The taxi sector in The Netherlands, which depends to 75% of its turnover on contract work in the social sector, is suffering a major crisis. Most of the country’s 40.000 taxi drivers work in this contract area, with only 6.000 working as owner-drivers in the streethail-sector mainly located in larger cities like Amsterdam, Rotterdam, The Hague and Utrecht. In two years the trade’s turnover has dropped from € 2.3 billion in 2011 tot 2.1 billion last year.

Due to major cuts and a restructuring in the social care sector –with municipalities being given a larger responsibility in this area – many companies in the sector have had to lay off drivers and many are fighting bankruptcy. The crisis has even reached national newspapers like De Volkskrant, where director Henk van Gelderen of the Social Fund Taxi (SFT) commented that “as the fees municipalities are paying for these trips are reduced, many companies are reluctant to compete for tenders in this area.” Van Gelderen’s SFT –set up jointly by trade unions and the taxi trade – monitors compliance with social (wage) agreements. He expects more than half the 1.100 taxi companies in the country to write their balances in the red this year.

The situation has been difficult for years, with prices for tenders spiraling downwards, but is now getting dramatic, with 44 companies going bust in the first eight months of 2014 – a third more than in the comparable period of 2013. Recent victims were the oldest taxi company in Holland, and two large regional taxi companies, with 120 and 200 staff respectively. Many companies fell victim to competing for tenders which offered little or no profit margins. Some companies practice price dumping, opting to keep some contracts by undercutting competitors, in the hope of making up these losses in other contracts.

Main culprits are the sharp cuts and the restructuring in transportation for the Social Support Act (WMO). At a recent meeting for members of the national taxi association KNV Taxi, its chairman Bertho Eckhardt, had some harsh warnings: “Be prepared for things getting worse, because the old days won’t be coming back.” Tellingly the association cancelled its annual gala evening and changed it into a sobre event for its members.

Eckhardt also indicated that other types of transport, like for healthcare and insurance companies, are suffering from tightening indications and reduced fees. Many areas of contract work and semi-public transport jobs have been turned over to volunteers. From the point of view of users and taxi companies the traditional social support fabric is crumbling. Taxi companies traditionally depend on government jobs and financing – directly or indirectly. Traditionally taxi companies and their drivers provide a highly-qualified service for elderly people and people with mobility handicaps. The question is whether volunteers can offer the same quality service. One business model looks into having volunteers doing the work, monitored and organized by taxi companies. Having the job done as cheaply as possible, is all that seems to matter these days. That trend worries associations for the elderly and people with mobility handicaps.

In the main cities taxi radio circuits and owner-drivers are suffering from unlicensed competition by UberPOP, using private drivers and vehicles. Previously Uber had been offering UberBlack and UberLux, using licensed taxi drivers and vehicles. A review of the Dutch taxi laws, presently taking place, now envisages including the new ride-sharing opportunities in new taxi laws.

• The main part of the Dutch taxi trade: social care transportation.