Addison Lee operating profits lifted by post-lockdown demand

Resurgent demand for taxis from London businesses has helped Addison Lee return to an operating profit, leading its chief executive to declare the company has “ridden out the storm” caused by the arrival of Uber a decade ago.

The taxi company, which provides minicabs, black taxis and courier bookings, on Wednesday said there had been “unprecedented” demand for its services as more people travelled following the end of Covid-19 restrictions.

“Demand has been very strong coming out of Covid . . . as people have come back to the office,” said chief executive Liam Griffin.

Addison Lee reported an operating profit of £12.4mn for the year ending August 31 2022, up from a loss of £8.9mn the year before, according to accounts filed with Companies House.

The company reported an overall pre-tax loss of £2.3mn, including financing costs and taxation, down from £23.2mn a year before.

Griffin said the company benefited from a pivot to focus on corporate accounts, which now account for 75 per cent of its business, up from about 55 per cent in 2019.

The changes, which include a focus on service, reliability and clean cars, have been a reaction in part to the popularity with leisure travellers of ride-hailing apps such as Uber. which first arrived in London in 2012.

“I think a younger demographic has been brought up in the Uber era, and we definitely struggle to attract some of those,” Griffin said.

“We have always pitted ourselves as a slightly premium product . . . we have been able to supply and maintain a level of service where others haven’t been able to . . . we have ridden out the storm,” he said.

Griffin is a veteran of the business his father set up in 1975, and served in senior roles including chief until private equity firm Carlyle bought the business from the family for £300mn in 2013.

The sale came just as ride-hailing apps were beginning to disrupt the London market, and Griffin bought the business back in 2020 “at a significant discount” to the £300mn as part of a consortium of investors led by Cheyne Capital.

The new owners scaled down the business to reduce costs, cutting headcount and refocusing the business on the core market of London following an unsuccessful expansion effort.

At the same time, Addison Lee and its competitors have been forced to significantly raise pay and contend with a shortfall in licensed private hire drivers after the pandemic added to labour market issues sparked by the UK’s exit from the EU.

The number of licensed private hire drivers in London has fallen to 90,000 from 120,000 before the start of the pandemic, and wages for Addison Lee drivers are now about 25 per cent higher than pre-Covid, Griffin said.

The company raised fares before Christmas, but he admitted he was unsure the market could handle more rises amid the cost of living crisis. “Private hire and taxis are borderline luxuries,” Griffin said.