We normally review taxi fares and tariffs annually and aim to implement changes in April of each year. Taxi fares and tariffs were last updated by TfL in April 2023.

There are several stages involved in the annual review of taxi fares and tariffs. These include updating the Cost Index, carrying out a public consultation and reviewing the consultation responses, and considering recommendations and potential changes. This is why the consultation starts well in advance of any potential changes coming into effect.

When we review taxi fares and tariffs we try to strike an appropriate balance between drivers being fairly paid and taxi users getting fair and affordable fares.

We are now reviewing taxi fares and tariffs and considering changes because:

• The Cost Index, which is used to track changes to taxi drivers’ operating costs and average national earnings, shows:
  1. There has been an increase in taxi drivers’ operating costs
  2. There has been an increase in average national earnings
• We recognise that some taxi drivers may be under greater financial pressure at the moment and are affected by the cost of living crisis and increases in other items (e.g. utility bills, mortgages, food costs, etc)

It is important that taxi drivers are fairly paid to ensure that:

• Taxi drivers can cover their operating costs and are fairly compensated for their work
• Taxi driving remains a viable career to encourage licensed drivers to remain in the trade and to encourage new applicants. If the number of licensed taxi drivers or new applicants continues to fall then this could impact the service for passengers in terms of safety, availability and reliability. For example:
  1. Some people may not be able to make a journey and those who rely on taxis, e.g. people with disabilities, will be disproportionately affected
  2. There may be longer wait times for taxis which could impact safety and convenience for passengers, particularly late at night
  3. Some people may choose or be targeted by a less safe option (e.g. using an unlicensed vehicle or unbooked private hire vehicle (PHV))

It is important that taxis remain affordable because:

• Taxis may be particularly important for some people who require an accessible vehicle
• Taxis may be particularly important for some people who require a door-to-door service
• Taxis provide an important service late at night and if taxis are considered too expensive people may be more likely to use an unlicensed vehicle or unbooked PHV
• If taxis are considered unaffordable, and the number of people using taxis or taxi journeys declines, this could reduce the availability of taxis or increase taxi wait times, as existing taxi drivers may choose to change jobs and people may be deterred from applying to become a taxi driver

Consultation options

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

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

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.

Option 1 - Increase fares by 5.2%

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

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.

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.

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.

Option 4 - Leave fares as they are now

As shown in the table at the beginning of this section.

Summary

The table below shows the other consultation items and what is being proposed or asked.

Tariff 4

Tariff 4 applies once a taxi journey reaches approximately six miles. Tariff 4 was intended to encourage drivers to accept fares for longer journeys, when they may have been less likely to accept these unless there was an incentive to do so.

Following concerns being raised that Tariff 4 had become too high and made longer taxi journeys less competitive it has been frozen in the four previous taxi fares and tariff reviews.

Tariff 4 was historically higher than Tariffs 1 and 2 but lower than Tariff 3, but as a result of it being frozen it is now lower than Tariffs 2 and 3.

Changing or removing Tariff 4 has been considered in the past.

We are now proposing to make the Tariff 4 rates the same as the Tariff 2 rates.

The table below shows what happened to the tariff rate once a journey reaches six miles originally, what happens currently and what is proposed.

This is being considered separately to the options for Tariffs 1, 2 and 3 to help simplify those options. The change to Tariff 4 is also something we could implement independently of any changes/freeze to Tariffs 1, 2 and 3.

Research has shown that the average distance of a taxi journey is 2.6 miles and that 91 per cent of journeys are under six miles. This means that the majority of taxi passengers, journeys and fares will not be affected by the proposed change to Tariff 4.

Making Tariff 4 the same as Tariff 2 is being proposed for the following reasons:

• This simplifies the tariff structure
• This ensures that there will continue to be an incentive for taxi drivers to accept longer journeys when Tariff 1 applies. It also means that the tariff rate will not fall once a journey reaches six miles when Tariff 2 applies
• Tariff 3 will continue to be the highest tariff and hopefully encourage taxi drivers to work at night
• If we continue to freeze Tariff 4 this could mean some taxi drivers are less willing to accept fares for longer journeys and passengers wanting to make these journeys experience problems when trying to get a taxi
• This change may reduce the risk of drivers refusing to accept longer journeys, benefiting passengers wanting to take a taxi for a journey that is over six miles
• All taxi drivers would benefit when they have a journey that goes over six miles as tariff rate would be higher than it is at present. Taxi drivers who work at Heathrow Airport may be more likely to benefit as they may be more likely to do longer journeys

Booked taxi extra

Up to £2.00 can be added to taxi fares for a taxi hiring arranged by telephone, mobile phone, smart phone, mobile application, any application software and by use of the internet. This extra charge is listed on the taxi fare card displayed in the passenger compartment of all licensed taxis.

The extra charge was already in place when TfL took over responsibility for regulating taxi fares and tariffs in 2000. The maximum charge was £1.20 and could be added to the fare for hirings arranged by telephone.

In 2002 we increased the maximum charge to £2.00. In 2014 we extended the arrangement to allow up to £2.00 to be added to the fare for hirings arranged using mobile applications, any application software or the internet. In April of this year we removed the requirement for the extra charge to be added to the taximeter.

The extra charge is intended to help cover the costs associated with hirings being taken via a booking service. It can be charged for all hirings taken via a booking service, regardless of whether the journey is completed or it does not go ahead.

We’re interested in whether you think the booked taxi extra should:

• Remain at £2.00
• Be increased
• If you think it should be increased how much it should be increased by/what it should be increased to

Extra charges can only be added to the taximeter in increments of 40 pence. Although we’ve removed the requirement for the booked taxi extra to be added to the taximeter some taxi booking services may still choose to have the extra added to the taximeter. Although the booked taxi extra is not added to Taxicard bookings at present it’s possible that in the future this could change. Therefore if this extra was increased it would still have to be possible to add the exact maximum amount to the taximeter (i.e. it would need to be £2.40, £2.80, £3.20, £3.60, £4.00, £4.40, £4.80, £5.20, etc).

Heathrow extra

At Heathrow Airport there are taxi ranks at each of the terminals. There is also a taxi feeder park, this is an area where taxis queue before proceeding to one of the terminal taxi ranks.

Taxi drivers must pay a fee to enter the taxi feeder park at Heathrow Airport and access the taxi ranks at the airport terminals. Heathrow Airport Limited (HAL) sets the fee taxi drivers must pay to enter the taxi feeder park. The fee is intended to only cover the cost of operating the taxi feeder park and the taxi ranks at the airport.

We allow taxi drivers to charge a Heathrow extra to help them cover part of the cost of the taxi feeder park fee. We introduced the Heathrow extra in April 2004. It has normally covered around 50 per cent of the taxi feeder park fee.

HAL decide whether to increase or reduce the taxi feeder park fee. In July 2021 they increased it from £3.60 to £7.20 owing to losses incurred during the coronavirus pandemic when demand for taxis at the airport was massively reduced. As a result of this increase to the fee taxi drivers must pay, in April 2022 we increased the extra taxi drivers can add to taxi fares from £2.80 to £3.60.

In April 2023 HAL decreased the fee taxi drivers pay from £7.20 to £3.60.

We’re now proposing to reduce the Heathrow extra from £3.60 to £2.00 as:

• The Heathrow extra is normally around 50 per cent of the fee taxi drivers pay to enter the taxi feeder park and this fee is currently £3.60
• Extra charges can be added to the taximeter in increments of 40 pence and so it is not possible to make this exactly half (£1.80) of the fee taxi drivers must pay
• The maximum extra taxi drivers can add to the fare would be £2.00 but they can choose to charge less than this (e.g. £1.60, £1.20, 80 pence, etc) or not charge it all

Wimbledon Tennis Championships fixed-fare, shared-taxi scheme

During the Wimbledon Tennis Championships fixed-fare, shared-taxi schemes operate.

Passengers share their taxi with other people they may not know and each passenger pays a fixed fare. Potential benefits from these schemes include:

• Passengers have a shorter wait for a taxi and reduced fares
• Taxi drivers get a higher fare than for an equivalent exclusive hiring
• The supply of available taxis can be used more efficiently
• The local community benefits from fewer taxi movements, resulting in less congestion, noise and pollution

Fixed-fare, shared-taxis operate from the Wimbledon Tennis Championships to parts of central London. In the previous taxi fares and tariffs review we increased these fixed fares. No changes to these are proposed as part of this review.

Fixed-fare, shared-taxis also operate between Wimbledon and Southfields stations and the Wimbledon Tennis Championships. The table below shows when and where the shared taxis operate, and the fixed fares.

During the 2023 Wimbledon Tennis Championships the morning fixed-fare, shared-taxi service from the stations to the tennis was reported to have worked well. However, problems were reported with the evening service and there not being enough taxis to meet the demand, resulting in long waits for passengers or passengers being unable to get a taxi.

We’re interested in whether you think the fixed-fares shown in the table above should:

• Remain at £2.50 per passenger
• Be increased

Taxicard scheme

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.

In January 2019 capped fares were introduced for Taxicard journeys. These were introduced in response to members’ concerns about taxi fares, fares sometimes being too high, fares varying for the same journey and also uncertainty around what the final metered fare would be when using a taxi.

Under the new capped fare scheme, members were advised of the capped fare before starting a journey and this was the maximum they would pay. However, some of the capped fares were considered to be too low by some taxi drivers. This resulted in a decline in service for Taxicard members with fewer Taxicard jobs being accepted by taxi drivers.

In response to this the Taxicard fare structure was revised with taxi drivers receiving either 90 per cent of the metered fare or the capped fare, whichever is higher. When it was introduced the impact of this change resulted in the service improving for Taxicard members, positive feedback from taxi drivers and a more reliable service.

Taxicard fares

Concerns were raised by London Councils in their responses to the 2018 and 2019 taxi fares consultations about the impact of fare increases on Taxicard members.

In 2018, London Councils said that ‘frontloading’ the increase (putting part of the increase on the minimum fare as well increasing the tariffs, instead of only increasing the tariffs) could disproportionately affect Taxicard members and they believed it was fairer to have increases across all tariffs as was previously done.

In their 2019 response, London Councils said that the full year effect of the proposals would be to increase the cost of the Taxicard scheme. Although they believed that there was sufficient budget available in that year to meet the additional costs, the increase could mean that all of TfL’s 2019/20 funding allocation for Taxicard was spent.

They also noted that performance issues experienced following the initial introduction of the capped fare scheme had significantly depressed journeys compared with previous years and were journey numbers to increase to, or beyond previous years’ levels, there could be additional pressure on TfL and borough budgets.

They previously said that on a general note the upward movement of the tariffs could mean that the Taxicard scheme has to be modified to ensure the budget is not exceeded and that this may mean that Taxicard members are able to make fewer journeys in the future. This could have a significant negative impact on Taxicard members if they are reliant on taxis or cannot use other modes of transport for journeys instead of taxis.

Taxicard service

There have been reports of some Taxicard members experiencing problems with the Taxicard service.

Taxi and private hire vehicle (PHV) services in London were discussed at the September 2022 Inclusive Transport Forum and the majority of the comments received were about current problems with the Taxicard service.

Issues raised by stakeholders, Taxicard members or at the Inclusive Transport Forum included:

• Long wait times for taxis
• Taxis not being available when Taxicard members want to travel
• Taxi drivers not accepting Taxicard jobs because of restrictions on access for taxis and drivers having concerns about the route to pick up Taxicard members being longer and costing them more in terms of time and fuel used
• Taxi drivers not accepting Taxicard jobs because of restrictions on access for taxis and drivers having concerns about being issued with a penalty charge notice for entering a restricted street
• Accessible vehicles not being provided when these are requested
• Taxicard members experiencing problems when trying to make a booking
• Issues with the Taxicard app
• Taxi drivers not doing Taxicard work as they are doing street hails and taxi rank work instead
• Taxi drivers not wanting to do Taxicard work as they only receive 90 per cent of the fare

Potential impacts on Taxicard members

Our impact assessment and equality impact assessment documents contain information about the potential positive and negative impacts on Taxicard members that we have identified.

Positive and negative impacts from the taxi fares and tariffs options include:

Increasing the tariffs

• Taxicard members would experience a negative impact if the tariffs were increased as it would mean fares increase. This could mean that Taxicard members cannot travel as far before the capped fare is reached. It could also mean that the capped fares need to be increased or that Taxicard members cannot afford to travel as often
• Taxicard members would experience a negative impact if the tariffs were increased, and this means fewer taxi drivers are willing to do Taxicard work and instead more taxi drivers only focus on on-street hails and work from taxi ranks as the full metered fare is charged and they receive this
• Taxicard members may experience a positive impact if increasing the tariffs means that taxi drivers continue to work or the number of people applying to become a taxi driver increases. This could help ensure that taxis are available when Taxicard members want to travel or wait times are reduced

No change to the minimum fare or tariffs

• Taxicard members may experience a positive impact if no change is made to the tariffs as the fares will not increase
• Taxicard members could experience a negative impact if no change is made to the tariffs, despite taxi drivers’ operating costs and average national earnings increasing. This could mean some taxi drivers stop working at certain times or stop being a taxi driver altogether. It could also deter people from applying to become a licensed taxi driver. This could reduce the supply of available taxis or increase wait times for Taxicard members
• Taxicard members could also experience a negative impact if no change is made to the tariffs as this could deter taxi drivers from accepting Taxicard jobs, as they only receive 90 per cent of the metered fare, and mean taxi drivers focus on doing more on-street and taxi rank work, as they receive the full metered fare for these trips