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TfL are ‘CONSIDERING’ consulting the taxi trade on app booking and cancellation fees says report

Transport for London (TfL) are considering consulting the industry and its customers on the topic of app booking and cancellation fees.

According to a report made available to TfL’s Finance Committee, the regulator says there are a number of other proposals ‘being considered for inclusion’ in this year's taxi fares consultation.

Currently in place is an extra charge of up to £2 if the taxi is booked by phone or online. However, that fee has become somewhat obsolete since the emergence of taxi apps, with some offering up to £15 ‘premium bonuses’ to drivers.

The TfL report said: “In addition to the Cost Index increase there are a number of other proposals that are being considered for inclusion in this year’s taxi fares consultation which are mainly around the fees applicable for taxis booked by phone or through an app – the ‘booking fee’ of £2 has been in place for a number of years and we are also considering a cancellation fee.

“We are also reviewing the fixed fares for shared taxi schemes. These are separate considerations to the implementation of the Cost Index.”

TaxiPoint has reported heavily on the impact of cancellations on drivers, customers and venues in recent months. It has become a vicious circle of rejection for many on the taxi app circuits.

Loyalty between those three sections of app users continues to dwindle fast as users’ expectations have been flipped upside down with demand now significantly outweighing the supply of taxis available.

Architect and TV Presenter George Clarke, a big supporter and user of black cabs, said: “I’ve always supported black taxis, but I’m getting sick and tired of a driver accepting a job then cancelling when they see another job on the street. If I cancel (which I don’t) I have to pay a fine. The driver cancels? I get nothing. Honour the job or lose loyalty.”

Clarke urged Free Now to extend cancellation fees to the drivers. He added: “I suggest you bring in cancellation fees for your customers if a driver cancels the job... that only seems fair and equal when we have to pay if we cancel... and that will put an end to black cab drivers cancelling on very loyal customers.”

Why are people cancelling?

Here we’ll run through why drivers, riders and venues cancel on each other and what might be done to improve loyalty and ultimately reliability across the board.

The rider

Pre-pandemic the rider has enjoyed years of service where there was an empty taxi or private hire vehicle quite literally one or two minutes away from their desired pick-up point. Drivers in an over saturated market would fight to be the quickest for that job pinging up on their device, not knowing when the next fare would arrive. The rider held all the aces.

Those rider expectations remain, but in truth the market has changed. Fewer drivers and higher on-street demand means less app coverage and higher waiting times. However, patience for the longer wait in today’s fast ‘have it now’ world is low to non- existent.

Riders who are lucky enough to have found a taxi willing to travel 5-6 minutes free of charge to them are increasingly jumping in other taxis that pass their way. They might think ‘well that’s saved me a couple of minutes’, which it has, or remain unsure the cab will arrive, but that experience leaves a bitter taste in the taxi driver’s mouth who has passed up job offers on the way to the pick-up. It’s essentially costing the driver time and fuel, which is money.

The driver

Having experienced the cancellation enroute, the taxi driver is wary of accepting longer run-ins to the pick-up point. Those that do accept remain cautious that the job could be cancelled at any point and spots a hand going up trying to hail their cab. The temptation to ensure work is too much for the cabbie who now cancels the job on the rider. It’s now their turn to be frustrated. The driver is however delighted as they’ve saved 15-20% on app fees and reduced their dead-time run-in with a roadside hail.

It’s easy to see why loyalty is lost between the two parties, but there’s also a third party in this scenario.

The venues

Hotel door staff acting on behalf of the rider use the apps to request taxis. However, should another taxi drop-off at the hotel whilst the ordered taxi is enroute, riders are then ushered into the empty taxi on their forecourt. Great you might think, as the rider has got a taxi, the taxi driver has got an immediate fare and the door staff have a tip from the rider for their troubles finding a taxi.

But what about the original taxi driver still running into the hotel expecting to pick-up a passenger? They receive no cancellation fee. Why would they bother again when a request comes in, and what happens next time when the cab driver is hailed while responding to the booking? They pick up ensured job street side.

The loyalty and trust has now gone which means some hotels are now booking multiple taxis for one rider. The door staff then lets the rider take the first one that arrives. The other drivers get nothing so the circle of mistrust begins all over again. Taxi drivers then recognise the hotels that use this practice and simply ignore all future requests leaving venue and rider frustrated.

What’s the solution?

Drivers hold the upper hand at the moment as there is less reliance on servicing taxi apps whilst commission- free street work demand remains high. Recession dependant, this reliance is likely to remain for some time until driver numbers dramatically increase.

If app operators moved the commission payments and ensured the security of a cancellation fee on ALL JOBS to the rider or venue, instead of the driver, that would put the value of the job at the same level as street work.

App firms could also choose to display the number of cancelled jobs in the last 100 requests. A passenger who historically shows patience will be trusted more by the driver to not cancel enroute. This could also be reciprocated where the rider can see the driver’s rate of cancellation too.


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