Where Now For The Taxi Industry? | Coversure

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Where Now For The Taxi Industry?

The taxi industry has revolutionised in the past 13 years. Uber’s launch has changed everything from the way we hail cabs to the number of people needing taxi insurance.

There are lots of great reasons to become a taxi driver – flexible hours, a variety of clientele, lots of autonomy, and an average salary of £32,132.90. Here at Coversure Redditch, we’ve helped hundreds of taxi drivers – be they private hire drivers, public hire drivers, taxi fleet owners, or Uber drivers – get great value taxi insurance quotes for their cab, minibus, or multi-purpose vehicle, and we’ve noticed things are changing.

In this latest blog, we’ll look at some of the key trends affecting the UK taxi and private hire industry and how these are likely to impact taxi drivers now and in the future.

What Are The Key Trends Driving Change In The Taxi Industry?

1. Changes in Travel behaviour – The last few years have been difficult for the UK Taxi Industry; this is reflected in the decline in the number of licensed taxis and private hire vehicles (PHVs). The latest figures show there are 260,700 licensed taxis in the UK and PHVs, a decrease of 13% since 2020. Recent studies have shown that despite the lifted travel restrictions, the numbers using taxis or mini-cabs have not returned to pre-pandemic levels. The “All Change?” research programme, run on behalf of the Department of Transport, stated, “The pandemic has been an extraordinary ‘moment of change’ in travel behaviour.”

Alongside the pandemic, other global situations have also been impacting the UK taxi industry, oil prices, and climate change, to name just two.

2. Rising fuel prices and road charges – while pump prices have started to fall over the last week or so, according to RAC Fuel Watch the current UK average petrol price is £188.76p per litre, with diesel prices at £196.96. That’s an increase of over 20% compared to the average prices for this year. Despite the UK Government’s temporary cut to the fuel duty in March, taxi drivers are appealing for more support. We’ve seen calls from licensed Hackney Carriage firms to local authorities, which set maximum fares, to raise prices from 5-20% as their operating costs rise.

It’s not just fuel prices that are a concern; maintenance costs and the prospect of Clean Air Zone (CAZ) charging too. Currently, there are three cities (outside of London) with clean air zones – Bath, Birmingham, and Portsmouth – and while Greater Manchester is now looking to drop its plans to charge road users – more cities are looking to implement CAZs in 2022.

Considering rising fuel costs and charges if your vehicle exceeds emission standards, is now the time to switch to an electric taxi?

3. An Increasing Push Toward Electric Taxis – while electric vehilce (EV) car charging costs are on the rise, when compared to filling a cab with diesel or a mini-cab with petrol, the cost per mile is nearly 50% less, with the average cost to charge an electric vehicle currently around £48. Electric vehicle registrations accounted for 27.9% in April, demonstrating that increasingly electric vehicles are a realistic option for commercial vehicle drivers.

It’s a switch that our local authority and the UK government are keen to support. Electric taxis can now remain licensed in Worcestershire for 15 years, a rule change to incentivise greener transport. Funding once provided for general population plug-in car grants is now focusing on electric commercial vehicles, including taxis and public charging infrastructure. The lack of public charging points and the time it takes to charge versus fill a tank with fuel has been cited by many taxi drivers as an obstacle to switching. The latest reports show that the number of ultra-rapid charge points grew by 11% in Q1 2022. With Tesla starting to open up its ‘Supercharger’ network to all electric vehicles, hopefully, the infrastructure situation will only improve further during 2022.

Alongside manually-driven electric taxis, the so-called Robotaxis are expected to have substantially lower energy consumption and zero tailpipe emissions.

4. Robotaxi: The Next Big Thing? – in the last few months, we’ve seen the approval for operations of autonomous taxi services in the US and China. As well as being electric and zero-emission the other most significant advantage often quoted is their lower crash per mile statistics. The biggest issue is the computer’s ability to predict the actions of its fellow human drivers on the road. While the global autonomous vehicle is projected to be worth $2,161.79 billion by 2030, there’s still some way to go before we see widespread adoption of this technology.

The global VTOL (Vertical Take Off and Landing) market is another sector said to “blossom” in the coming decades, with Morgan Stanley estimating that the market could be worth $1 trillion by 2040.

5. Flying Taxis To Take Off? – with Air-One, the world’s first hub for flying taxis, opening in Coventry in April, there’s been lots in the news about the prospect of reducing congestion and carbon emissions by utilising electric VTOL vehicles. While companies developing the infrastructure and vehicles themselves are claiming expansion and significant progress will be made in the next few years, with no Air Taxi regulations yet in place, the reality is likely it will be some time before we are all taking to the skies to get to the station. And unless you’ve got a pilot’s license and taxi driver’s licence, you’ll likely be remaining on four wheels… for now at least.

Where Now For The Taxi Industry?

While we’ve no crystal ball, one thing we do know is that finding the right insurance for your taxi is vital. With our wide panel of high-quality insurers and competitive rates, we can help you save money and find the right insurance for your vehicle, so call us on (01527) 757 585 or email Coversure Redditch here to get a competitive taxi insurance quote.

Taxi Driver Salary in UK – Check-a-Salary Latest Data (checkasalary.co.uk)
Taxi and private hire vehicle statistics, England: 2022 – GOV.UK (www.gov.uk)
Travel behaviour, attitudes and social impact of COVID-19 – GOV.UK (www.gov.uk)
Latest petrol and diesel prices | RAC Fuel Prices | RAC Drive
Worcester taxi fares set for 20% rise after council backing – BBC News
Clean air zones – GOV.UK (www.gov.uk)
Plug-in grant for cars to end as focus moves to improving electric vehicle charging – GOV.UK (www.gov.uk)

UK’s ultra-rapid charge points grew 11% in Q1 2022, reports Zap-Map

Teslas using driver-assist systems were involved in 273 crashes over the past 9 months, according to NHTSA – CNN
GM’s Cruise wins first California permit to carry paying riders in driverless cars | Reuters
The Global Autonomous Vehicle Market Will Grow to $2,161.79 billion by 2030, at a CAGR of 40.1% – ResearchAndMarkets.com | Business Wire

World-first hub for flying taxis, Air-One, opens in Coventry, UK, heralding a new age of zero-emission transport — urban-Air Port Ltd (urbanairport.com)
Proposed Air Taxi Regulations Reveal Possible Future of eVTOL – FLYING Magazine

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