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Kenya Taxi is a small independent taxi company operating in a major city. Kenya Taxi owns 25 taxis which it rents out to drivers on an annual basis. Each vehicle is effectively rented out to three drivers to cover three 8 hour shifts in a day: therefore there are 75 taxi drivers contracted to Kenya Taxi at any given time. Kenya Taxi is a profitable company because it has built up a good reputation locally, and there is always a waiting list of drivers wanting to apply to rent a vehicle. Each driver pays an annual rental fee in advance to Kenya Taxi giving them use of a vehicle for 8 hours a day every day of the year. In addition to the annual rental, Kenya Taxi takes 5% of the money a driver earns every week. Kenya Taxi is responsible for taxing, insuring and maintaining the vehicles. If a vehicle is due for a service or needs to be repaired Kenya Taxi contacts a garage and arranges it. Kenya Taxi keeps an account of the repair and service costs for each vehicle. At the end of each shift drivers give the money they have earned to Kenya Taxi. If they needed to refuel the vehicle, they also submit an expense claim at the end of the shift. At the end of every week Kenya Taxi calculates the amount owing to each driver based on the money earned from fares, the expense claims, and the deduction of 5%. The drivers are then paid.
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