Plan Insurance Blog

What Next for the Taxi and Private Hire Industry?

2018 proved to be a year full of impactful events for the industry, with the ongoing Uber court case surrounding drivers status, the introduction of the electric taxis and the massive bombshell dropped by TfL, ruling that Private Hire Vehicles will be required to pay the Congestion Charge in London. Here, we look at what 2019 may have in store, with our Taxi and Private Hire Industry Predictions.

Year of the apps

With over 15 Taxi Apps fighting for market share in London alone, many may say the app revolution is already amongst us. However, the soft merger of private hire companies certainly plans to transform how operators approach providing their own ride-hailing services. Starting back in 2017, the soft merger initiative allowed multiple private hire companies to come together virtually and form a larger fleet, despite them keeping their individual business identities. As it gives each of the private hire and taxi companies full control over their own business, pricing structure and drivers, the owners are becoming more welcoming to the idea of joining the job sharing pool as it also enables them to compete on a more even footing with the ride-hailing start ups. It’s anticipated that this year could see as many as 27 taxi apps available in the UK with the London market likely to be their main focus.

Electric Taxi Growth

Electric Taxis certainly proved popular over the course of 2018, and we expect this surge to continue into 2019. Right until the end of the year, we saw the demand for electric taxis increase, with LEVC announcing that in October, they registered 172 electric taxis UK wide in what is traditionally labelled as a quieter month for the trade. Martin Crouch, General Manager of LEVC’s Retail Business shared his thoughts on the record month of October:

“We were delighted to pass another key business milestone – doubling our output from last year and achieving our best October for customer handovers in London for almost twenty years. Importantly, we have ramped up production to meet rising customer demand – and cab drivers can now expect to wait only a few weeks for vehicles ordered now.”

As drivers, particularly those that already rent, begin to appreciate the value of the electric taxi and the clear budget savings one can make in fuel savings alone, it may be the year when more drivers take a leap of faith and switch over to the TX eCity on mass. TfL’s licensing of Nissan’s electric taxi is also eagerly anticipated by drivers.

Battle to retain driver numbers following ULEZ, congestion zone charge and higher operator costs

From April 8 2019, the current T-charge will be replaced by the Ultra-Low Emission Zone. The charge operates 24/7 and will force drivers of the most-polluting vehicles to stump up £12.50 a day to drive within certain zones in central London. It will run alongside the current Congestion Charge which means motorists who do not comply with the ULEZ standards will face a daily bill of £24. This move will certainly put ’ drivers of non-compliant vehicles in a challenging position. Especially as they may also have to deal with the surge in operator costs being passed down to them. Latest DfT statistics show that the number of PH Driver licences issued is down 3.5% and they also reveal a 2.3% drop in the total number of licensed PHV operators in London since 2017. It’s clear to see how the regulations passed down by TfL have impacted the PH industry. It seems that some full and part-time drivers who widely operate in this area will choose to quit the industry as they may not be able to afford to cover the cost of the charge and also cover their overheads. Another option for them will be to consider upgrading their vehicles to a zero emission capable model. However, they will face higher monthly repayments due to the increased vehicle value and are also likely to incur fees to exit their existing lease agreements, as the ruling was only introduced with 5 months notice. This matter seems far from resolved however, as operator representatives such as the LPHCA intend on fighting TfL’s CCZ decision.

Uber to continue to fight drivers status case

Following their failure to win their appeal against the 2016 tribunal decision which ruled their drivers to be workers, rather than self-employed, it’s expected for Uber to take this battle to the Supreme Court this year. An Uber spokesperson shared his thought on the Court’s decision:

“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. Drivers who use the Uber app make more than the London Living Wage and want to keep the freedom to choose if, when and where they drive.”

Should they fail to win in Supreme Court, the ride-hailing company will certainly have to tread carefully as the Court’s decision could see many drivers who prize their self-employed freedoms looking for an early exit. In these circumstances, it appears likely that if they’re allowed to by law, Uber would want to offer drivers a bespoke model, whereby individual basis can opt whether or not to be classed as employees?

2019 will certainly present some changes for drivers, operators and the wider community. Share your predictions with us on Twitter @PlanInsurance