Recession causes financial distress among Helsinki taxi drivers

Past summer was "worst in living memory"

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Up to a third of Helsinki’s taxi entrepreneurs have experienced payment delays and payment disturbances this year. Professional taxi drivers predict the recession and the increased size of taxi quotas will lead to bankruptcies.
      According to information received by Helsingin Sanomat, at the moment around 500 Helsinki-based taxi drivers are liable for various payment disturbances.
      “That is a wild figure, but I would not be surprised if it turned out to be accurate”, says Kai Rönnholm, who has driven a taxi in the Finnish capital for 30 years.
     
Last summer was “financially the worst one within living memory”. Though Rönnholm still manages to stay afloat, even his business’s net sales were a fifth lower than in 2008.
      “But the newcomers may find it hard. They have to pay back their investments, even though the income level has dropped by about a fifth. Simultaneously the outgoings are still the same.”
      In the course of this year, around a dozen taxi entrepreneurs in Helsinki have thrown in the towel and taken the taxi signs off their vehicles.
      For another fifty entrepreneurs, the balancing of the books is encumbered by unpaid taxes, explains taxi licence inspector Pasi Hautalahti from the State Provincial Office of Southern Finland.
      A further hundred taxi entrepreneurs’ payment difficulties have been registered by the credit information people. The depth of their anguish is difficult to estimate.
     
At the moment there are around 1,500 entrepreneurs holding a cab licence in Helsinki. As late as at the end of last year the State Provincial Office of Southern Finland still granted a hundred new taxi licences.
      According to Harri Savunen, chairman of the Helsinki Taxi Drivers’ Association, the situation is worrying.
      “Everything is not lost just yet, but we are heading in a serious direction. Keeping one’s economy straight is not easy as it should be.”
      Savunen fears that more bankruptcies are still in prospect.
      “This resembles the recession of the 1990s. At that time around 200 taxi entrepreneurs went bust in Helsinki alone”, Savunen recalls.
     
Savunen criticises the State Provincial Office’s decision from last year to increase the size of the taxi quota.
      According to Savunen, the start of the recession was already clearly visible by then.
      Pekka Rintamäki, Head of Department for Transport Administration from the State Provincial Office of Southern Finland, disagrees.
      “I don’t think these matters are interrelated. At any given time a large number of entrepreneurs experience payment difficulties.”
      Rintamäki points out that Helsinki taxi drivers’ net sales are still more than one and a half times higher than elsewhere in the country.
      But this year the capital area's taxi quota will remain unchanged, Rintamäki predicts.
     
According to Kai Rönnholm, a year ago three men were able to get their livelihood from one taxi cab.
      Now one car provides for only two drivers.
      “I suppose I need to introduce some economic stringency measures and put my common-law wife on a diet”, Rönnholm sighs, before driving off to pick up a fare.


Previously in HS International Edition:
  Recession manifests itself in reduced use of taxicabs (17.4.2009)

See also:
  Does swine flu compromise taxi drivers´ occupational safety? (21.9.2009)

Links:
  State Provincial Office of Southern Finland – Taxi Licences

Helsingin Sanomat