Transport for London’s Board has approved changes to taxi and private hire licensing fees to come into effect from 1 April 2010.

Inflationary pressures would have ordinarily justified an overall 1.4 per cent increase on most licence fees, but given the current economic climate, a freeze, and in some places a reduction on fees has been agreed.

The fees to be frozen at 2009 rates include:

·         Taxi driver three year licence fee

·         Taxi annual licence fee

·         Private hire licence application and inspection fee

·         Private hire operator licence application fee

·         Private hire operator five-year licence fee

All funds generated from taxi and private hire fees are used to cover licensing and administration costs. The additional funding generated by an increase in these fees would have been around £261,000 however TfL is confident of being able to make up the difference via efficiency savings instead, including reviewing existing business policies and processes, identifying and reducing waste and ceasing non-business critical activities.

The TfL Board also approved a £10 reduction on the London taxi licence application and inspection fee, bringing it down from £111 to £101. Tied to that will be the introduction of a £50 re-test fee to encourage more taxi drivers and vehicle owners to ensure their vehicles are in top condition and pass their annual and on-street or other inspections first time. This is stemmed from a concern at the low first time pass rate, which is currently at 38 per cent and to encourage drivers and owners to ensure the general standard of the vehicle is compliant at all times.

For private hire operators, changes to the fee structure for removing or adding operating centres will also begin from 1 April. The fee payable for removing an operating centre from a private hire vehicle operator’s licence will increase from £25 to £50, and the fee for adding a new centre will increase from £25 to £200. These fees have not risen since 2001 when operator licensing began, and reflect more accurately the significant costs involved in processing the licences.

John Mason, TfL’s Director of Taxi and Private Hire, said: “Every penny that TfL receives from license fees is spent on providing the services we deliver and I am committed to providing the best quality service whilst reducing back office costs. This is why I felt that we should freeze most license fees this year and work hard to find savings instead.

‘’I know that there will be many in the trade that may be wary of the introduction of a taxi re-test fee but we have to do everything we can to increase the first time pass rate and encourage everyone in the trade to do all they can to keep the standard of vehicles maintained at all times. By making these changes those who pass their annual inspection will benefit from a £10 reduction in the current cost and will no longer subsidise those drivers that continually fail. Whilst we expect that over the course of the year the income from taxi vehicle tests will cover the cost of providing the service, if there is any surplus at all then this will be used next year to make further reductions to the test fee.”

In addition to these changes, the one-off Knowledge of London ‘appearance’ fee for Suburban (Yellow badge) taxi driver applicants will increase to £200 to be in line with the fee for All-London (Green badge) applicants.