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FIND THE BALANCE: What are the pro’s and con’s when increasing taxi tariffs?



Transport for London’s (TfL) Finance Committee will be asked to approve a series of recommendations that will increase taxi fares in London come April 2024. The focal points of these changes include an 8.92% increase in Tariffs 1, 2, and 3, aligning Tariff 4 rates with those of Tariff 2, a reduction of the Heathrow extra from £3.60 to £2.00, and adjustments to the fixed fares for shared taxis during the Wimbledon Tennis Championships.


These decisions, rooted in extensive consultations and analyses, aim to strike a delicate balance between ensuring fair compensation for taxi drivers and maintaining affordable fares for the public.

What is the positive impact of increasing taxi fares?


The adjustments are set to strengthen the taxi sector in several key areas. Primarily, they address the critical issue of a dwindling number of licensed taxi drivers by potentially reversing this trend. By covering both the increase in operational costs and the rise in national average earnings, the tariff adjustments promise a more sustainable income for taxi drivers. This change is expected to not only retain current drivers but also attract new entrants to the profession, thereby enhancing the availability of taxi services across London.


Furthermore, by simplifying the tariff structure and ensuring consistency across different journey lengths, the recommendations aim to eliminate confusion and inefficiency. This could lead to a more straightforward and user-friendly experience for both taxi users and drivers alike.


What are the negative impacts of a tariff rise?


However, the tariff adjustments are not without their drawbacks. The most significant concern revolves around the potential financial strain on individuals with protected characteristics, such as those with disabilities or the elderly, who might find taxis less accessible due to fare increases.


There's a palpable risk that these fare adjustments could inadvertently marginalise those who rely heavily on taxis for mobility and independence.


The potential negative impacts of increasing taxi tariffs include higher fares for taxi users and Taxicard members, particularly affecting those traveling late at night due to limited alternative transport options. An increase in Tariff 3 could disproportionately impact these passengers. Additionally, if higher tariffs allow taxi drivers to earn the same with fewer hours, the availability of taxis could decrease, leading to longer wait times or difficulty finding a taxi.

Not increasing tariffs, despite rising operating costs, could deter individuals from working as or becoming taxi drivers, potentially reducing taxi availability and disproportionately affecting night-time travellers. A reduction in the number of licensed taxi drivers could also result in increased wait times and reduced taxi availability for all users, especially impacting taxi users and Taxicard members.


Getting the Balance Right


It’s clear that no passenger likes to pay more in fare adjustments, but it's important finding an equilibrium that supports the taxi driver while safeguarding the accessibility and affordability of taxi services for the public, especially the most vulnerable.


The recommendations are a step in that direction, but their true impact will be measured by the experiences of both taxi drivers and users in the months and years to come. As such, continuous monitoring and adjustment will be critical to ensure that these changes are felt broadly and equitably across London.

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