Uber, Addison Lee to be hit by new TfL fees
The cost for large private hire operators is set to skyrocket in the capital, as Transport for London confirmed major changes to the way it charges licensing fees for private hire operators on Monday.
The local government authority said the changed fees would more accurately reflect the resources required to regulate firms, based on the size of their operations.
It said London’s private hire industry had grown dramatically, from 65,000 licensed drivers in the 2013-2014 year, to more than 116,000 today.
The number of vehicles had increased from 50,000 to 88,000 over the same period.
With that growth, there had been a “substantial increase” in the cost of ensuring private hire operators fulfilled their licensing obligations and in tackling illegal activity to keep passengers safe.
TfL estimated that over the next five years, enforcement costs alone would reach £30m, up from a previous estimate of £4m.
“There has been a huge growth in the industry in recent years and it is only fair that the licence fee reflects the costs of regulation and enforcement,” said TfL’s general manager of taxi and private hire, Helen Chapman.
“The safety of Londoners is TfL’s top priority, and the changes to fees will help us fund additional compliance officers who do a crucial job cracking down on illegal and dangerous activity.
“We have listened to the views of stakeholders in the consultation and have amended the fees structure to give small and medium-sized operators more flexibility in how they manage the size of their fleets.”
Previously, a ‘small’ operator, with no more than two vehicles, would pay £1,488 and a ‘standard’ operator – those with more than two vehicles, regardless of the size of its fleet - would pay £2,826 for a licence lasting five years.
The new fee structure, approved by the TfL finance committee, would replace the existing two ‘tiers’ with eight; with charges ranging from around £2,000 for a five year licence for those with 10 vehicles or fewer, to £464,000 per year for the largest operator.
In practice, it would mean an operator with more than 10,000 vehicles would pay a total of £2.9m for its application and grant of a five-year licence.
The changes would hit large operators, such as minicab firm Addison Lee and app-based car hailing service Uber, the hardest.
TfL said that would ensure the licence fee structure for private hire operators reflected the costs of compliance activity, according to the scale of each operator.