London taxi drivers have been left ‘disappointed’ by the below inflation tariff increase set to go live later this month.
London taxi fares will increase by 7.61% come the end of April as final recommendations were given the green light by Transport for London (TfL) Finance Committee.
Passengers will see weekday, weekend and night rates (between 10pm and 5am) go up by 7.61%. The minimum fare of £3.80 will stay as it is.
A TfL statement said: ‘We believe this option strikes the most appropriate balance between taxi drivers being fairly paid and taxi users getting fair, reasonable and affordable fares.’
The increase however comes nowhere near the level of inflation which has concerned drivers and trade representatives.
The Licensed Taxi Drivers’ Association (LTDA) were said to be ‘disappointed’ by the decision to only grant cabbies a 7.61% increase.
Steve McNamara, LTDA General Secretary, said in a recent editorial in Taxi Newspaper: “The LTDA supported the trade’s application for the full 11.6% tariff increase. We were as disappointed as anyone when we watched the TfL Finance committee only approve the increased costs (7.6%) part of the application."
McNamara added: “Last week, I wrote to the Vice-Chair of Transport for London’s Finance Committee and Board Member, Ben Story, about concerning comments he made during the Committee’s meeting earlier this month. Mr Story questioned the Taxi Cost Index (TCI) measure used to set taxi fares and determine when increases are needed, and by how much.
“TfL don’t always give us what the TCI indicates (as we’ve seen this year) and that’s another issue, but it’s important that the TCI is used when looking at potential fare increases in future or cabbies could be left further out of pocket.
“The TCI looks at two measures – national average earnings and taxi drivers’ operating costs – the two figures are then added together to provide the total indicated increase. This important measure is used to ensure fares keep pace with inflation, and that drivers can not only meet their costs, but also that their earnings increase in line with everyone else’s.
“Story argued that the TCI should only look at drivers’ costs. To paraphrase, he thought that if costs go up and fares go up, then it’s all fine. This isn’t right. Yes drivers feel the benefit of a fare increase based only on their rising costs, as they can then cover the increased cost of running a cab, but their earnings don’t actually go up, which means they end up worse off in real terms, as the price of just about everything in life from food to energy bills continue to climb.”
Just today it was revealed that inflation has continued at a high rate of over 10%. The Bank of England (BOE) could now be set to raise interest rates again next month which in turn will push the price of taxi finance and mortgages up further. According to money markets there is a 97% chance that the BoE lifts Bank Rate by a quarter of one percentage point to 4.5% in May.
High inflation and rising interest rates are likely to already impact 2024 tariff reviews in a similar fashion, but this time, cabbies will be keen for tariffs to at least keep up with the cost of living.