2. Taxi fares and tariffs consultation options

CLOSED: This discussion has concluded.

Consultation options

We’re not consulting on a single proposal but instead are interested in your views on the following options:

	Option	Increase
1	Tariffs 1, 2 and 3 increased to reflect the change in taxi drivers’ operating costs	Tariffs 1, 2 and 3 increased by +5.20%
2	Tariffs 1, 2 and 3 increased to reflect the change in average national earnings	Tariffs 1, 2 and 3 increased by +3.72%
3	Tariffs 1, 2 and 3 increased by the total Cost Index figure This would reflect the change in both taxi drivers’ operating costs and average national earnings	Tariffs 1, 2 and 3 increased by +8.92%
4	Tariffs 1, 2 and 3 are frozen	No change to Tariffs 1, 2 and 3

Summary of the main points for each option

No change to the minimum fare is proposed and it would remain frozen at £3.80 for each option. We’ve not proposed any change to the minimum fare for this review of taxi fares and tariffs as this has been increased in three of the four previous reviews. In addition, for this review we wanted to simplify the options and so we have limited the potential changes to only being increases to Tariffs 1, 2 and 3.

No change to Tariff 4 is proposed in any of these options. Changes to Tariff 4 are being considered separately in the consultation.

Options 1, 2 and 3 would all involve increasing Tariffs 1, 2 and 3.

The table below provides a summary of the main points for each option.

For options 1, 2 and 3:

Passengers would see fares increase, regardless of when they travel
Taxi drivers would see fares increase, regardless of when they work

For option 4:

Fares would not increase for passengers, regardless of when they travel
Taxi drivers would not see fares increase, regardless of when they work

Option	Increase in taxi drivers’ operating costs covered	Increase in average national earnings covered	Other points to consider
Option 1 Taxi fares and tariffs increased to reflect the change in taxi drivers’ operating costs Tariffs 1, 2 and 3 increased by +5.20%	Yes	No	This increase would be higher than the increase in average national earnings but lower than the total Cost Index figure An increase could help taxi drivers cover increased operating costs. However, it could also deter some people from using taxis, or make taxis too expensive for some people or some journeys An increase in taxi fares could help to make being a taxi driver an attractive career and encourage people to apply to become a taxi driver. However, if the increase in fares deters people from using taxis and reduces demand then people could be put off from applying to become a taxi driver Increasing taxi fares could help to retain existing taxi drivers, although if the increase deters people from using taxis and reduces demand then existing taxi drivers may be more likely to stop working as a taxi driver
Option 2 Taxi fares and tariffs increased to reflect the change in average national earnings Tariffs 1, 2 and 3 increased by +3.72%	No	Yes	This increase would be lower than the increase in taxi drivers’ operating costs and the total Cost Index figure This increase would be lower than the increases in options 1 and 3 and so the negative impacts may be less severe An increase could help taxi drivers partly cover increased operating costs. However, it could also deter some people from using taxis, or make taxis too expensive for some people or some journeys An increase in taxi fares could help to make being a taxi driver an attractive career and encourage people to apply to become a taxi driver. However, if the increase in fares deters people from using taxis and reduces demand then people could be put off from applying to become a taxi driver Increasing taxi fares could help to retain existing taxi drivers, although if the increase deters people from using taxis and reduces demand then existing taxi drivers may be more likely to stop working as a taxi driver
Option 3 Taxi fares and tariffs increased by the total Cost Index figure +8.92% This would reflect the change in both taxi drivers’ operating costs and average national earnings Tariffs 1, 2 and 3 increased by +8.92%	Yes	Yes	This increase could help taxi drivers cover increased operating costs This increase would also reflect the increase in average national earnings and mean taxi drivers’ incomes increase However, it could also deter some people from using taxis, or make taxis too expensive for some people or some journeys An increase in taxi fares could help to make being a taxi driver an attractive career and encourage people to apply to become a taxi driver. However, if the increase in fares deters people from using taxis and reduces demand then people could be put off from applying to become a taxi driver Increasing taxi fares could help to retain existing taxi drivers, although if the increase deters people from using taxis and reduces demand then existing taxi drivers may be more likely to stop working as a taxi driver
Option 4 Taxi fares and tariffs frozen (no change)	No	No	This option could help to make taxis more affordable However, this option could mean taxi drivers cannot cover increased operating costs This option would not reflect the increase in average national earnings Not increasing taxi fares could have a negative impact on taxi drivers as their operating costs and average national earnings have increased, although the impact may be positive if it increases demand for and usage of taxis or if it prevents demand from decreasing This option would mean that no changes were required to the taximeters fitted in taxis No increase in taxi fares could deter people from applying to become a taxi driver However, if fares are frozen and there is no reduction in the demand for taxis, or possibly an increase in demand, then this could help to make being a taxi driver an attractive career and encourage people to apply to become a taxi driver Freezing taxi fares could mean existing taxi drivers are more likely to stop working as a taxi driver, although if freezing taxi fares encourages people to use taxis and increases demand then this could help to retain existing taxi drivers This could also have an impact on passengers making longer journeys, as it could mean drivers are less likely to accept these and passengers find it harder to hire a taxi for a longer journey. The proposed changes to Tariff 4 will also affect this

Example fares

The tables below shows example fares, based on distance only, for each option.

This table shows the fares for shorter journeys as they are now.

	Tariff 1	Tariff 2	Tariff 3
Up to 1 mile	£6.80	£7.60	£7.80
Up to 2 miles	£10.20	£11.80	£12.20
Up to 3 miles	£13.60	£15.80	£16.60
Between 4 and 6 miles	£17.00	£20.00	£20.80

Option 1 - Increase fares by 5.2%

This only covers the increased costs of running a taxi. It would increase fares as shown below.

	Tariff 1	Tariff 2	Tariff 3
Up to 1 mile	£7.20	£7.80	£8.20
Up to 2 miles	£10.80	£12.20	£12.80
Up to 3 miles	£14.40	£16.60	£17.40
Between 4 and 6 miles	£18.00	£21.00	£22.00

Example: he fare (based on distance only, not time) for a journey of three miles on a weekday evening would increase by 80p – from £15.80 to £16.60.

Option 2 - Increase fares by 3.72%

This only covers the average increase in wages. It would increase fares as shown below.

	Tariff 1	Tariff 2	Tariff 3
Up to 1 mile	£7.00	£7.80	£8.00
Up to 2 miles	£10.60	£12.20	£12.60
Up to 3 miles	£14.20	£16.40	£17.20
Between 4 and 6 miles	£18.00	£20.80	£21.80

Example: The fare (based on distance only, not time) for a journey of three miles on a weekday evening would increase by 60p – from £15.80 to £16.40.

Option 3 - Increase fares by 8.22%

This covers both the increased costs of running a taxi and the average increase in wages. It would increase fares as shown below.

	Tariff 1	Tariff 2	Tariff 3
Up to 1 mile	£7.20	£8.00	£8.40
Up to 2 miles	£11.00	£12.60	£13.20
Up to 3 miles	£14.80	£17.20	£18.00
Between 4 and 6 miles	£18.60	£21.60	£22.80

Example: The fare (based on distance only, not time) for a journey of three miles on a weekday evening would increase by £1.40 – from £15.80 to £17.20.