Black & White companies owe $20m amid taxi sector woes

Three failed companies linked to Black & White Cabs owe creditors more than $20 million as the taxi sector continues to struggle with the growing ride-share sector and COVID-19.

THREE failed companies linked to Black & White Cabs owe creditors more than $20 million as the taxi sector continues to struggle with the growing ride-share sector and COVID-19.

Creditors of Melbourne-based Taxi-Link, P2P Transport and TGT No 1 are due to meet January 19 to determine whether they will receive any of their money back after the companies were placed in administration last month.

P2P Transport and related entities oversaw a national network of about 2400 vehicles including chauffeured corporate services and ride-share options.

The Black & White taxi network continues to operate after a recapitalistion but is facing increasing competitive pressure from ridesharing services such as Uber and Ola.

Insolvency specialist Tracy Knight, of Bentleys Chartered Accountants, has told creditors that the companies now in administration faced an “accumulation of disruption” with the introduction of ride share services as well as the impact of the pandemic shutdown.

“The board had made several attempts to achieve a sale of the business which were unsuccessful,” said Ms Knight.

Black & White Cabs continues to operate, launching on the Gold Coast in November.

“It came to a point that in order to save part of the business, a restructure was required which included placing a number of entities into voluntary administration.”

P2P listed on the ASX in 2017 after raising almost $30m but announced a $20m loss in 2019 as debts continued to mount. Existing finance arrangements with various creditors including Westpac came to an end last April.

Major P2P creditors include the Australian Taxation Office owed $663,776, ABC Bodyworks owed $168,183 and Delta Motor & Automatic Transmission owed more than $800,000.

Black & White Cabs managing director Greg Webb said a recapitalisation and restructure of P2P and the other firms now in administraton had been attempted but COVID-19 had resulted in a 80 per cent loss of revenue across the country. Operations in Victoria and New South Wales were hardest hit amid those state’s extended lockdown period.

“The debt level was unsustainable and the end of the insolvent trading moratorium also was approaching,” Mr Webb told creditors. “It was clear that the organisation could not continue to under its current structure.”

Mr Webb and other investors have unveiled plans to inject $2.65m into the Black & White business as well as taking on all liabilities including staff entitlements.

A deed of company arrangement for P2P and other firms is expected to be put to creditors next week that could include a proposal to pay monies owed.

IBISWorld analyst Yin Huey Yeoh said revenue for the taxi and limousine industry was forecast to have declined 6 per cent last due to ongoing competition from ride-sharing services, bushfires and COVID-19.

“Increasing smartphone penetration has placed pressure on the industry’s established structure,” said Ms Yeoh. “These devices have blurred the line between taxi services and hire car services, providing drivers with new ways to connect with passengers and visa versa.