PAY PER MILE: Should taxi drivers receive exemptions from any future road usage tax?
- Perry Richardson
- 2 hours ago
- 3 min read
As the Treasury weighs up a potential road usage charge to replace declining fuel duty, questions are being raised about whether professional drivers should be treated differently under such a scheme.
Calls would likely grow for the policy, if introduced, to recognise the essential nature of licensed taxi and private hire work. Unlike private motorists, hackney carriages form part of the country’s public transport network, providing accessible, door-to-door travel for millions. Industry representatives argue that a blanket charge would unfairly penalise those whose livelihood depends on being on the road every day.
One simple and fair proposal would be a partial or full exemption for Wheelchair Accessible Vehicles (WAVs). The number of WAVs available in the licensed taxi and private hire fleets has been falling in recent years, largely due to the high upfront costs and limited vehicle options. Many authorities require a proportion of licensed taxis to be wheelchair accessible, but drivers have struggled to justify the additional expense, especially as demand patterns change and operating costs rise.
Linking any future road usage tax to incentives for WAV investment could provide a much-needed boost. Exempting WAVs entirely from the per-mile charge, or offering a discounted rate, would reward drivers who maintain or upgrade to accessible vehicles. This approach would not only protect the most vital part of the fleet but also align with broader equality and transport inclusion goals.
Another option, that would need a lot of persuasion, would be to extend reduced rates to all professionally licensed taxi and private hire vehicles, provided they meet strict emissions and licensing standards. That would preserve fairness between different operator types while ensuring that only legitimate, compliant drivers benefit.
A sliding scale could also be introduced, where the per-mile rate decreases beyond certain mileage thresholds to reflect commercial use. Such a system would recognise that high-mileage drivers contribute more to the economy and local transport systems than casual road users, while still capturing revenue from those who drive the most.
Trade bodies might suggested linking exemptions to verified licensing databases. This would allow automatic identification of qualifying drivers through licensing authority records, avoiding complex claims processes or disputes.
Without such measures, there are concerns that the road charge could make the operation of electric taxis financially unviable for many small owner-drivers. The electric transition has already stretched personal finances, with vehicle purchase prices, home charging setup costs, and insurance all higher than for conventional cabs. A per-mile levy applied to all EV taxi drivers could erase the modest savings electric cabs currently offer.
Introducing targeted exemptions would therefore serve two policy goals at once: protecting livelihoods in the professional driver sector and supporting the government’s own objectives on accessibility and net zero.
If, and it remains still a big if, the Treasury brings in road usage charging, the challenge will be balancing fairness and effectiveness. A system that fails to distinguish between commercial and casual driving risks damaging the very parts of the transport network that offers vital urban mobility. But if exemptions and incentives are correctly structured, a per-mile charge could still deliver stable revenue without deterring investment in cleaner, more inclusive vehicles
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