Green SME Interview: Alex Hurst, Phoenix Taxis
Alex Hurst is the CEO of Phoenix Taxis based in Blyth Northumberland which currently has the biggest operational fleet of electric cars in the UK. In this revealing interview he tells the story of the business and some important insights into running a green business in the real world. It includes the first case I’ve come across of a sustainable decision being made in response to supplier pressure, rather than customer pressure.
What’s the history of Phoenix Taxis?
Phoenix taxis was started in 1990 by my Dad. Since then we’ve operated within the licensing restrictions of what was Blyth Valley in South East Northumberland. From 1990 to 2009, the company steadily grew to 80 cars. Since then, when the restrictions were relaxed, we were able to expand to the rest of Northumberland and since 2010, when I joined the business, we’ve managed to more than double in size to over 200 vehicles.
And when did the shift to low carbon vehicles happen?
The first step was the Nissan LEAF being the first widespread consumer EV available on the market. We kept an eye on it as, before me, my Dad has always used alternative fuels – LPG instead of petrol or diesel because of the cost savings. When the LEAF came onto the market, the subsidies from the Government made it a cost effective option as a taxi. We then had to get it licensed as a taxi.
We had a lot of trouble as it is quite small – many Councils including Northumberland refused, but we got on to Nissan who persuaded them to grant a license – I’m exactly not sure how! We got funding for six charging posts to accelerate the process, but they didn’t work. That held us up for 6-12 months because we couldn’t get more cars – we were limited to the two LEAFs we had bought in 2012 until the infrastructure was sorted.
However it was about this time, with just a couple of EVs and a couple of hybrids, that we realised that there was a customer demand for sustainable transport particularly amongst large corporate clients. We now have 41 hybrids and 32 EVs – that’s the biggest operational fleet of EVs on the road – I don’t know how long that will last when people cotton on to it!
So, the business case evolved from cost saving to customer demand?
And you’ve now got a Lexus Hybrid and a Telsa Model S – did that come from customer demand?
We got a new Danish taxi dispatch system and the company demanded we have a Tesla – they’re very particular about who they work with and they are very into sustainable transport – they want to get away from the dominant model of large diesel cars. So we went to Denmark to try out a Tesla there and it fitted with what we wanted to do. We hope the Tesla in turn will open up new executive markets for us. It is a very closed market and hard to find a unique selling point – but nobody else has a Tesla.
So is sustainable transport a personal issue or is it an entrepreneurial interest?
It has definitely come from the entrepreneurial angle, but both feed into what we have done. Before I joined the business I didn’t appreciate the impact our business has on the environment. A client asked us for statistics on how many miles we had done for them and co-incidentally the software we used showed the carbon emissions as well. I realised that this was a hell of a lot – a serious impact on the environment.
From a more personal point of view, we are going for ISO14001. No customer is asking for it, but we want to streamline things here in terms of our impact. The interesting thing is that the consultant who is doing it really attacked us for the garage, which was something I had never considered before – waste oil and that kind of thing.
What are the big challenges you face?
Two main challenges. The first is infrastructure. We bought three rapid chargers ourselves – which aren’t cheap – we have two on site here and one at Newcastle University with who we have a partnership. Northumberland County Council have a network of rapid chargers for public use, but they’re constantly threatening to start charging for them. Paying a flat fee would remove the economic advantages of EVs, but that’s a fight we’ll have with them.
The second challenge is perception, particularly amongst drivers, but also some customers. Taxi drivers as a whole don’t generally like change, so if we introduce anything new, whatever it is, it always goes down badly. We’re prepared for that, but particularly with EVs, all sorts of cynicism and scaremongering goes on amongst drivers. Some customers think they’ll kill people because they are too quiet. If a normal car breaks down, which with a big fleet isn’t abnormal, nobody notices. If an EV breaks down or is involved in a collision, people think they’re unfit for the road.
How do you go about getting over that with the drivers?
First of all, driver selection – some drivers just wouldn’t be up for it. There’s no point fighting a battle you can’t win. If we give most drivers the choice, they’ll pick the hybrid as they don’t have to plan their journeys in the same way. We provide financial incentives – so for EVs hired by corporate clients, we don’t put any administration charge on the job that we would on our other vehicles. They also save money on fuel – we don’t charge them for electricity at any of the charge points, although that might change as the fleet grows.
Once they drive the cars, they find that not only are they saving them money, but they’re also the best cars they’ve ever driven. Just getting them in the cars is the best way to do it. We give each potential EV driver a test drive for a couple of hours with the business development manager to learn the ropes. There is training out there for EV drivers but the cost is astronomical for this kind of business.
Do you think it’s worth it?
100%. The growth in our business since 2010 is in a large part down to having a sustainable outlook. In terms of corporate clients, they wouldn’t even have heard of Phoenix Taxis if we didn’t have that sustainable outlook.
Are competitors starting to cotton on?
Fortunately, no, but that won’t last for ever. However, you can’t just get out of bed one morning and say “I’m going to have an EV fleet” – it doesn’t work like that. It’s a lot of effort to do it and a lot of money up front. You need experience, you need contacts, you need to know how the vehicles run.
What are you most proud of?
Dealing with some of the companies which we deal with, because of sustainability. For example Accenture and Bond Dickinson are two fantastic companies operating in the North East. Everyone in the taxi industry in the North East is aware of the privilege of working for those firms. We’re sole supplier for Accenture, the largest private sector taxi contract in the North East. It’s a great source of pride for them to have such faith in us.
What your advice to others be?
Do it properly. People can see through BS. It becomes abundantly clear pretty quickly if you are offering an old fashioned product and trying to dress it up as green.