Beating the rise in fuel costs

Ushering in the new year was not just a set of parties and festivities but also increases in public transport costs and fuel (via the fuel duty and the increase in VAT) – The Scotsman referred to it as New Year fuel duty rise leaves lorry drivers facing ‘a £95m hangover’ and The Independent also mentioned that the situation could get worse due to a potential spike in the price of oil – and the price of fuel has gone up 20% in the last two years as highlighted in this BBC article. In The Independent article, the Freight Transport Association was quoted as saying that these price rises would see lorry drivers paying an additional £1,200 per year in fuel costs. The Daily Mail suggests that motorists will need to pay an additional £255 per year to run their cars.

Obviously this is concerning for those who drive and those that provide transport services; however this also needs to be seen in the context of the massive inefficiencies across the transport sector. One of the terrible statistics is single occupancy in vehicles which averages 60% (and 84% for commuting) which is crazy. Price rises could be ‘combated’ by increasing charges to customers, which then just serves to compound the inflationary pressures created by the VAT and fuel duty increases. The better solution is to look at where efficiencies can be generated. Given the scale of inefficiencies within the industry (30-40% empty running/ dead mileage for taxis and road freight), the real answer is to address this which can happen very easily, whether it be driver training, more efficient fuel products or technology solutions that help better match up demand and supply, which is obviously at the core of what our technology does. Continued price rises will also start to change the equation around the cost-benefit of switching to hybrid technology and coupled with the announcement about subsidies to purchase electric vehicles will potentially see some interesting developments in this direction. This is of course accompanied by significant capital expenditure so really the short term solution and the easy wins are around driver training and technology.

I appreciate the concerns that motoring associations and industry commentators have, but the reality is that the transport industry is immensely inefficient and has a massive environmental impact – the way to deal with this is to seriously implement more sustainable ways of travelling and nothing else is good enough.