Mayor of London Sadiq Khan has announced today that he is funding 100 Tesla Model 3 electric vehicles for the private-hire industry. This is being done in partnership with Vehicle-as-a-Service provider Breathe, supported by fintech Zeti’s pay per mile platform ZERO.
The funding of this zero-emission trial fleet follows the pay-per-mile funding of taxis that Zeti implemented using the Mayor of London’s Energy Efficiency Fund (MEEF).
Why is The London Mayor doing this?
As part of Sadiq Khan’s commitment to zero-emission transport in London, our capital city has a lot of work to do.
One of the main ways he hopes to achieve this is via the Ultra Low Emission Zone (ULEZ). In early March, The London Mayor’s Office proposed the expansion of the ULEZ zone to cover the whole of Greater London. The final decision will be subject to assessment and public consultation. If approved, this will take effect in 2023.
Experts believe that the Breathe fleet will save 338 tonnes of CO2 being released into the atmosphere per annum and achieve an average reduction in CO2 emissions equivalent to £5,137.
The key to the viability for drivers is MEEF funding
Sadiq Khan’s project is MEEF’s fund’s first investment to include both a debt and equity package.
Pete Radford, Director of MEEF, adds: “We are delighted that MEEF is supporting Breathe EV to offer a fully managed VaaS product to London’s private hire drivers, and in doing so, helping to accelerate the shift from conventional to electric vehicles in the Capital.”
MEEF is being supported by Triodos bank, which has given MEEF a significant chunk of capital for the project. This is MEEF’s fourth investment in the low carbon transport space. Since launching in July 2018, the investment firm has made investments in e-mobility, EV charging infrastructure, district heating, street lighting and energy efficiency.
Is Sadiq Khan’s idea scalable for the entire private-hire industry?
Jeff Davis, Director of Breathe, says: “Our mission is to provide large scale Electric-Vehicles-as-a-Service offerings and we are excited to start with sustainable, flexible and affordable vehicle subscription options for London’s private hire market. We are seeing huge demand for electric private hire vehicles, and MEEF’s funding allows us to expand our operations and help more drivers step into their first EV.”
Dan Saunders, CEO of Zeti, said that this initiative “recognises the contribution to clean and connected transport that the UK’s green fintech community is making. Beginning as providers of pay-per-mile financing for taxi fleets, and now with this further expansion to other fleet types like PHV fleets and subscription services, it shows how scalable, sustainable solutions are for tackling climate issues.
Powered by Zeti’s pay per mile platform ZERO, Breathe provides a subscription-based hire service for drivers. Drivers can choose between an ‘Everything Included Ownership’ model, which gives them the chance to own the vehicle after four years, or an ‘Everything Included Rental’ model, where the driver pays a weekly rental fee.
Breathe also gives users and fleet owners data and intelligence about their fleet. Operators will be able to monitor data on vehicle telematics and the overall carbon savings of the fleet based on the total mileage.
This is an interesting decision by the Mayor of London. To add some context since TFL introduced Congestion Charging and ULEZ Charging to Private Hire vehicles, the number of Private Hire Vehicles Licenses issued by TFL has dropped from well over 100K to around 80K (as of the middle of March 2022).
A significant reason for this is that drivers see no benefit of having a TFL licence. So many have opted to obtain licenses from other licensing authorities at a lower price than TFL.
Therefore, TFL has lost large amounts of revenue from drivers moving to alternative councils. So its interesting to see that the Mayor is funding EV’s for Private Hire Drivers, as this means these drivers can now avoid the Congestion Charge and ULEZ fees and TFL gets these drivers back paying them their license fees! So he gives with one hand and takes with the other.
We also wonder whether the Mayor should also launching a scheme to help London Taxi Drivers? As far as we’re aware, the Dynamo Taxi is no longer being produced, meaning that there is only one vehicle a London Taxi Driver can buy, which costs circa £65K. Where as a Private Hire driver can pick from a plethora of vehicles to buy and use that are half the price. In the interest of fairness, if the Mayor and TFL are helping one segment of the industry they should be helping the other side as well?