London taxi fares to rise by two-and-a-half times inflation in bid to curb driver exodus

London black taxi fares are to rise by almost 7.5 per cent from April under proposals due to be rubber-stamped on Wednesday. Transport for London has recommended the increase – two-and-a-half times the current rate of inflation – despite concerns that it will have a disproportionate impact on disabled Londoners who rely on the cabs.

TfL said the rise was necessary to cover the increasing cost of running a cab and to “try and ensure that taxi driving remains a viable career”. TfL sets taxi fares and regulates the industry but does not have any say in the fares charged by minicab firms or drivers working on apps such as Uber.

TfL’s finance committee is expected to approve a 40p increase in the minimum taxi fare – meaning the meter will start at £4.20 – and a 5.05 per cent increase in most of the tariffs, which vary according to the time of day the journey is made. The overall effect will be to increase average fares by 7.48 per cent, equal to a calculation which measures the cost of running a cab and which also compares cabbies’ earnings to other wage rises.

In April 2024, the minimum fare was frozen but the tariffs were increased by 8.9 per cent. The rate of inflation was three per cent in January, the most recent figure available. TfL says it tries to strike an “appropriate balance between taxi drivers being fairly paid and taxi users getting fair, reasonable and affordable fares”.

The taxi industry had sought the increase, saying that a failure to increase fares “would mean taxi drivers were unfairly penalised and would exacerbate the existential problem of falling taxi driver and vehicle numbers”. But London TravelWatch, the passenger watchdog, said it was important not to price passengers out of using taxis. It said high fares and fare increases were likely to “disproportionately disadvantage people who rely on taxis for accessibility or safety reasons”.

Transport for All, the accessibility charity, said the minimum fare and the daytime, evening and weekend tariffs should be frozen. It said that disabled people already faced higher living and transport costs, and relied on taxis. The consequences of fare increases for Taxicard members – which offers disabled people subsidised taxi journeys - would be “particularly severe”, as members would reach the capped fare limit more quickly, forcing many to make fewer journeys or travel shorter distances.

The changes mean passengers will be charged between £4 and £5.12 per mile, depending on the time of day their journey takes place. TfL said the cost of running a cab had increased due to higher vehicle costs and a “large increase in insurance”. A consultation at the end of last year asked whether taxi fares should be frozen, increased by 4.2 per cent or increased by 7.48 per cent.

Respondents were asked to rate London taxis on value for money. Just under half (49 per cent) said they were good or very good value for money, with 31 per cent saying they were poor or very poor value for money. But separate research carried out by TfL found that 62 per cent of taxi users said they thought that in general taxi fares were too expensive, with 36 per cent saying they thought taxi fares were about right.

Hammersmith & Fulham council said the minimum fare and the tariffs should be frozen. But Westminster council backed the increase in the minimum fare and the tariffs that TfL is expected to approve. TfL said: “It is important that taxi drivers are fairly paid to try and ensure that taxi driving remains a viable career, licensed taxi drivers do not stop being a taxi driver and people will consider applying to become a licensed taxi driver.

“If the number of licensed taxi drivers falls, then this could affect the supply of taxis and increase the risk that taxi users are unable to get a taxi or have to wait longer for a taxi. “There could be an increased risk to the safety of some people if taxi wait times increase or they are unable to get a taxi; (f) the number of applications to be a licensed taxi driver and the number of newly licensed taxi drivers is very low.

“Although there was an increase in the number of applications to become a taxi driver in 2023, the number is still significantly lower than the number received each year up until 2015.”. “The number of licensed taxi drivers has been falling since 2013/14 and is now at its lowest since 1978.”.

TfL also revealed there has been significant increase in the number of taxis booked via phone apps rather than being hailed in the street. A total of 27 per cent of taxi passengers had used an app for their most recent taxi journey, and on average 19 per cent of taxi drivers’ work was from taxi apps.