Taxi fares review 2019

Closed 23 Aug 2019

Opened 12 Jul 2019

Overview

We are seeking views on taxi (black cab) fares in London and the following proposals:

Area

Days and times applicable

Proposal

Minimum fare

At all times

Increase by 20 pence (6.7%) taking this from £3.00 to £3.20

Tariff 1

Monday to Friday, 05:00-20:00

Increase by 1.9%

Tariff 2

Monday to Friday, 20:00-22:00 and Saturday and Sunday, 05:00-22:00

Increase by 1.9%

Tariff 3

Every night 22:00-05:00 and public holidays

Freeze

Tariff 4

For journeys over six miles

Freeze tariff rates

 

We are also proposing to:

  • Extend the arrangements in place to cover significant increases or decreases in the price of diesel
  • Increase the fixed fares for shared taxis from Euston Station to Lord’s Cricket Ground by 50 pence when Tariffs 1 and 2 apply
  • Make a small change to when the tariff rate for journeys over six miles (Tariff 4) starts

We are also interested in your views on:

  • The Cost Index and if changes should be made to this
  • Taxi fares late at night and Tariff 3

You can let us know what you think of these proposals by completing the short online survey here

More information about taxi fares and tariffs in London and our proposals is below.

Background

Transport for London (TfL) licenses and regulates London taxi (black cab) and private hire services. We also regulate taxi fares and set the maximum fares that can be charged.

London’s taxis provide a reliable and trusted service to Londoners and visitors, offering users a safe and convenient service, aided by the drivers’ extensive knowledge of the Capital’s streets.

The Mayor’s Transport Strategy (MTS) recognises the important role taxis play in the Capital’s transport network. Policy 20 of the MTS states that "The Mayor, through TfL and the boroughs, and working with stakeholders, will seek to ensure London has a safe, secure, accessible, world-class taxi and private hire service with opportunity for all providers to flourish.”

Taxis are particularly important for anyone who experiences physical or other barriers when accessing other forms of transport. Taxi services provide an accessible door to door service which may be essential for some users and the MTS recognises that taxis “can expand travel horizons for those requiring safe, accessible travel options.”

Disabled residents in London are eligible for subsidised taxi journeys under the Taxicard scheme which provides a door-to-door service. The scheme is funded by TfL and the London boroughs and taxis are used for the majority of Taxicard journeys.

Taxi fares and tariffs

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.

“Taxi tariffs” – there are four different taxi tariffs and these are:

  • Tariff 1 (T1): Monday to Friday, 05:00-20:00
  • Tariff 2 (T2): Monday to Friday, 20:00-22:00 and Saturday and Sunday, 05:00-22:00
  • Tariff 3 (T3): Every night 22:00-05:00 and public holidays
  • Tariff for journeys over six miles which is sometimes referred to as Tariff 4 (T4)

When considering proposed changes to taxi fares and tariffs we try to strike an appropriate balance between drivers being fairly remunerated and taxi users getting fair, reasonable and affordable fares.

To help us achieve this we:

  • Use the Cost Index (see below) to inform any potential changes to taxi fares and tariffs, but at the same time not automatically increasing (or decreasing) fares or tariff rates by the total Cost Index figure
  • Consider changes to the costs of being a taxi driver in London along with the need for fares to be fair, reasonable and affordable for users
  • Consider the costs of other modes of passenger transport and the competiveness of taxi fares
  • Try to maintain reasonable and justifiable differences in the tariffs for journeys in the daytime, evening/weekend and late at night or on public holidays
  • Try to maintain reasonable and justifiable differences in fares as the distance and duration of a taxi journey increases
  • Recognise specific criteria regarding taxi licensing and services in London including the Knowledge of London and taxi vehicles having to meet the standards set out in the Conditions of Fitness; and
  • Ensure due and careful regard to the impact of changes to fares and tariffs on those sharing characteristics protected under the Equality Act 2010 including those who may use taxis more frequently or place greater reliance on them compared to others

More information about taxi fares and tariffs, taxi driver licensing and the changes made in 2018, is available here

Cost Index

The Cost Index is maintained and updated by TfL and it provides a way for us to:

  • Track changes to the costs related to being a taxi driver
  • Track changes in 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 we review taxi fares and tariffs and update the Cost Index. A summary of the Cost Index components and changes to these is available here.

It is important to note that the Cost Index, and the total figure produced when this is updated, is independent of the taxi fares and tariffs. The Cost Index provides us with a way to track changes to the costs associated with being a taxi driver and average national earnings but there is no obligation on us to increase or decrease taxi fares by the Cost Index figure or to use this figure when considering changes to taxi fares and tariffs.

The Cost Index was previously updated in November 2017. At that time the total Cost Index figure was +3.6% and this figure informed the previous changes to the taxi fares and tariffs.

The most recent update was in November 2018 and new figures are shown below:

Cost Index components

Change in Cost Index components since November 2017 update

Date of most recent update

Change in the costs related to being a taxi driver

(e.g. vehicle costs, parts, tyres, servicing, fuel and insurance)

+1.8%

November 2018

Change in average national earnings

+1.6%

November 2018

Total Cost Index figure

+3.4%

 

 

The total Cost Index figure of +3.4% has informed this year’s proposed changes to taxi fares and tariffs.

For several years average fares across Tariffs 1, 2 and 3 were increased by the total Cost Index figure generated when the Cost Index was updated.

We consider that the historic use of the total Cost Index figure in this way has contributed to a perception amongst some users that taxi fares are too expensive, especially late at night and for long journeys.

The perception that taxi fares are too expensive late at night may deter some people from using taxis at any time. Information about taxi users’ and taxi drivers’ views on taxi fares is available here

Taxi journeys

When reviewing taxi fares and tariffs, we consider the impact of potential changes on both taxi users and drivers including if fare increases will lead to fewer people using taxis and result in reduced income for taxi drivers.

Our research has shown that the number of taxi journeys in a typical day has been falling. In 2009 there were around 185,000 taxi journeys in a typical day but in 2016/17 this figure had fallen to around 109,000.

A chart showing the trend in number of taxi and private hire (minicab and executive/chauffeur services) journeys in London is below. 

Proposed changes

The minimum fare and taxi tariff rates

For the 2018 taxi fares and tariffs review the Cost Index figure was +3.6% and this figure was used to inform the review of taxi fares and tariffs. Whilst recognising the need for taxi fares to rise, instead of increasing fares by 3.6% we took an alternative approach and:

  • Increased the minimum fare by 40 pence (15.4%) taking this from £2.60 to £3.00
  • Increased Tariff 1 by 0.6%
  • Increased Tariff 2 by 0.6%
  • Froze Tariff 3
  • Froze the tariff rates for journeys over six miles (Tariff 4)  

We think that this approach helped achieve a better balance when trying to ensure that:

  • Taxi drivers can cover increasing operating costs
  • Tariff 1 and 2 fares do not become too expensive
  • Tariff 3 and 4 fares do not become more expensive

For this year’s review we are proposing a similar approach to last year and to:

  • Increase the minimum fare by 20 pence (6.7%) taking this from £3.00 to £3.20
  • Increase Tariff 1 by 1.9%
  • Increase Tariff 2 by 1.9%
  • Freeze Tariff 3
  • Freeze the tariff rates for journeys over six miles (Tariff 4)

Although the Cost Index figure for this year’s review is +3.4%, we are not proposing to increase average fares across Tariffs 1, 2 and 3 by this figure. There are a number of reasons for this including:

  • We think this increase would be too high
  • It could mean that some elderly or disabled taxi users are no longer able to afford to use taxis
  • It could mean that Taxicard users can no longer afford taxis or experience problems when trying to make a Taxicard booking because drivers are reluctant to accept the Taxicard capped fares and the difference between these and fares on the taximeter is increased
  • Although the proposed increases are lower than 3.4% and some taxi drivers may feel that this means they are experiencing a real terms reduction in their income, an increase of 3.4% could negatively impact taxi drivers as a result of more people considering taxis too expensive and usage declining further
  • We think that the proposed changes should still help ensure that drivers can cover increased operating costs as the increases to Tariffs 1 and 2 plus the increase to the minimum fare mean that drivers will have increased fares whenever they work
  • There is no increase to the Tariff 3 and 4 rates

More information about the reasons for proposing these changes plus other options we have considered are available here

We are interested in your views on taxi fares and if you agree or disagree with our proposals.

Update 19 July 2019: Based on customer feedback we have updated supporting PDF document "Previous changes to fares and tariffs, 2019 proposals and fares for other modes of transport” so that tables on pages 21-36 show fare per passenger plus total fare for different services and journey lengths.

Extending the arrangements covering significant increases or decreases in diesel prices

Diesel prices can vary rapidly and unpredictably, and an increase could result in significant additional costs for taxi drivers.

Since July 2008 arrangements have been in place under which we would approve 40 pence being added to each taxi fare if the price of diesel reached a certain level. Arrangements have also been in place since 2016 for taxi fares to be reduced by 40 pence if diesel prices fell below a certain level. More information about diesel costs in London and changes over recent years is available here

We propose to continue these arrangements for one final year but not to extend them beyond this as our focus is on supporting the transition from diesel taxis to zero emission capable (ZEC) taxis. We are interested in your views on this.  

Fixed fares from Euston Station

In 2018 we increased all of the fixed fares for shared taxis from Euston Station by 50 pence. The exception to this was the fixed fare from Euston Station to Lord’s Cricket Ground which was not increased.

The fixed fare to Lord’s Cricket Ground was £5.00 during Tariffs 1 and 2 but £5.50 during Tariff 3. This differed from the fares for other destinations which were the same during each tariff and did not vary between Tariffs 1, 2 and 3.

The reason for the increase in 2018 was that the fixed fares for shared taxis from Euston Station had not been reviewed since 2010 despite the minimum fare, tariffs rates and drivers’ operating costs increasing.

We’re now proposing to increase the fixed fares for shared taxis to Lord’s Cricket Ground during Tariffs 1 and 2 but make no change to the Tariff 3 fare so as the fixed fare is the same at all times. The current fares and proposed fares are below.

Authorised place

Destination

Applicable dates and times

Tariff

Current fare

Proposed fare

Change

Taxi rank at Euston Station, London NW1

Lord’s Cricket Ground, St John’s Wood

During the period of cricket matches at Lord’s, all day

Tariff 1

£5.00

£5.50

50 pence increase

Tariff 2

£5.00

£5.50

50 pence increase

Tariff 3

£5.50

£5.50

No change

 

A full list of the current and proposed fixed fares from Euston Station is available here 

We are interested in your views on the proposed increase to the fixed fares for shared taxis from Euston Station to Lord’s Cricket Ground.

Changing when the tariff rate for journeys over six miles (Tariff 4) starts

We are proposing to make a small change to Tariff 4 so that the distance this tariff rate starts at is linked to the distance unit for Tariffs 1, 2 and 3, rather than it starting at exactly six miles (9,656.1 metres). 

This small change will make it easier to test and validate the taximeter updates and ensure the point at which the tariff rate should change can be clearly identified during testing. 

The table below shows all of the current and proposed tariff figures plus the current and proposed distances when Tariff 4 starts.

 

Tariff 1

Tariff 2

Tariff 3

 

Current

Proposed

Current

Proposed

Current

Proposed

Minimum Fare

£3.00

£3.20

£3.00

£3.20

£3.00

£3.20

Minimum Units

2

2

2

2

2

2

Metres/Unit < T4 Tariff Distance (metres)

116.6

113.5

94.8

92.4

81.2

81.2

Secs/Unit < T4 Tariff Distance (seconds)

25.1

24.4

20.4

19.9

17.5

17.5

Metres/Unit > T4 Tariff Distance (metres)

86.9

86.9

86.9

86.9

86.9

86.9

Secs/Unit > T4 Tariff Distance (seconds)

18.7

18.7

18.7

18.7

18.7

18.7

 

 

 

 

 

 

 

T4 Tariff Unit Changeover

82

85

101

104

118.917

118

Distance T4 Tariff starts at (metres)

9561.2

9647.5

9574.8

9609.6

9656.1

9581.6

 

No change to the distance and time rates is proposed for Tariff 3 or 4 but our proposal will mean that the changeover from Tariff 3 to Tariff 4 will be on a whole number of units during the time Tariff 3 applies. 

If you have any comments on this please let us know.

The Cost Index

The Cost Index continues to provide us with a valuable way of tracking changes to the operating costs associated with being a taxi driver and average national earnings. Although we’re not proposing to increase taxi fares by the current Cost Index figure (+3.4%) our proposals are still informed by this figure.

We constantly review the Cost Index and its components and propose to continue doing this when reviewing taxi fares and tariffs.

The Cost Index includes costs for diesel taxis and diesel but not for zero emission capable (ZEC) taxis, petrol or electricity. Since 1 January 2018 it has been a requirement for all newly licensed taxis to be ZEC and we are exploring options for how the costs associated with the ZEC taxis, including electricity, can be incorporated into the Cost Index.

We have previously considered removing the social costs element and other changes (adding card payment costs and taxi booking company charges/commission) have been requested by the taxi trade associations.

We are interested in your views on the current Cost Index and whether:

  • Changes should be made to any of the current components
  • New components should be added
  • Other changes should be made

Night time taxi fares

Tariff 3 covers taxi journeys every night between 22:00 and 05:00 and at any time on public holidays, and is the most expensive tariff rate. The rates per mile and hour for each tariff are shown below:

Tariff

Rate per mile

Increase to Tariff 3 rate per mile

Rate per hour

Increase to Tariff 3 rate per hour

Tariff 1

£2.76

43.4%

£28.69

43.4%

Tariff 2

£3.40

16.5%

£35.29

16.6%

Tariff 3

£3.96

NA

£41.14

NA

Tariff 4

£3.70

7.0%

£38.50

6.9%

 

Stakeholder feedback suggests that the public consider taxis too expensive late at night and that this could affect their view of taxi fares at all times and deter them from using taxis. Suggested changes to Tariff 3 include reducing the rate, making it the same as the tariff rate for journeys over six miles (Tariff 4) or making it the same as Tariff 2.

Although no change to Tariff 3 is proposed as part of this taxi fares and tariffs review we are interested in your opinion of Tariff 3 and whether you think:

  • Tariff 3 should be reduced or removed
  • Taxi fares late at night are too expensive or should be reduced
  • Other changes should be made

Impacts

We have considered the potential impact of our proposals on different groups and if the impact would be negative or positive. Our Impacts Assessment provides information on the characteristics and the groups who could potentially be impacted by the proposed changes to taxi fares and tariffs. This consultation will form part of our consideration of the impacts of this work on different groups, including those who share a protected characteristic. It will help us to ensure that we have considered fully the impact of our decisions.

Have your say

We would like to know what you think about our proposals.

Please give us your views by completing the online survey below by Friday 23 August 2019.

Alternatively, you can:

You can also request paper copies of all the consultation materials and a response form by emailing consultations@tfl.gov.uk, or writing to FREEPOST TFL CONSULTATIONS.

Areas

  • All Areas

Audiences

  • Anyone from any background

Interests

  • Taxis