RISING COSTS AND INFLATION: London taxi drivers do need tariff increase, but it must be balanced
London taxi drivers need an increase in meter tariffs to meet the rising costs and inflation, but it must be balanced to not price themselves out of the market, says capital’s taxi representative.
Transport for London (TfL) licenses and regulates London taxi (black cab) and private hire services in the capital. TfL also regulate taxi fares and set the maximum fares that can be charged.
When using a taxi the maximum taxi fare payable is displayed on the taximeter. Taxi fares are based upon the time of day, distance travelled and time taken. The tariffs are generated using a ‘Cost Index’ formula that tracks the costs related to being a taxi driver and changes to the average national earnings.
A number of different components for the costs related to being a taxi driver (e.g. vehicle costs, parts, tyres, servicing, fuel and insurance) are updated when the tariffs are reviewed.
Following the last review in 2019, the TfL Finance Committee approved increasing the minimum fare from £3.00 to £3.20 and raising Tariff’s 1 and 2 by 1.9% respectively.
Rail fares in England and Wales increased by 2.6% during the pandemic and are likely to rise again later this year as inflation continues to rise.
Steve McNamara, Licensed Taxi Driver's Association (LTDA) General Secretary, said in TAXI newspaper: “It’s been two years since the last fare increase and we are long overdue another, but given everything that’s happened during that time, there was a lot of debate about what level of increase we should be getting and how it should be distributed across the different tariffs.
“TfL will launch a consultation shortly. As part of this, we know that Heathrow is also pushing them to look again at the Heathrow Extra, so that they can justify applying the £5 drop-off charge to licensed taxis, on the basis that drivers can pass it onto customers.
“Drivers do need an increase to help meet rising costs and account for inflation, but the question is how do we do this, without pricing ourselves out of the market and whilst keeping and continuing to grow our customer base?
“We need to find the right balance and the LTDA will be asking members for their views before we respond to any consultation.”
