If 20p is added to the minimum taxi tariff fare, how does this impact the driver’s annual revenue?

Taxi tariffs are the cornerstone of an industry that supplies vital transport options and is relied upon by many. With the recent cost of living crisis, rising expenses and high interest rates, taxi tariffs are being reviewed across the UK.

But how does a marginal increase of just 20p on each fare affect cabbies?

First up, the revenue generated from a 20p increase on the minimum fare starting amount, also known as the ‘flag fall’, largely depends on the number of rides a taxi driver completes on an average day, as well as the geographical location of their operations.

Urban taxi drivers, often operating in bustling metropolitan areas, tend to complete a higher number of journeys during their shifts. On average, these drivers might complete approximately 25 fares per day if they work full-time. With the 20p tariff increase, this translates to an additional £5 in revenue each day. For those working full-time, five days a week, this equates to an additional £1,200 per year.

However, for taxi drivers who typically complete a lower number of metered fares throughout the day, the subsequent increase in revenue is significantly less. For instance, those completing approximately 10 metered fares per shift might amass a total of £480 over the course of a year which might not cover the increase in fuel cost felt by many in the trade.

The study also highlights the significance of geographical location in determining how taxi drivers perceive the tariff increase. Drivers operating in more rural areas often cover longer distances per journey but complete fewer overall trips. Consequently, these drivers may not benefit as much from a flag fall increase, but would lobby harder for a tariff increase calculated based on mileage travelled.

A 'one size that fits all' tariff would not work in the UK. Each local tariff structuring must accommodate the diverse needs and realities faced by taxi drivers across the United Kingdom. By accounting for geographic disparities and workload variation, regulatory authorities can help ensure that tariff increases result in fair compensation for all taxi drivers, irrespective of their location or daily workload.