Plan Insurance Blog

Funding update: ULEZ for black taxis

In this blog we update cabbies with the latest information regarding their ULEZ requirements and the state of play with the Zero Emission Taxis that are due to hit the market.

We take a look at the most cost effective means for cabbies to be compliant with the new ULEZ regulations.

ULEZ requirements for taxi vehicles

The following is taken from most recent TfL ULEZ requirements update

“New licensing requirements are being introduced to reduce emissions from taxi and private hire fleets and increase the number of vehicles capable of operating with zero emissions.
Requirements for taxi and private hire vehicles (PHVs) are as follows:

  • From 1 January 2018, new diesel taxis will no longer be licensed in London
  • From 1 January 2018, all taxis presented for licensing for the first time will need to be zero emission capable; emit up to 50g/km CO2 with a minimum 30 mile zero emission range.
  • A zero emission capable taxi must be petrol if an internal combustion engine is used”

So cabbies wanting to own a diesel cab that will last them up to the end of 2032 have between now and January 1st 2018 to purchase and licence one.
The London Taxi Company’s TX4 that emits 80% less harmless pollutants than its predecessors is one option. However with the new taxi approaching nearly £50,000, many drivers in these challenging and uncertain times are finding the costs prohibitive.
Tx Taxi

Funding assistance

London taxi trade organisations have been calling for greater funding assistance for some time. They highlight the number of less expensive vehicle options available to the private hire market as justification of increased support.
With both the regulator’s requirements and government policy often being updated it’s understandable that some cabbies might be finding it difficult to keep up with exactly how much funding they will be eligible.
We’ve done our best to get to the bottom of what grants will be available. The below is taken from a recent TfL release on the funding available for 0 emission taxis –

  • TfL will provide grants of £3,000, on top of the Office for Low Emission Vehicle’s plug-in car grant, towards the purchase of a zero emission capable taxi from mid-2017 to 2020
  • TfL will introduce a voluntary decommissioning scheme from mid-2017 until 2020 to remove the oldest taxis from the fleet. Owners of taxis over 10 years old will be able to claim a payment of up to £5,000, depending on the age of the vehicle, from TfL by forfeiting the ability for that vehicle to be relicensed as a taxi in London

The London Assembly also released an update in September 2016 under the title, “Sadiq Khan heralds new era for London’s taxi and private hire trades.”
The post stated that as part of the Mayor’s Action Plan for the taxi industry, TfL has set aside £40 million to help drivers:

“From next year, up to £5,000 will be available to drivers who scrap the oldest and most polluting taxis. A grant of £3,000 will be provided towards the first 9,000 Zero Emission Capable (ZEC) taxis and TfL is asking the Government to guarantee the ‘plug-in car grant’ for these vehicles, which would take the total grant to £7,500.This is in addition to £25 million funding for the £3,000 top-up grants.”

From next year, owners of vehicles older than 10 years will have the option to receive a one-off ‘scrap’ payment of up to £5,000 – ‎depending on the age of the taxi – in return for no longer licensing it in London.
The Mayor is calling on Government to support this initiative with a national diesel scrappage scheme to help drivers dispose of the vehicles and ensure they aren’t used elsewhere in the UK.
emissions map

Taxi top-up grants

The Government published a paper on the issue in March 2015 entitled £20 Million Ultra Low Emission Vehicle Taxi Scheme. It states that “Taxi Top-up Grants” will be made available in selected areas across the country to “provide funding above the level of the plug-in car grant” to support the purchase of “purpose-built, ultra low emission taxis.”
However at the time of publication there was “insufficient pricing information” available to enable an amount to be set, without the risk of contradicting state aid rules.
Unfortunately not much has become apparent on the ultra low emission taxis pricing front in the last two years, but that’s a topic for another blog post!

So as it stands it appears that drivers could be eligible for £12,500 in the form of:

  • £4,500 “plug in grant” from government for car users
  • £3,000 from TfL on top of the ULEV grant
  • £5,000 from TfL for scrapping their diesel taxi.

Potentially the government’s plug- in grant amount could be increased depending on the success of the Mayor’s lobbying and the final costs of the vehicles.
Commercial van users are eligible for up to 20% of the price of their vehicle up to a maximum of £8,000. Is it beyond reasonable expectations that this could be matched? If so it would take the funding to £16,000.
Regardless of whether this amounts to sufficient support to convince drivers to remain in the trade, there is another important question to ask. Is there going to be an electric taxi on the market for the cabbies to buy by January 1st 2018?