How To Run A Taxi Business: On Fighting Employee Theft

Talking about theft in the taxi business I first need to give you some statistics from psychology, theft-wise. Theft-wise, people are divided into three categories:

The first category is people that can’t steal at all. They can’t steal and they won’t steal ever. If they’re starving and a truck passes by and a loaf of bread falls from the truck, they’ll pick up the bread and chase the truck, trying to give the bread back to the driver. They’d rather die than steal, literally. Out of the whole population, this category is 5%.

The next category: five percent of people that cannot not steal. These guys steal all the time. There are 5% of those who will never steal and there are these 5%, those who’ll be stealing in every possible situation at every possible time. In the taxi business they steal in really stupid ways. It’s the drivers that steal calls and just disappear and the dispatcher can’t find them. The dispatcher will try to give them a $50 call and he’ll not be able to find them, because they’re stealing a five dollar call. They can’t do the math. They can’t see how much they are stealing versus how much they would have made if they were not stealing and if they were working honestly. They’re incapable of doing the math because stealing is everything they think about and that’s the only way they see themselves and that’s the only way they operate in life.

The way to go with these five percent of people is very simple. Such people are really easy to spot. If you spot somebody like this and if you have reasons to believe that they fall into five percent of those who will always steal – kick them out, because there’s nothing you can do to make them not steal. Whatever you do they’ll still be stealing, so the only way to go here is to get rid of them. There’s nothing else that can be done.

The remaining ninety percent, the largest group of population practices what is called “situational ethics.” “Situational ethics” means that sometimes we do steal, sometimes we don’t steal. It all depends on the situation.

Let me give you an example of what I mean by that. Suppose you are shopping at Wal-Mart and your car is parked in the furthest corner of the parking lot far-far away from the store. You’ve got this big Wal-mart cart full of stuff that you bought and you get to your car. Then you realize that the cashier gave you five cents more in change than she was supposed to give you. The question is: will you go back to the store to return the five cents?

Now ask yourself the same question, but what if you had three kids with you and a cart full of stuff? Would you go back to return the 5c?, What if it’s raining outside? What if it’s raining and you haven’t got an umbrella? Would you go back? What if it’s raining and it’s not five cents, but twenty dollars?

We humans make decisions based on emotions and then we supply them with logic, not the other way around. When I was asking you all these questions, first you’d answer yes or no. You'd answer based on how you FEEL. Yes, I would go back. No, I wouldn’t go back. Then you’ll come up with the reasons that support the decision that you made. These reasons would be in alignment with your decision, but it was the decision that came first and reasons that came second. It’s really important to understand that that’s how we humans act. That’s situational ethics.

We first act on emotions and then we supply our emotions with logic. We decide what we want and what we’re going to do and then we explain to ourselves and others why we decided that that’s what we were going to do, though the decision was not logical in the first place. That is why I repeat over and over and over again: find out what your customers want and give it to them. You may come up with an offer backed up with strong logical reasoning, but it’s not about logic! It’s not about needs, it’s about wants!

But let’s get back to situational ethics and the 90% of thieves-r-us. The good news about these 90% is that those of us who practice situational ethics steal when the following three reasons are true at the same time:

Reason number one is that there is a need. It may be a perceived need or it may be a real need. There’s nothing you can do about this reason. Some people have it, some don’t and you can’t change it. It may be that one of your drivers needs more money and the truth is that he can’t possibly make enough money driving a cab, he needs to get a better job. There’s nothing you can do about removing a need from somebody, because even if its money and you pay them more, chances are they’ll want more. They may have bad spending habits and it they make more – they’ll just spend more and still have a need.

Number two is the ability to rationalize stealing. To have reasons that explain why stealing in this specific situation is okay. To be able to explain to himself that though he or she is stealing, they are still a “good person”. For employees of a taxi business this is a really easy task. This is a piece of cake. “I’m working a lot”, “the owner is never in the office,” etc. The sole fact that you are not in the office the time they came in or the time they leave is enough. Now they can say “Hey, you know what? I’m here all the time and this guy just doesn’t even show up here. It’s his business and yet he’s never here. I am always here, but it’s him who’s making all the money”, – that’s a perfect rationalization. And here, again, there’s nothing you can do about it. You can explain them that the margin is not that big. You can explain them that there’s gross and there’s net and these are two different things. It’s not going to help. They’ll find another excuse. They’ll tell themselves that they work more than you do. They’ll tell themselves that they can be stealing because you drive a better car or you live in a better home or your kids go to a better school.

The third reason for someone to be stealing is an ability to get away with it. This is extremely important. As I’ve said, people steal when all three of these reasons come together: they have a need and they are able to rationalize stealing and they think they can get away with stealing.

As I explained, there’s nothing you can do about the first reason, about a need. It’s out of your control. There’s nothing you can do about the second one, about rationalization of actions. It’s out of your control, too. The only one that you have control over is this one: belief in the ability to getting away with stealing. And the good news is that there are plenty of things that can be done here.

If a person that belongs to the 90% of us that practice situational ethics knows that there’s no way that he’ll get away with stealing, he will not steal. Stealing only happens when all three reasons are come together. For stealing to happen there should be a need, there should be rationalization for stealing, and there should be confidence that they’re getting away with it.

Suppose in your taxi company you’ve got somebody from the five percent that steal all the time. All the rest of your guys belong to the ninety percent that will steal if all these three reasons come together at the same time. Now they see that the guy that’s stealing all the time is being able to get away with it and he doesn’t get punished. What will happen now is: those from the ninety percent will start stealing.

That’s why you’ve got to be extremely harsh on that one. Nobody can ever be stealing from you. Even if they have a need and even if they have a rationalization, they’ve got to know that as soon as you find out, and you will find out, they will not be able to get away with it. They will get punished. The probability of you finding out about it is 100% and the probability of them getting punished 100%. That’s the way to fight with theft.

If you’d like more on this subject, I would recommend Dan Kennedy’s book called No B. S. Ruthless Management and Michael Levine’s book called Broken Windows Broken Business.

The latter book is based on an article that first came in 1982 by two criminologists who suggested that fighting really hard even the smallest crimes actually helps to reduce bigger crimes.
The idea behind it is that if you don’t fight small things, like graffiti, it sends a message and bigger things start happening. It starts with graffiti, than it gets to broken windows. If a building is left with a broken window and nothing happens, it again sends a message. It’s really easy to steal from such a building, to burglarize such a building and that’s how being negligent to small things easily leads to bigger things.

If you look at the history – that’s how mayor Giuliani cleaned up New York City. That’s what he was doing. His reasoning was: “I don’t have time, I don’t have resources to go after the big guys, for drug lords, but I can easily find and arrest the small street drug dealer and if we don’t have anybody to sell drugs on the streets, there will be nobody whom the drug lord could sell the drugs to”.

There will be a broken chain in the distribution channel and because of this broken link the whole chain will fall apart. If you look at many successful people, many of them just go ballistic when something seemingly small goes wrong in their business.

One of people who are very famous for it is Donald Trump. If he goes to one of his buildings or hotels and sees that something’s wrong, even if it’s a tiny little detail, he goes furious. I believe that that’s the right way to go. I do not suggest being a freak at all times, but if something happens, even if this something is small, the person that’s guilty for it should not be able get away with it.

Here are some examples of these supposedly little details in the taxi business. For dispatchers it can be a delay in answering the phone calls, not following the script when talking to the customers on the phone, messing up the paperwork and things like that.

For drivers it is not reporting the stops to the dispatcher, stealing calls, even if it’s a $5 dollar call here and there. Some tiny minor things on the first sight, but, really, if you look at it and think about it, these things are not that tiny and are not that minor. These details are pretty important. Again, one of the reasons to pay attention to them is that if you don’t – it’ll lead to bigger things. And you do not want that. You want your taxi service operate like a well-oiled machine. Click here to get a copy of 17 Mistakes You Must Avoid That Can Ruin Your Taxi Business book and 3 best issues of Cab Millionaire Club Letter and get more strategies to learn more about that!

3 Responses to “How To Run A Taxi Business: On Fighting Employee Theft”

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  1. Peter says:

    I have read all of your guidance descriptions and they are very good however, one problem I face in the UK (which I don’t know to be true in the USA) is the fact that due to current and very strict licensing laws in the UK it is very difficult to get drivers who hold a current badge and all the local taxi companies are constantly trying to steal each other’s drivers. When a driver leaves our company a car can be parked up for weeks on end. Sometimes I have found myself in a situation where upon I should reprimand a driver but I am afraid he will walk; I would be interested in hearing your comments on how to deal with this point.
    Thank you, Peter

  2. Dinez Taxis says:

    How about take into consideration the gravity of offense and how many times it was done. There are people who needed second chance.

    Dinez Taxis

    Google ‘Dinez Taxis’

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