Silent strain on taxi rental firms sees black taxi insurance premiums rise by as much as £3,000 per year
Black taxi insurance premiums for fleet owners have skyrocketed by as much as £3,000 per year, putting pressure on rental prices in the market.
A London taxi fleet owner shared insights into the financial pressures facing the industry, pointing out that while drivers often complain about high rental costs, they rarely discuss the underlying factors. Among these, the escalating cost of insurance stands out as a significant contributor to operational overheads.
Previously, the average fleet paid approximately £2,500 per annum for each cab, roughly translating to £50 per week. Today, these costs have surged to as much as £5,500 annually, equating to over £100 per week – a staggering increase of more than 100%. This hike is irrespective of the fleet's claims history, indicating a broader market trend rather than isolated incidents.
The fleet owner rightly questions how rental rates such as £350 per week for a TXE can remain sustainable under these conditions. When adding these insurance costs to the expenses of financing, maintaining a new cab, and covering garage and staff costs, the economic challenges become clear.
Steve McNamara, General Secretary of the Licensed Taxi Drivers’ Association (LTDA), said in TAXI Newspaper: “Turning to issues impacting the trade as a whole now, I knew insurance premiums were rising and that older members in particular were struggling to get cover, but even I was shocked by the escalating cost of fleet insurance.”
The London taxi fleet owner said in TAXI: “This is a strange old business and always has been! Of all the topics that get discussed on ranks and in cafes, and increasingly on social media, the one that is having the biggest impact on us, as a trade, rarely gets a mention, and that’s the cost of insurance.
“I regularly hear cabbies moan about the high cost of renting a taxi, without discussing the reasons why rents are at the levels they are. The cost of the cab to buy and finance is obviously the primary factor but how many drivers know what it costs to insure a fleet cab? Up until very recently, an average fleet was paying about £2,500 PA, per cab, which equates to about £50 per week. The same fleets, irrespective of their claims rate, can now expect to pay anything up to £5,500 PA, an increase of over 100%, which produces a weekly figure of over £100 per week!
“Add this to the cost of financing and running a new cab, a garage, staff, and everything else and the real question should be How can anyone rent a TXE for £350 per week?”
