Updated: Oct 23, 2022
The Department tor Transport (DfT) has said regulated metered fares provide an “important element of consumer protection” and has supported the need to balance the price for both passengers and taxi drivers after MP concerns over price rises.
Local Authorities across the UK have been reviewing their licensed taxi tariffs in a bid to keep up with rising inflation and help cabbies meet the costs of high fuel and vehicle costs.
One MP was also concerned fares could rise in the private hire vehicle (PHV) sector due to an impending court case between operator Uber and licensing authority Sefton Council.
Julian Knight, Conservative MP for Solihull asked the Secretary of State for Transport, what assessment his Department has made of the potential impact a 20 percent rise in taxi fares would have on rural towns and communities.
Lucy Frazer, DfT Minister, said:
“For taxis, which can be hailed in the street or at taxi ranks in the area in which they are licensed, local licensing authorities can set maximum fares. These should pay regard to the needs of the travelling public and what it is reasonable to expect people to pay, but also to the need to give taxi drivers the ability to earn a sufficient income.
“Regulated metered fares provide an important element of consumer protection as passengers do not pre-book the journey. Many authorities have been reviewing their maximum taxi fares this year in light of the increasing pressure on everyone’s finances.
“Local authorities have no power to set fares for private hire vehicles. These services must be booked in advance and the competitive pre-booked market allows operators to compete on price as well as other factors such as quality of service and reputation.”
Private hire operators from across England are currently concerned about the implications of an Uber and Sefton Council court case that could drastically impact the sector forcing all operators to pay VAT on each journey booked.
If ride-hailing firm Uber are successful, the changes could force contractual arrangements with drivers and make all operators the principal for VAT on fares. This is likely to force the price of journeys up.
The prices in the PHV sector have already risen dramatically due to inflation, higher vehicle costs, workers' rights and other factors.