Call Me Now

Online Quote

Simply complete the details below to receive your insurance quote.

Call 0800 542 2740 Included free in call plans

Insurance Blog

Latest news, views and product reviews

Private Hire Cars to pay London Congestion Charge

Private Hire Cars to pay London Congestion Charge

Posted by Jesse Koranteng on December 19, 2018.

Sadiq Khan has today confirmed that as of 8 April 2019, Private Hire Vehicles (PHVs), such as Uber and Addison Lee will no longer be exempt from paying the weekday congestion charge for driving in Central London.

Private hire firms had previously been exempt from paying the Congestion Charge, but in a radical turn of events, TfL have chosen to nullify this decision, citing an urgent need to cut down on the number of vehicles on the London roads, which has partially increased due to the emergence of mobile private hire applications.

Further to this, minicabs that fail to comply with ultra-low emission zone rules, which come into effect from next April, also face also having to pay a 24/7 charge of £12.50.

Sadiq Khan shared his thoughts on this decision:

“We have to make tough decisions to protect the health and wellbeing of Londoners and tackle harmful emissions from the most polluting vehicles.

“Now we need private hire vehicles and taxis to play their part and help us clean up our filthy air responses.”

Alex Williams, TfL’s director of city planning, said:

 “This package of measures will contribute to fewer vehicles driving where pollution is most concentrated and encourage the switch from diesel to electric.”

Since the congestion charge was introduced back in 2003, the number of vehicles entering the zone each day has decreased by around 30%, TfL said.

However, the number of different PHVs entering the zone since its inception has increased from 4,000 a day to more than 18,000.

PHV Industry leaders had already warned the public of the effects of removing the congestion charge, speculating that fares would rise by 10-20 percent, while some would treble.

Steve Wright, Chairman of the Licensed Private Hire Car Association that represents operators announced:

“This in our view is discriminatory and we will do everything we can to challenge this disappointing decision. We have also been in touch with the Competition and Markets Authority (CMA), disabled groups and many others to outline the damage this would cause if it came into effect. We do not agree that removing the Congestion Charge exemption for Private Hire drivers in London is indeed fair, nor going to reduce congestion.”

Our Managing Director, Grant Georgiades shared his thoughts on this verdict:

In regards to improving air quality, “Without the charging infrastructure in place it may end up increasing pollution in the short term as hybrid vehicles that produce low emission levels are replaced with 0 emission capable vehicles that actually end up being run on their back up fossil fuel tank. This may be compensated by a reduction in the number of part time drivers who will leave the industry as they simply can’t cover the cost of the charge and cover their overheads.”

In terms of the private hire industry he says, “This measure will have a seismic impact on London’s private hire operators. I’m sure the LPHCA will attempt to fight its removal and they may gain a lot of support from the public as ultimately the cost will be passed down to the consumer either through less supply, which will push up per mile rates or the congestion charge being allocated directly on top of their fare. Firms that intend to pass on the charge will need to carefully consider how they model and monitor this – if they look to spread the cost against multiple journeys and the additional fares fail to materialise they could be severely out of pocket over the course of a year.”

He shares his sympathy for drivers, “They now need to make a serious decision in the very near future. Many drivers may consider upgrading their vehicles to a 0 emission capable option. However they will face higher monthly repayment amounts due to the increased vehicle values and they may also incur fees to exit their existing long term contract. A notice period of four months is simply not enough for the majority of self-employed drivers to accommodate the ruling without being penalised in some way. If they decide to not change vehicle or simply can’t afford to then they will need to consider how detrimental this will be to their earning capacity and potenially have to reshape their work routines, such as operating outside of CCZ hours in order to avoid these charges.”

It appears that turbulent times are ahead for operators, drivers and even the regulator if trade associations decide to fight the decision.

 

Meet the Author Jesse Koranteng

Jesse is the latest addition to the Plan's team. He loves football, sweets, and all things marketing.

to top