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Transportation Research Procedia 44 (2020) 240–247

LOGI 2019 – Horizons of Autonomous Mobility in Europe

LOGI 2019 – Horizons of Autonomous Mobility in Europe
Alternative Taxi Services and their Cost Analysis
Alternative Taxi
a
Services and
a
their Cost Analysis
a
Kristián Čulíka*, Alica kalašováa and Zuzana Otahálováa
a
Kristián Čulík *, Alica kalašová and Zuzana Otahálová
University of Žilina, Faculty of Operation and Economics of Transport and Communications,
a
Department
University of Road
of Žilina, and Urban
Faculty Transport,
of Operation andUniverzitná
Economics 8215/1, 010 26
of Transport andŽilina, Slovakia
Communications,
Department of Road and Urban Transport, Univerzitná 8215/1, 010 26 Žilina, Slovakia

Abstract
Abstract
Modern information technologies are reaching all sectors, including the transport. In recent years, some new “alternative” modes
Modern information
of passenger transporttechnologies
appeared inare reaching
European all sectors,
cities. including
One example the new
of this transport.
type ofIn transport
recent years, some
is using new “alternative”
a digital application modes
to call
of passenger
a taxi with atransport
driver whoappeared in European
can transfer from cities.
one toOnefourexample
persons of tothis new type
a chosen of transport
location with aisprice
usingknown
a digital application
before to The
starting. call
alegislation
taxi with ina driver
Slovakiawhohascannot
transfer from one to prepared
been sufficiently four persons to a chosen
for such types oflocation
mobile with a price known
applications. beforethey
Therefore, starting. The
had been
legislation
operating forin aSlovakia
short timehasonnot
the been
edge sufficiently prepared
of the law. Since Aprilfor2019,
suchlegislation
types of mobile
connectedapplications. Therefore,
with taxi services wasthey had been
changed. This
operating for a the
paper analyses short time on costs
economic the edge
and of the law.
profits Since
of this newApril
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of taxilegislation
service with connected
a vehiclewith taxi aservices
without wasthat
taximeter changed. Thisa
only uses
paper
digitalanalyses
platform.the economic costs and profits of this new type of taxi service with a vehicle without a taximeter that only uses a
digital platform.
© 2019 The Authors. Published by Elsevier Ltd.
© 2020 The Authors. Published by Elsevier Ltd.
This
© is an
2019 open
The accessPublished
Authors. article under the CC BY-NC-ND
by Elsevier Ltd. license https://creativecommons.org/licenses/by-nc-nd/4.0/)
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
This is an open access
Peer-review article under the CC BY-NC-ND of thelicense https://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review line:
underPeer-review
responsibilityunder
of responsibility
the scientific committeescientific
of thecommittee
LOGI 2019 of –the LOGI 2019
Horizons – Horizons of
of Autonomous Autonomous
Mobility in Europe.
Peer-review
Mobility line: Peer-review under responsibility of the scientific committee of the LOGI 2019 – Horizons of Autonomous
in Europe
Mobility
Keywords:in Europe
Taxi service; mobility; digital platform; taxi
Keywords: Taxi service; mobility; digital platform; taxi

1. Introduction
1. Introduction
The big advantage of the digital platform is precisely the fact that the passenger knows the price in advance. In
theThe bigplatform
digital advantage of (formerly
Bolt the digitalTaxify),
platform is precisely
there may be athe fact that
situation the passenger
where knows the
the price changes price
during in advance.
transport. This In
is
the digital platform
case when Bolt (formerly
passengers Taxify),
change their there may
destination be a situation
during transport.where the price most
This happens changes during
often transport.
if several This is
transported
the case do
persons whennotpassengers
have a commonchange their
goal. destination
Currently, during transport.
the platform This
does nothappens most often
allow setting if several
multiple transported
targets, so it is
persons do to
appropriate notsethave a common
the nearest, i.e. goal. Currently,
the first the on
destination platform doesSubsequently,
the route. not allow setting multipleortargets,
the passenger driver so it is
himself
appropriate
enters a newtodestination
set the nearest, i.e.application.
using his the first destination on the route. Subsequently, the passenger or driver himself
enters a new destination using his application.

* Corresponding author. Tel.: +421 41 513 3524

* E-mail kristian.culik@fpedas.uniza.sk
address:author.
Corresponding Tel.: +421 41 513 3524
E-mail address: kristian.culik@fpedas.uniza.sk
2352-1465 © 2019 The Authors. Published by Elsevier Ltd.
This is an open
2352-1465 access
© 2019 Thearticle under
Authors. the CC BY-NC-ND
Published license https://creativecommons.org/licenses/by-nc-nd/4.0/)
by Elsevier Ltd.
Peer-review
This line:
is an open Peer-review
access underthe
article under responsibility
CC BY-NC-ND of thelicense
scientific committee of the LOGI 2019 – Horizons of Autonomous Mobility in Europe
https://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review line: Peer-review under responsibility of the scientific committee of the LOGI 2019 – Horizons of Autonomous Mobility in Europe

2352-1465  2020 The Authors. Published by Elsevier Ltd.

This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review under responsibility of the scientific committee of the LOGI 2019 – Horizons of Autonomous Mobility in Europe.
10.1016/j.trpro.2020.02.047
 Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247 241
2 Čulík et al. / Transportation Research Procedia 00 (2019) 000–000

2. Taxi service

The most important legislation in the field of taxis is Act No. 56/2012 Coll. about road transport, which also
regulates the rules of business in road transport and taxi service and the operation of dispatching. According to that
law, the operation of a taxi service is a business whose object is the provision of transport services to the public by
road motor vehicles that are type-approved for that purpose as Poliak (2012), Rievaj and Synák (2017) and Kalašová
and Krchová (2013) say.

2.1. Concession

Road Transport Act says that only the concessionaire may operate a taxi service. It authorizes it to offer transport
services and to conclude passenger transport contracts. The concession also entitles the carrier to operate a
dispatching center. More information are include in literature from Kalašová et al. (2014), Konečný et al. (2017) and
Rievaj and Šulgan (2008).

2.2. Concession

Every driver who wants to drive for any of the digital platforms (e.g. Uber, Bolt, Hopin, etc.) from 1st April of
2019 must hold a taxi driver's license. The amendment to the Road Transport Act has brought some simplifications.
Table 1 shows the conditions for issuing a driver's license before and after the amendment of the Act.

Table 1. Conditions for obtaining a taxi driver’s license

No. to 31 March 2019 from 1 April 2019

1 holding of a driving license for at least 3 years holding of a driving license
2 legal capacity legal capacity
3 medical fitness medical fitness
4 psychological ability psychological ability
5 integrity integrity
6 competence -
7 minimal age of 21 years -

Source: authors

2.3. Taxi vehicle

Using a digital platform makes it easy to set a shipping price without using a taximeter. Requirements on the
vehicle are following:
 the vehicle must be registered in the concession,
 the vehicle must be on the right front door and inside the taxi in a place visible to the passenger at the
standard fare; this does not apply if the price is agreed before the transport begins,
 the vehicle must be fitted with a detachable TAXI roof lamp of any color except blue, red or orange,
 there must be a copy of the concession in every vehicle in use,
 each vehicle in service must have a taxi certificate.

Every driver who wants to drive for any of the digital platforms (e.g. Uber, Bolt, Hopin, etc.) from 1st April of
2019 must hold a taxi driver's license. The amendment to the Road Transport Act has brought some simplifications.
Table 2 shows the conditions for issuing a driver's license before and after the amendment of the Act.
242 Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247
Čulík et al. / Transportation Research Procedia 00 (2019) 000–000 3

2.4. Taxify platform

The digital platform ‘Taxify’ was founded in 2013. It was an Estonian startup. After six years of existence, the
company was renamed Bolt (Fig. 1) nationwide on 7 March 2019 as the company's service portfolio has expanded
over time.
In the Slovak Republic, the importance of the Taxify platform increased especially after the imposition of the ban
on operation for Uber, which on March 27, 2018 at 22:00 stopped its activities in Bratislava. However, despite the
similar purpose of the two platforms, the Taxify platform could continue to operate.
Bolt currently operates in the following regional cities of the Slovak Republic: Bratislava, Košice, Nitra, Prešov,
Banská Bystrica, Trnava and Žilina. There is a presumption of an increase in interest in this service, as shown by
some studies from Poliak and Konečný (2008), Poliak et al. (2018), Kalašová et al. (2016) and Poliak et al. (2014).

Fig. 1. Original logo, new logo and Bolt application. Source: authors

3. Cost analysis of taxi service

In order to approximate the critical point of profit expressed as a minimum number of trips per month, it is
necessary to calculate the costs associated with the operation of the taxi and also revenues.

3.1. Costs

All costs described and calculated below are based on real skill with taxi business establishment. The most
important costs are as follows:
a) Fuel costs
This is the real price calculation, so the long-term fuel consumption data of the Dacia Sandero with 0.9 TCe
engine in petrol + LPG configuration were used. The average value of the vehicle's consumption is determined as
the average of the consumption for 25,761 kilometers travelled during one year of vehicle operation (Rievaj et al.,
2016).

Table 2. Specific vehicle fuel costs.

Dacia Sandero - Fuel consumption statistics from 8-4-2018 to 11-4-2019

Fuel Value Total price Distance Consumption Costs
LPG 1758.96 956.10 25759.1 6.83 3.71
NAT95 220.47 285.41 25759.1 0.86 1.11
Total 1979.43 1241.51 25759.1 7.68 4.82
Unit [l] [€] [km] [l/100 km] [€/100 km]

Source: authors
4 Čulík et al. / Transportation Research Procedia 00 (2019) 000–000
Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247 243

b) Tire costs
It is very difficult to estimate the service life of a car tire in kilometers, so it is estimated it to be 4 years of use.
The price of one 185/65 R13 tire is from 35.60 to 132 €. Tires with the best energy label at € 66.60 were selected for
further calculation purposes.

𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 ∙ 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 4∙66.60

𝑁𝑁𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 = = = 5.5500 [€⁄𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚ℎ] (1)
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 ∙ 12 4∙12

In this case, the monthly tire costs were determined by a simple conversion (1) to € 5.55 / month.

c) Vehicle depreciation
We assume that the vehicle's service life is 250,000 km. When this distance has elapsed, the vehicle price will be
zero. The depreciation of the vehicle is calculated according to formula (2).

𝑣𝑣𝑣𝑣ℎ𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 12 078

𝑁𝑁𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 = = = 0.0483 [€⁄𝑘𝑘𝑘𝑘] (2)
𝑠𝑠𝑒𝑒𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑖𝑖𝑖𝑖 𝑘𝑘𝑘𝑘 250 000

d) Maintenance and repair

Easy Service costs 649 €. It is service for the first 5 years or 100,000 km. In addition to contractual repairs, also
additional oil changes are calculated in relationship (3).

𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑜𝑜𝑜𝑜 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆+𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑜𝑜𝑜𝑜𝑜𝑜 𝑐𝑐ℎ𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 649+5∙30

𝑁𝑁𝑀𝑀𝑀𝑀𝑀𝑀 = = = 0.0032 [€⁄𝑘𝑘𝑘𝑘] (3)
100 000 𝑘𝑘𝑘𝑘 100 000

e) Vehicle tax
Motor vehicle tax is regulated by Act No. 361/2014 Coll. The annual tax rate for a vehicle of category M1, i.e.
passenger car depends on engine displacement (table 3). In this case, the engine displacement is 898 cm3, i.e. the
annual tax rate is 62 €.

Table 3. Annual motor vehicle tax rate for category M1.

Engine displacement in cm3 Annual motor vehicle tax

from to
- 150 50
150 900 62
900 1.200 80
1.200 1.500 115
1.500 2.000 148
2.000 3.000 180
3.000 - 218

Source: authors
f) Motor Insurance
The costs are from a real insurance contract from 2019. The costs are therefore 60.60 €/year.

g) Accident insurance
The costs are from a real insurance contract from 2019. The costs are therefore € 158.32/year.
244 Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247
Čulík et al. / Transportation Research Procedia 00 (2019) 000–000 5

h) Technical and emission check

The costs of technical and emission check depend mainly on the periodicity of the controls. Taxi vehicle must
undergo technical and emission checks every year (1-1-1). The commercial prices of checks are from. The total price
for both checks under (4) is € 66 per year.

i) Expressway e-ticket
An expressway e-ticket is not necessary for taxi services, but the Bolt platform does not exclude suburban out-of-
town transportation. This is a fixed cost of € 50 per year.

j) Telecommunications services
The Bolt platform is mainly used in the urbanized region of regional cities of the Slovak Republic, so a 4K
mobile operator SIM card with coverage of 4G and 3G networks in Slovakia. This € 8 package includes 1 GB of
data on foreign networks and 10 GB of data on 4ka network.

k) One-off costs
This cost item includes one-off costs incurred in setting up a taxi service. This includes the following costs:
 Criminal Record 3.90 [€]
 Driver card record 4.00 [€]
 Driver's health check 20.00 [€/5 years]
 Driver's mental check 20.00 [€/5 years]
 Concession 15.00 [€/10 years]
 Taxi driver’s license 25.00 [€/10 years]
 TAXI roof light 16.10 [€]
 Magnetic Vehicle Marking 28.00 [€]
 TOTAL 132.00 [€]

l) Parking costs
Parking cost for the chosen car are 50 € for parking place in Žilina.

𝑜𝑜𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 50

𝑁𝑁𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 = = = 4.17 [€⁄𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚ℎ] (4)
12 12

In addition to the above cost items, other costs need to be considered in some cases. If the taxi operator is only
self-employed, he must pay insurance € 66.78 per month in the first year of business. If the taxi operator is a full-
time student, the state pays the insurance, so this cost will not be included in the following calculations.
The following table quantifies and, in some cases, estimates the costs to be taken into account by each taxi
operator. It is basically a case study where the carrier (concessionaire) is also the driver of a taxi, not having set up a
limited liability company or doing business under someone else's concession. In Table 4, costs are classified as
follows:
 F - fixed costs,
 Vkm - variable costs depending on distance travelled,
 Vhod - variable costs depending on time.
6 Čulík et al. / Transportation Research Procedia 00 (2019) 000–000
Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247 245

Table 4. Values of specific costs of the example vehicle. Source: [authors]

Label Name Type Value Unit Calculation Unit

a Fuel costs Vkm 4.82 [€/100 km] 0.2316 [€/ride]
b Tire costs F 5.55 [€/month] 5.5500 [€/month]
c Vehicle depreciation Vkm 0.0483 [€/km] 0.2321 [€/ride]
d Maintenance and repair F 50.00 [€/year] 4.1667 [€/month]
e Vehicle tax F 62.00 [€/year] 5.1667 [€/month]
f Motor Insurance F 60.60 [€/year] 5.0500 [€/month]
g Accident insurance F 158.32 [€/year] 13.1933 [€/month]
h Technical and emission check F 66.00 [€/year] 5.5000 [€/month]
i Expressway e-ticket F 50 [€/year] 4.1667 [€/month]
j Telecommunications services F 8 [€/month] 8.0000 [€/month]
k One-off costs F 132 [€/2 years] 5.5000 [€/month]
l Parking cost F 50 [€/ year] 4.1700 [€/month]
∑F: 56.2933 [€/month]
∑Vkm: 0.4636 [€/ride]

Source: authors

3.2. Revenues

It is quite complicated to estimate the revenue of the application in the future, as the efficiency of the vehicle use
after logging into the digital platform depends mainly on the number of active customers - passengers. Even if we
know the number of customers that can be served in a certain period of time, it is not possible to estimate how far
each passenger will be transported. For this reason, the average revenue was calculated from list of rides before 1st
April of 2019, when the fares were almost identical. The value of one ride is approximately 2.69 €, so T = 2.69
[€/ride] (Varjan, 2014).

3.3. Break-even point

In order to determine the break-even point, it is necessary to determine when the balance between revenues and
costs is (Poliak, 2012; Poliak, 2013; Poliak et al., 2014). It is therefore necessary to determine the variable x from
(5):
𝑦𝑦 = 𝑇𝑇 ∙ 𝑥𝑥
𝑦𝑦 = 𝐹𝐹 + 𝑉𝑉𝑘𝑘𝑘𝑘 ∙ 𝑠𝑠 ∙ 𝑥𝑥
𝑇𝑇 ∙ 𝑥𝑥 = 𝐹𝐹 + 𝑉𝑉𝑘𝑘𝑘𝑘 ∙ 𝑠𝑠 ∙ 𝑥𝑥 (5)

where:
 x – number of rides per month [rides/month]
 y – costs/revenues [€]
 T – revenue per ride [€/ride]
 F – fixed costs per month [€/month]
 s – total distance per trip per trip [km/ride]
 Vkm – variable cost [€/ride]
246 Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247
Čulík et al. / Transportation Research Procedia 00 (2019) 000–000 7

2.69𝑥𝑥 = 56.2933 + 0.4636 ∙ 4.80𝑥𝑥

2.69𝑥𝑥 − 0.4636 ∙ 4.80𝑥𝑥 = 56.2933

0.46472𝑥𝑥 = 56.2933

𝑥𝑥 = 121.13 = 122 [rides/month]

Now, it is possible to perform a very simple but accurate graphical analysis, i.e. figuration a break-even point in
the graph (Fig. 2).

Fig. 2. Graphical representation of even-break point. Source: authors

As can be seen from the graph, yields rise very slowly. This is mainly due to too low fare rates, respectively high
commission of application. It should be noted that if the driver, at the same time as setting fares and at the same cost,
has to pay 122 rides per month, all the time that will be 'on-line' will be lost and will not receive any financial
compensation.
For scientific contribution of the paper was necessary to prepare the economical calculation for other examples of
cars. We chose a typical Bolt car - Škoda Fabia with two different engines: 1.9 turbocharged diesel engine and 1.2
gasoline atmospheric LPG engine (Fig. 3).

Fig. 3. Graphical representation of even-break point for other cars. Source: authors
 Kristián Čulík et al. / Transportation Research Procedia 44 (2020) 240–247 247
8 Čulík et al. / Transportation Research Procedia 00 (2019) 000–000

4. Conclusion

The taxi service as such underwent major changes in April 2019. For existing carriers, the changes meant some
simplification of business, as they are no longer required to demonstrate financial reliability or professional
competence. Similarly, taxi drivers do not need to undergo a proficiency test when applying for a taxi driver license.
The conditions were more difficult especially for drivers of the Taxify platform Bolt who worked in Slovakia on the
edge of the law. Until April 1, its drivers did not meet the requirements for taxis. From this date, all rules apply
equally to all platforms offering taxi services.
From the economical evaluation it is obvious that the revenues from Bolt application taxi rides are so small that
they can pay the total costs only after more than one hundred accomplished rides per month. We compared also
more types of cars. If the driver wants to reach the break-even point, it is necessary to have a car with very low fuel
consumption or engine fueled with alternative fuel.
The Bolt Company is publishing distorted information which can bring drivers to business only when they cannot
do own economical calculation. For example the company deliberately confuses the terms "sales" and "profit". The
business model of the application is very good. The whole responsibility is on drivers and Bolt always has a 20% of
the sales regardless of whether the driver meets all legal requirements.

Acknowledgements

This work was supported in part by the Grant VEGA no. 1/0436/18 - Externalities in road transport, an origin,
causes and economic impacts of transport measures.

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