Uber’s London licence to soar from £3,000 to £3m
Ride-hailing app hit as regulator overhauls fee it charges private hire operators
Uber’s licensing costs in London will rise from £3,000 to £3m during the next five years, as the city’s transport regulator confirmed plans to overhaul the fees it charges private hire operators.
Transport for London said on Monday that it will change the fees for operating licences based on the size of companies’ operations from this week, in order to meet the rising costs of regulation.
The move is the latest development in a long-running battle by TfL to deal with the growing number of private hire cars in the UK capital.
Helen Chapman, TfL general manager of Taxi & Private Hire, said: “There has been a huge growth in the industry in recent years and it is only fair that the licence fee reflects the costs of regulation and enforcement.”
The number of licensed private hire drivers has expanded from 65,000 in 2013-14 to more than 116,000 today, according to TfL. The regulator estimated that the costs of enforcement during the next five years will reach £30m, up from a previous estimate of £4m.
Under the new rules, the cost of a five-year operating licence will be based on the size of the operator’s fleet, with a new eight-tier structure.
Charges range from about £2,000 for a five year licence for operators with 10 vehicles or fewer, to £2.9m for the largest with more than 10,000 vehicles — namely Uber, which has 40,000 drivers in London. The US ride-hailing group is due to have its licence renewed at the end of September, when it will be subject to the new fee scale.
The £2.9m charge that will apply to Uber is higher than initial plans outlined in April. However, Addison Lee, the second-largest operator in the capital, faces a lower fee than initially thought. It is no longer included in the top tier, and faces a fee of £700,000.
Ms Chapman said: “The safety of Londoners is TfL’s top priority, and the changes to fees will help us fund additional compliance officers who do a crucial job cracking down on illegal and dangerous activity.
“We have listened to the views of stakeholders in the consultation and have amended the fees structure to give small and medium-sized operators more flexibility in how they manage the size of their fleets.”
Uber did not comment on today’s changes, but said it has previously supported the principle of larger operators paying higher fees in consultation responses.
The ride-hailing app has long been criticised for increasing road congestion and pollution with its large fleet. In July, MPs called for a cap on the number of Uber cars on London roads in a cross-party report on the future of UK taxis, backed by London black cab drivers.
Addison Lee said: “We recognise that these measures need to be paid for and are grateful that TfL has listened to our consultation response and developed an equitable framework for the charges necessary to cover the enforcement work they will undertake.”