in the number of private hire drivers could also be influenced by other factors, including career change or a decrease in demand. Considering the conflicting argument being put forward by various scholars regarding the link between fuel prices and the availability of private hire drivers, it is necessary to carry out a study to establish the impact of increasing fuel prices on the private hire vehicle industry.

1.2. Problem Statement

The ongoing energy crisis in the UK is raising concerns among the users of petroleum products and those in related industries. However, there is no clear evidence of specific causes of this continuous increase in fuel. Moreover, the current decline in the number of private hire drivers in the UK is becoming an issue of interest for passengers depending on these vehicles to facilitate their movement (The Department for Business, Energy and Industrial Strategy (DBEIS), 2021). According to Kouam (2021), this reduction has been associated with the high fuel prices, a concept that has been contradicted by Wincott, Davies and Wager (2020), who argued that a decline in the number of private hire drivers could also be associated with other factors apart from the ongoing energy crisis. Despite the lack of empirical evidence on the cause of the declining number of private hire drivers, this decline is likely to affect the drivers’ income and cost of movement to the customers who use private hire vehicle services. Due to a lack of consensus on the cause of the current decline in the supply of private hire vehiclesand the possible implications of high fuel prices in this industry, the present study seeks to examine the impact of fuel price increases on the private hire vehicles industry, taking the case of the UK.

1.3. Significance of the Study

The study contributes to the existing knowledge by highlighting the significant causes of high fuel prices in the UK. Moreover, the study determines the impact of this high fuel price on the private hire vehicles in the country. This information is crucial to the stakeholders in the transport and energy sectors in the economy; the findings can be used to inform policy formulations towards cushioning the passengers and other users of petroleum fuels in the UK.

1.4. Aim and Objectives of the Study

The current research aims at determining the impact of fuel price increases on the Private Hire Vehicles Industry (TAXI).

1.4.1. Research objectives

To determine factors that influenced fuel price increase in the UK.
To determine the strategies or measures that Private Hire Drivers have employed in adjusting their operation with the upsurge in fuel price.
To explore the implication of fuel price increase on the income of Private Hire Drivers, the quality of Private Hire Car Services, and the safety of passengers.

1.5. Research Question

The project seeks to inform the research question: how are the Private Hire Industry and SKYLINE’s Private Hire Drivers affected by the upsurge in fuel price?