The problem
Many private hire firms charge self-employed drivers a weekly fee, and collecting it in cash or chasing bank transfers eats office time. With 25 drivers paying $160£120€143A$230C$226 a week and about 6 minutes each of collecting, recording and chasing, that's 2.5 hours a week, nearly 11 hours a month, and some weeks a driver is 'paying next week'.
What the AI does
GoCardless collects payments by Direct Debit from drivers' bank accounts, with mandates signed online. Its ad hoc payments let you collect any amount at any time under a mandate, with the payer notified in advance, which suits fees that change with each driver's work as well as fixed weekly rent. Raise each driver's payment on the same day each week, and failed payments show in your dashboard. GoCardless's Standard plan is 1% + 20p a payment, capped at $5£4€5A$8C$8 with no monthly fee.
A worked example
A 25-driver firm in Stoke-on-Trent charges each driver $160£120€143A$230C$226 a week. They move collection from cash and bank transfers to GoCardless, raising every driver's payment each Monday.
Before
About 11 hours a month collecting and chasing, and about $160£120€143A$230C$226 a month of fees never collected from drivers who leave owing
After
Payments raised in one batch each Monday; about 1 hour a month on failed payments
What it's worth
About $333£250€298A$480C$470 a month: 10 hours of office time saved at an assumed $17£13€15A$25C$24 an hour, $173£130€155A$250C$244 plus about $160£120€143A$230C$226 a month of fees no longer left unpaid (an assumption). GoCardless fees for 25 weekly payments of $160£120€143A$230C$226 at 1% + 20p, $1.86£1.40€1.67A$2.69C$2.63 each, are about $200£150€179A$288C$282 a month, or about $239£180€214A$346C$338 with VAT if you can't reclaim it.
How to set it up
- Check your driver agreement allows collection by Direct Debit, and update it if not.
- Sign up for GoCardless Standard and send each driver the online mandate link.
- Every Monday, raise each driver's payment for the agreed amount; for fees that vary, send the driver the statement first.
- Check failed payments in the dashboard on collection day and speak to the driver.
- Reconcile payments with your driver ledger weekly, or connect GoCardless to your accounting software.
What goes wrong
- Drivers can cancel a Direct Debit at their bank at any time. Agree in writing what happens if they do.
- Fees are per payment, so weekly collection pays the 20p charge four or five times a month. Compare the cost with fortnightly collection.
- Ad hoc amounts must match your driver ledger. A wrong figure taken from a driver's account damages trust fast.