Taxi fares explained

Taxi fares can sometimes be a source of dispute between a taxi driver and passenger, with the latter often not understanding quite how the tariff rates work. The best way of defusing a disagreement over a fare is to explain to the confused passenger how their charge has been calculated.

To be able to do that, you need to know exactly how fares are worked out. When your taxi meter is doing all the work for you, you don’t necessarily have to know the breakdown of how fares are calculated.

But, if you want to minimise your risk of becoming embroiled in an avoidable dispute over a fare, you should make it your business to find out.

 

Fare-based disputes on the rise?

We’re increasingly seeing reports of fare-based rows breaking out between cabbies and passengers in the news. And some taxi drivers are not doing the industry any favours to make it less of an issue.

In November 2019, a taxi driver in Dublin, Ireland admitted a guilty plea to “secretly using a remote control to increase fares”. Robert Griffin was fined €750 after he pleaded guilty to 280 counts of over-charging contrary to the Taxi Regulation Act.

Meanwhile, in Liverpool, video footage captured an angry row that broke out between a taxi driver and a customer who accused him of over-charging.

During a ride, passenger Nicola Davies noticed that the taxi meters was on the “wrong tariff”.

“Both me and my partner are the children of cabbies – so we know the law,” she told the Liverpool ECHO. “I regularly get hackneys home from town and it is usually around a maximum of £21 but this was already over £25 when we weren’t even close to home.”

There have been other incidents, too, of taxi drivers overcharging wheelchair users. Taxi drivers face a fine of up to £1,000 if they refuse to transport wheelchair users or attempt to charge them extra, as per a law introduced in 2017.

So, you might say that the distrust between drivers and passengers is close to breaking point. A little transparency could go a long way to repairing some of that suspicion.

Who sets taxi fares and tariffs? 

Local authorities, who license taxis, are responsible for setting the maximum fares that can be charged to passengers.

Taxi companies or drivers can set lower fares and offer special discounts if they choose but are unable to charge more than the current maximum.

If you go to your local authority website, you should be able to find a table of fares for hackney carriages. In London, Transport for London (TfL) is responsible for reviewing and setting taxi fares and tariffs.

You will find different tariff rates depending on when a passenger requests a ride. Using London as an example, TfL has created four different tariffs (including the tariff rate for longer journeys:

• Tariff 1 – Applies from Monday to Friday between 05:00 and 20:00, other than on a public holiday.
• Tariff 2 – Applies from Monday to Friday between 20:00 and 22:00 or on Saturday or Sunday between 05:00 and 22:00, other than on a public holiday.
• Tariff 3 – Applies between 22:00 on any day and 05:00 the following day or at any time on a public holiday.
• Tariff 4 – For any journey that’s over six miles.

When the journey goes beyond the boundary of town or city that you’re operating in, the tariffs don’t apply.

Drivers are encouraged to inform a passenger how much their journey will cost them prior to setting off.

Providing that the passenger doesn’t ask for a change to the journey en route, the pre-agreed fare should stand.

 

What about private hire fares?

The tariff rates only apply to hackney carriages. The local council does not set fares for private hire vehicles.

Some private hire vehicles choose to have a meter fitted and use the same fares as hackney carriage vehicles. But it’s up to the discretion of the private hire operator.

Again, to avoid fare-based disputes, drivers not using taxi meters should inform passengers what the approximate cost of the journey will be before they set off.

This not only helps with disputes, it ensures the passenger has enough money to pay for the journey to start with.

Uber drivers are operating using a private hire licence, so the hackney carriage fares don’t apply to them.

However, when booking an Uber ride via the app, users are given an estimate price for their journey on the screen.

This price is based on the traffic and the hour at which the journey is attempted, meaning it is subject to change depending on the availability of drivers.

If you want to have a more in depth understanding of the differences between Uber and taxis, read our article on this.

Make sure your drivers know the tariff rates

As a taxi company owner, you probably already know a lot of the information contained in this article. But do your drivers have the same knowledge of tariff rates?

It’s important that you make sure your drivers know how to operate a taxi meter and always set the correct rate for the date and time of the journey and don’t try to take advantage of a passenger by charging them at the incorrect tariff fate.

 

Protecting your fleet

Running a taxi company is as much about minimising your risk as it is maximising the number of rides that you provide.

It’s important that you find the right taxi fleet policy to match the volume and requirements of the vehicles that are part of your fleet.

Taxi fleet insurance is available to fleets of three or more vehicles. It doesn’t matter if you have a fleet of black cabs, minicabs, minibuses, or a mix of vehicles – Taxi Insurer can help you find a policy that matches all your needs and covers all of the vehicles in your fleet, for a price that fits.

Taxi fleet insurance might also include driver cover, depending on the age and experience of the driver.

With only one policy to remember to renew each year, you can put all your effort into making your taxi business a success.

Getting a taxi fleet insurance quote that fits with your business requirements is easy with Taxi Insurer.

Get a no-obligation taxi fleet insurance quote today.