I had the opportunity to take a taxi to the Orlando airport this morning. As is my habit, I like to talk to everyday ordinary people, especially the ones that meet all sorts of people throughout the day. Some call it nosy but for me it’s a type of intelligence gathering, business intelligence. People on the ground have a better pulse on the economy than the talking heads on television or the politicians. It also interests me to learn about different business models.
In today’s case, I found out that the taxi business model works on a client-client relationship. My driver, Keith, leases his taxi from the taxi company. Thus he is the taxi company’s client. He pays $100 a day for the taxi and can lease it daily or weekly. He also pays for the gasoline, an average of $50 per day. The driver then picks up fares, like me, thus making his fares, his clients.
In my case, my trip was about $25 meaning he has to get at least six fares to break even. Assuming a 30-minute round-trip he works three hours per day just to meet the direct expenses. His most lucrative fares are those from the airport to the tourist attractions that generate him an average of $50 per trip. Although three hours to break even doesn’t seem like much, it does not include the wait time to get a fare. Assuming the most efficient possible day for him, at best he can make anywhere from $150 to $200 a day assuming everything runs perfectly which usually doesn’t and he works a 10-hour shift. That’s a difficult way to make a living but a perfect one for meeting people.
As for the economy in Orlando, it came as no surprise to me that the job market is difficult. According to my driver, his friend is on a job board and goes days without a call. My obvious question to him was how is the tourist market. He said that it has been stable, which is what I had been hearing lately. What is interesting is that he says the tourists are European, especially English, because of the weakness of the dollar. Unfortunately, he said that he is hearing that because of the financial turmoil in Europe the tourist market is likely to decline in Orlando.
The domestic market seems to be feeling the pinch as evidenced by my half-empty flight to Nashville today and a half empty airport. The Asian market has been in turmoil for a while now and now it seems the European market may begin to decline. It will be interesting to see if anyone comes in to fill the void. While Congress is busy fighting over tax revenues, the economy continues to stagnate across a larger spectrum.
Talking heads spend a lot of time analyzing GDP’s and taxing policies but the true pulse of the economy lies in the everyday people in the services industries. Cashiers, taxi drivers and even florists have a better grasp of the economy than the bureaucrats looking at job indices. It is too early to tell if we are about to start a new recession, or if we are already in one, but the boots on the ground feel that it is going to get worse than better.