Operators face vast rise in licence costs as TfL deems the system “unfit for purpose”

Transport for London is proposing a major shake-up of the London licencing structure, with major increases in fees for operators across the board.

Under a new system of bands, operators will be charged on an increasing scale based on the number of vehicles on strength. This will replace the current simple system, under which small operators, with no more than two vehicles, currently pay £1,488 for a five-year licence, while standard operators, with more than two vehicles, pay £2,826.

Under the new system the largest operators, with more than 1,000 vehicles, would be charged £166,518 for a five-year licence, plus £68 per registered vehicle. For Addison Lee, with 5,000 vehicles, this would result in fees of in excess of £500,000. And Uber, which boasts of having about 30,000 drivers in London, would face a licensing bill of more than £2.2 million.

Even smaller operators will be hit – indeed, only these with between three and 10 cars will see a fall. An operator with 11-20 cars would have to pay £5,190 for a five-year fee, while the step up to 21 cars would see a massive hike to £22,014 – which could cripple a small operator.

The rise is even worse for those with more than 100 cars – they will have to pay £166,518 for a five-year licence. A consultation on the proposed changes has been launched, which closes on June 16.

TfL said the higher fees reflect the increased licensing and enforcement costs it faces in regulating the sector, and that the fee rise would help pay for the 250 additional compliance officers that are called for in the London Mayor’s 2016 taxi plan.

TfL estimates that during the next five years, enforcement costs will reach £30m, compared with a previous estimate of £4m. The total cost for licensing, enforcement and compliance for the taxi and private hire trade during the next five years will be £209m, according to TfL

Helen Chapman, general manager of taxi and private hire at TfL, said: “The operators’ fees system is no longer fit for purpose. It is only fair that licence fees for private hire operators accurately reflect the costs of enforcement and regulating the trade.”

The move is seen as another bid by TfL and the London Mayor to curb the number of private hire vehicles on London’s streets. The number of licensed drivers has jumped from 65,000 in 2014 to more than 117,000 today, while the number of vehicles has increased from 50,000 to 87,000 over the same period. 

TfL proposed fee structure for Private Hire operators

Fleet size	No. of operators	5-year fee
0-10	1,126	£1,968
11-20	511	£5,190
21-100	877	£22,014
101-1,1000	113	£166,518
1,001+	2	£166,518 + £68 per car

Source: TfL