Updated: Dec 17, 2021
Taxi apps are outside of Transport for London’s (TfL) regulatory remit says Mayor of London, but is aware of the taxi trade’s concerns over extra fees charged by taxi hailing apps.
Conservative London Assembly Member Keith Prince asked the Mayor of London to provide the taxi trade with a ‘substantive response’ to the issue of taxi app fees originally promised by TfL management back in July 2019.
“TfL is aware of the concerns from the taxi trade about the fees charged by taxi apps and is clear that, for journeys in Greater London, taxi drivers must not charge a fare which exceeds the maximum displayed on the meter.”
Cabbies across the UK remain divided over whether licensed taxi drivers should be able to charge extras on top of the metered fare.
As demand for both taxis and private hire vehicle (PHV) services increases, the contentious option to charge customers more than base rate fares to guarantee them a vehicle, splits the sector in two.
The PHV sector, most notably the global app operators, have used the model of ‘surge charging’ for several years when the service demand outweighs the supply of vehicles available. Being unregulated they have more flexibility to charge what they like, when they like. It’s then up to their customers to accept the price or look for alternative transport instead.
But what do licensed taxis do during extreme demand?
On the street and on taxi ranks the passenger only ever pays the metered fare. Tariffs are already set to encourage cabbies to earn more when demand is traditionally higher at the weekends or later at night. It’s a trusted long-standing system that works for both the driver and passenger when it comes to hailing a taxi.
Away from the street, on taxi hailing apps and account platforms, it’s different. Because the price can be advertised to the passenger before the booking is confirmed, extras have been added for several years.
According to a short online poll it was 50/50 as to whether licensed taxi drivers should charge for extras. This included ‘run-ins’, booking fees and priority fees, but the poll excluded airport drop-off and pick-up fees as an extra.
In the 1990’s, radio circuits who held accounts with most of the big multi-million-pound companies operating would charge ‘run-in’ fees on top of the metered price to secure a taxi for its employees. It was a way of hailing the nearest taxi remotely which drivers at the time welcomed and companies were willing to use when required.
The method of charging passengers the cost of the ‘run- in’ has all but gone in the UK, but it is still used in other European countries to this day.
Since the introduction of ride-hailing apps in the early 2010’s ‘run-in’ fees were removed in a bid to compete with cut-price fares being offered by newcomers like Uber. Instead, taxi companies were forced to offer fixed price fares BELOW the estimated meter cost to win account work.
Fast forward to post-pandemic and demand for licensed taxi services has returned. Prior to the latest Omicron restrictions, black cab booking apps had seen a huge surge in demand leaving taxi drivers struggling to cover demand. It is also worth noting that fixed price fares have now been dropped in a bid to entice drivers to accept the work offered.
FREE NOW introduced reward schemes to entice taxi drivers to cover more work on their platform too. However, with street work busy, the option of paying no app fees and running no dead-miles to the pick-up destination could mean operators may continue to struggle for driver coverage digitally.
So how can taxi operators ensure those that need a black cab, get a black cab? In recent years Gett have introduced a ‘Tech’ fee, which is essentially a booking fee, to be paid on top of the metered fare during times of high demand. The fee, which is capped up to £15, allows customers and drivers the option to pay or receive the fee for a priority booking.
And here lies the big point of contention because obviously some passengers who regularly use the black cab service and see themselves as loyal customers are unwilling to pay more to prioritise themselves a cab. However, it’s also worth remembering that many customers ARE willing to pay a booking fee to secure a taxi.
The same goes for taxi drivers working on the platform too. Some are comfortable receiving the extra payment, some less so.
The street hail and metered pricing should never change. It’s a regulated price based on the IMMEDIATE booking of a service that protects both the driver and passenger. However, what happens BEFORE the passenger enters the taxi and how that passenger locates the cab is still very much up for discussion.
In a previous discussion on the topic of taxi app regulation, Khan said in February 2020: “To regulate taxi app-based services would require legislative change, as there are no provisions within the current regulatory framework.
“This was recognised by the Department for Transport-commissioned Task and Finish Group on taxi and private hire licensing. In the Government’s response to this group it noted that it was not minded to bring taxi apps into the licensing regime.
“For journeys in Greater London, taxi drivers must not charge a fare which exceeds the maximum displayed on the meter.
“Transport for London has not prosecuted any taxi drivers for “charging passengers more than the metered fare for trips within the GLA area” in the last 12 months.”