Taxi Fares Review 2024
Renfrewshire Council · 14 November 2024
Back to Regulatory Functions Board — 14 November 2024 and its agenda
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___________________________________________________________________ To: Regulatory Functions Board On: 14 November 2024 ___________________________________________________________________ Report by: Director of Finance & Resources ___________________________________________________________________ Heading: Civic Government (Scotland) Act 1982: Review of Taxi Fares within Renfrewshire ___________________________________________________________________ 1. Summary 1.1 The Council as Licensing Authority is obliged to fix scales for the fares and other charges in its area in connection with the hire of a taxi. The legislation, the Civic Government (Scotland) Act 1982 (“the 1982 Act”), provides that fares should be fixed within 18 months beginning with the date on which scales last came into effect. 1.2 The last Taxi Fares Review was carried out during 2022 and 2023 with a revised Taxi Fares Scale being fixed by the Deputy Traffic Commissioner following an appeal, who made changes to the scale which had earlier been agreed by the Board. The Deputy Traffic Commissioner determined that the new scale, with these changes, would come into effect as at 1 September 2023. The revised fares scale represented a change to the previous scale fixed by the Council, by: (i) increasing the minimum charge or Flag Fall from £3.45 to £4.05; (ii) increasing the additional charge, by maintaining the unit charge of 30p but reducing the distance to which that charge applies to 267 yards; (iii) increasing the charge for waiting time from 36p to 42p for each period of 2 minutes (or part); (iv) increasing the additional passenger charge (for each passenger in excess of four) from 60p to 70p; (v) allowing an increase in the Glasgow Airport pick up and drop off charge from £4 to £5; (vi) increasing the additional charge between midnight and 5am on
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Sunday to Thursday evenings from £1.60 to £1.90; (vii) increasing the additional charge between midnight and 5am on Friday and Saturday evenings from £2.00 to £2.30; and (viii) increasing the additional charge for journeys commencing after midnight on 24 December until midnight on 26 December, and from midnight on 31 December until midnight on 2 January, from £1.00 to £1.20. 1.3 On 2nd July 2024, the Council consulted with persons or organisations representative of the operators of taxis within its area on the current taxi fare scale, by email, requesting responses by 30th July 2024. One detailed response was received from Renfrewshire Public Hire Association within the above deadline, with another trade representative, Josephine Gatley, indicating her support for that response on 31st July. The responses are further detailed at Paragraphs 3.4.1 to 3.4.2 of the report. 1.4 The existing scales require to be reviewed and new scales proposed by the Board. Thereafter, formal notification of the proposed new scales will be given via a newspaper advertisement in the local press in order that representations may be made on the agreed proposal by a specified date at least one month from the date of the newspaper advertisement. 1.5 A further report will thereafter be submitted to the Board after the last date for making representations in order that the representations can be considered and the new fare scale can be fixed. The date for the new taxi fares scale to come into effect requires to be decided by the Board. ___________________________________________________________________ 2. Recommendations 2.1 It is recommended that the Board:- (i) review the existing fares scale shown at Appendix 1 and consider the proposal received and decide whether this proposal, or other fares scale, should be proposed as a new taxi fares scale for Renfrewshire and included in the newspaper advertisement as detailed in paragraph 1.4 above; (ii) agree a proposed date of Monday 14th April 2025 for the proposed revised fare scale to come in to effect; (iii) note that, if approved by the Board, the proposals will be advertised in the local press, and thereafter
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(iv) agree that the last day for lodging representations following on the proposed fare scale being advertised shall be one calendar month after the date of publication of that advertisement. _________________________________________________________ 3. Background 3.1 Prior to fixing a new Taxi Fares Scale, the Council as Licensing Authority requires to consult with persons or organisations appearing to it to be, or be representative of, the operators of taxis in its area, review the existing fares scales and propose new scales and publish these in a local newspaper. 3.2 Consultation has taken place with organisations appearing to the Licensing Authority to be representative of operators of taxis operating in the area, namely:- • Renfrewshire Public Hire Association • Unite • Alpha Taxis • Glasgow Airport Booking Office • Renfrewshire Cab Company • Johnstone TOA • Paisley Taxis Ltd • Renfrewshire Radio Taxis Ltd • Raymond Stanley • Paisley Independent Operators 3.3 Consultation was by email of 2nd July 2024, requesting responses by 30th July 2024. 3.4 The responses received are summarised in paragraphs 3.4.1 to 3.4.2 of this report. 3.4.1 Proposal 1- Proposal 1 is from Renfrewshire Public Hire Association (“the Association”). They suggest a number of increases and also provide a report in support of their proposal from Vector Transport Consultancy. Specifically, they propose increases in the Flag Fall from £4.05 to £4.35 and an increase in the additional distance charge, by retaining the unit charge of 30p but changing the measure of distance from 267 yards to
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252 yards. They also suggest an increase in the waiting time charge from 42 to 45p, based on the existing unit of 2 minutes (or part of that period). Finally, they propose various changes to the additional charges on the existing tariff. They seek to increase the charge for passengers in excess of four passengers from 70p to 75p. They seek increases in the existing late night charges from £1.90 to £2 and from £2.30 to £2.45, respectively. They also seek to increase the additional charges during the festive period from £1.20 to £1.25 and an increase in the soiling charge, which has been static in recent years, from £50 to £100. The Association also ask the Board to allow flexibility with regard to Glasgow Airport pick up and drop off charges, to allow the taxi trade to recover these as and when they are increased by the airport authority, rather than having to await completion of the next statutory fares review process. Officers have previously advised the Board that they are required to fix maximum fares and charges for the operation of taxis in their area. However, officers are aware that some licensing authorities have allowed flexible charges, for example “as per current barrier value according to local signage”, at airports and ferry terminals. The rationale for the Association’s fares scale proposal is set out in a report from Vector Transport Consultancy, attached as Appendix 3. Comments on the report by officers are attached at Appendix 4. 3.4.2 No other detailed proposals have been received. However, as stated above, a response in support of the above proposal was received from Mrs. Gatley of Renfrewshire Radio Taxis Limited, shortly after the consultation deadline. 3.5 The fares as existing and as proposed are summarised at Appendix 1. 3.6 In relation to the current rate of inflation, the Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August. The largest downward contribution to the monthly change in the CPI annual rates came from transport, with larger negative contributions from air fares and motor fuels. Further information in relation to the CPIH and the CPI is available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/cons umerpriceinflation/september2024 Additional information regarding inflation in the period since Vector Transport Consultancy’s report in relation to the previous fares review, which was taken into account by the Traffic Commissioner during the
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appeal in August 2023, has been included in their report in support of the proposal received at Appendix 4. 3.7 In terms of a Circular, 25/1986, reference is expected to be made by the licensing authority to, inter alia, the capital costs of vehicles, the cost of maintaining and replacing them to the standards required, the costs of employing drivers and the prevailing level of wages and costs in related road transport industries. The Circular also sets out a view that the public interest is better serviced by ensuring the maintenance of an adequate taxi service by giving the trade a fair return than by depressing fares for social reasons, however understandable. It states that, if fares are fixed at a level higher than the market can stand, then the trade is free to reduce them. The full Circular can be accessed at: https://www.gov.scot/publications/circular-25-1986-licensing-taxis- private-hire-cars/documents/ 3.8 Members will wish to consider the terms of the “Taxi and Private Hire Car Licensing - Best Practice for Licensing Authorities and Taxi and Private Hire Car Operators” (3rd Edition), which can be accessed at the following link: https://www.gov.scot/publications/taxi-private-hire-car-licensing-best- practice-licensing-authorities-taxi-private-hire-car-operators-3rd- edition/documents/ In particular, Paragraph 2.3 of this Best Practice Guidance recognises that a balanced approach is beneficial when setting taxi fares between the expectations of taxi drivers/ operators to earn a living, against the backdrop of a cost of living crisis and against the public expectation to be able to hire a taxi of reasonable quality at a reasonable price. Section 6 of the document also contains further guidance in relation to taxi fares. 3.9 Appendix 2 to this report shows fares under the current and proposed fares as they would affect standard journeys of between 1 mile and 5 miles within Renfrewshire. 3.10 The report from Vector Transport Consultancy referred to at Paragraph 3.4.1 is attached as Appendix 3, as stated above. Comments from officers in response are set out at Appendix 4.
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___________________________________________________________________ Implications of the Report 1. Financial – there will be costs associated with the production of new fare scales, cards and advertising costs which will require to be met from existing budgets. 2. HR & Organisational Development - Nil 3. Council and Community Planning- • Our Renfrewshire is safe – the continued monitoring of taxi licensing contributes to safer communities. 4. Legal – (i) Section 17 of the Civic Government (Scotland) 1982 as amended provides that the maximum fare for the hire of taxis and other related charges shall not be greater than those fixed under that Section by the Licensing Authority. The amended section states that the Licensing Authority must fix scales for the fares and other charges within 18 months beginning with the date on which scales last came into effect. (ii) The Licensing Authority may in fixing scales alter fares or charges or fix them at the same rate as existing charges. (iii) Before fixing a new taxi fare scale, the Council must consult with persons appearing to be representative of taxi operators, review existing scales and propose new scales and advertise its proposal in a newspaper circulating in its area detailing the proposal the date when it is proposed to come into effect and stating that representations may be made within a specified period (ending at least one month from the date of the advertisement). (iv) if any representations are received, the Council require to consider these before fixing a new fares scale. 5. Property/Assets-Nil 6. Information Technology – Nil 7. Equality & Human Rights – The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations
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contained in the report because it seeks a review only of taxi fares, which the Council has a statutory duty to review at regular intervals. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety - Nil 9. Procurement – Nil 10. Risk - Nil 11. Privacy Impact - Nil 12. Climate Risk – Nil, as the report only sets out proposals received for new taxi fares in Renfrewshire for consideration by the Board and that, once a proposed new fares scale is agreed, these will be advertised. 13. Children’s Rights – the recommendations in the report are not considered to be incompatible with the UNCRC. 14. Cosla Policy Position - Nil _______________________________________________________ List of Background Papers (a) Background Paper 1 - None ___________________________________________________________________ Author: Douglas J. Campbell, Managing Solicitor (Licensing), 0141-487-1096 douglas.campbell@renfrewshire.gov.uk
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APPENDIX 1 CURRENT AND PROPOSED TAXI FARE SCALES Fares to Places Beyond the Renfrewshire Area Boundary The driver is not obliged to accept the hire. Any hire terminating outwith the Renfrewshire area will be charged at a rate to be agreed at the time of hire. Fares chargeable for journeys where a taxi is hired on an exclusive basis shall be charged in accordance with the normal fares scale determined by the Council, but shall be modified where a taxi is hired on a shared basis according to the number of hirers sharing the vehicle, as follows: 1. One hirer 100% of the fare 2. For two hirers 100% of the first hirer to the point of the second hirer and thereafter both pay 75% of the standard fare each 3. If three hirers As above to the point of the third hirer and thereafter all pay 65% of the standard fare each Current Proposal (1) Fares by Distance Minimum fare for a distance not exceeding ½ mile £4.05 £4.35 For each additional yards or part thereof 267 yards/ 30p 252 yards/30p Fares for waiting time For each period of 2 minutes or part thereof 42p 45p Extras For each passenger in excess of 4, a fifth passenger charge of (applicable to 5, 6, or 7 seater taxis) 70p 75p An additional charge for journeys commencing after midnight and before 5 am Sunday to Thursday £1.90 £2.00 An additional charge for journeys commencing after midnight and before 5.00 am Friday and Saturday £2.30 £2.45 Glasgow Airport Terminal Departure Charge £5 Flexible per barrier An additional charge for journeys commencing after midnight on 24 December until midnight on 26 December and from midnight on 31 December until midnight on 2 January £1.20 £1.25 From midnight on 24 December until midnight on 26 December the fare chargeable shall be Normal Fare plus 1/3 (Tariff 2) no change From midnight on 31 December until midnight on 2 January the fare chargeable shall be Normal Fare plus 1/3 (Tariff 2) no change Soiling Fee Soiling in this context includes any soiling by means of food, drink, vomit, urine or excrement up to a maximum of £50.00 Up to a maximum of £100
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4. If four hirers As above to the point of the third hirer and thereafter all pay 55% of the standard fare each 5. If five hirers As above to the point of the third hirer and thereafter all pay 50% of the standard fare each 6. On departure from the taxi of one or more hirers the fare payable will revert to the rate appropriate to the remaining number of hirers
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APPENDIX 2 TAXI FARES REVIEW 2022 Table showing current fares tariff and proposed fares Proposal 1 Mile 2 miles 3 miles 4 miles 5 miles Current 5.25 7.05 9.15 £11.25 13.05 Proposal 1 5.55 7.65 9.75 £11.85 13.95
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APPENDIX 3 Report by Vector Transport Consultancy in support of Proposal received
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Review of Taxi Tariff in Renfrewshire July 2024
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Review of taxi tariff in Renfrewshire 2024 R1.docx Vector Transport Consultancy www.vector-consultancy.co.uk www.taxi-surveys.co.uk CONTENTS 1 BACKGROUND 1 2 COSTS ASSESSED 2 3 CONSIDERATION OF OTHER INFORMATION 8 4 CONCLUSIONS AND RECOMMENDATION 9
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 1 Vector Transport Consultancy www.vector-consultancy.co.uk www.taxi-surveys.co.uk 1 BACKGROUND 1.1 Introduction Vector Transport Consultancy have been commissioned by Renfrewshire Public Hire Association to undertake a review of the current taxi tariff, in July 2024, in response to an invitation from Renfrewshire Council to provide proposals for a revised taxi fares scale. Recommendations for adjustments to the taxi fares scale are made, based on cost changes since the last review. 1.2 Previous reviews The taxi tariff was revised in September 2023, based on costs calculated in October 2022, using the latest available data at that time. In order to assess relevant cost changes, we need to compare present day operating costs with those calculated in October 2022 and derive the proportionate change in cost between the two sets of data. The proportion of cost change is then used as the basis for recommending potential changes to the distance and time based fares used in the taxi tariff table.
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 2 Vector Transport Consultancy www.vector-consultancy.co.uk 2 COSTS ASSESSED 2.1 Overview of methodology A common approach to reviewing fares, is to use a basket of costs as a representative basis for comparing overall costs between dates. The combination of costs that is used to determine changes in cost, varies between licensing authority areas. The method used in this report to calculate the change in costs associated with operating a taxi in Renfrewshire uses several component costs which are associated with operating a taxi. These costs do not necessarily encompass all costs which are incurred by all taxi drivers and owners. The costs are intended to provide a reasonable basis for weighting the relative changes in cost for the main components of cost within the overall basket of costs. Indices of cost changes are available for several elements of motoring costs. The change in cost can vary by the element of cost. For example, the change in fuel cost can be relatively volatile compared with, for example, changes in the cost of tyres or indeed the change in vehicle purchase and depreciation cost. Therefore, it would not be reasonable to choose the variation in a single cost element (such as fuel) as the basis for deciding on changes in taxi fares. The cost indices should be weighted according to what proportion of overall cost each element represents. So, for example, if fuel accounts for say 11% of annual cost, then the fuel price index would be weighted to represent 11% of overall cost change index. The weighting of cost indices is achieved by using current [present day] costs to calculate an aggregate operating cost. The present day costs were then compared with the costs calculated for the last fares review, which used costs for October 2022 [base cost]. The base cost and present day costs were then aggregated and the difference in overall aggregate cost was used as the overall cost change index. In this way, the changes in major cost elements, such as vehicle depreciation and driver labour cost, have a greater influence than relatively minor elements such as Vehicle Excise Duty. The costs used to derive the overall change in cost index are: • Vehicle cost • Servicing • Fuel • Insurance • Vehicle Excise Duty • Licensing cost • Average National Earnings Some of the costs are influenced by the annual mileage driven. Based on feedback from the trade, the average annual mileage is estimated to be approximately 38,200 miles.
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 3 Vector Transport Consultancy www.vector-consultancy.co.uk 2.2 Vehicle Costs The most common vehicles used in 2022 were Peugeot Rifter, Renault Traffic and Mercedes Vito. The Mercedes Vito present day equivalent is generally not considered as a replacement vehicle. Peugeot produce contemporary equivalent vehicles. However, these are less popular amongst the trade. A popular vehicle as a new vehicle replacement for an existing taxi is a Volkswagen Caddy. Similar vehicles of equivalent size and similar cost, are also purchased or leased as replacement vehicles. Renault Traffic based wheelchair accessible vehicles remain a popular choice for use as larger taxi vehicles. It is estimated that around 75% of the taxi fleet are smaller wheelchair accessible vehicles and the remaining 25% are larger taxis. For the sake of calculating comparisons, a 75% small / 25% large split was assumed as a representative assumption for the fleet. In order to provide a representative basis for costs, the costs associated with Volkswagen Caddy vehicles are assumed to be representative of all replacement small taxi vehicles. Similarly, Renault Traffic taxis are assumed to be representative of large taxi vehicles, for the purpose of calculating representative costs. Whilst not all owners follow the same practice, a common approach is to purchase a vehicle, with finance. Vehicles are commonly kept for 5 years, which coincides with common 60 month financing deals. The cost of financing a vehicle over 60 months has been taken as the representative cost of ownership. The same basis was used to determine the 2022 fares calculations. This figure represents the actual annual cost of keeping a vehicle, and takes into account interest and depreciation. The cost of the two types of vehicle vary significantly. A weighted vehicle cost has been derived, which is weighted by 75% small vehicle costs and 25% large vehicle costs. Present day and base (2022) costs were derived. The present day equivalent new vehicle has been used to derive the cost for each of the two representative vehicle types. The current equivalent to a Peugeot Rifter Horizon RS (used for 2022 prices) is a Volkswagen Caddy with wheelchair access modifications. The Renault Traffic equivalent is still available for comparison purposes. The present day annual weighted cost was calculated as £10,184 The base (2022) cost was calculated for the previous cost review, as £9,868. 2.3 Servicing cost The cost of vehicle servicing, including parts and labour, varies by vehicle. The mean cost of servicing and maintenance was estimated to be £2,687 in 2022. The Office of National Statistics publish a range of inflation indices related to costs incurred by society. One of these indices relates to maintenance and repair of vehicles. The index indicates that the cost of maintenance has increased since September 2022 by 13.98% Therefore, the July 2024 maintenance cost has been assumed to have increased from the 2022 level, to £3,062.64 in 2024. 2.4 Fuel cost Fuel consumption for the two representative vehicles varies. For the calculation of a suitable value for fuel cost, we have obtained the urban fuel consumption for
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 4 Vector Transport Consultancy www.vector-consultancy.co.uk the most fuel efficient diesel version of each model. The fuel consumption rates obtained were as follows: Volkswagen Caddy, 56.5 mpg Renault Traffic, 44.8 mpg For the purposes of this calculation, we have calculated the cost of fuel for an annual mileage of 38,200 miles, for each vehicle type, for both 2022 and 2024. The average cost of diesel in September 2022 was £1.820 per litre. In July 2024 (the latest report available at the time of writing), the average cost of diesel was £1.506 per litre. Therefore, based on the fuel consumption figures above, the cost of fuel for each type of vehicle is as follows:
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 5 Vector Transport Consultancy www.vector-consultancy.co.uk Table 1 - Fuel Costs Cost 2022 Cost 2024 Mileage 38,200 Cost per litre £1.820 £1.506 Fuel Consumption (mpg) Annual fuel consumed (gallons) Annual fuel consumed (litres) Annual fuel cost Annual fuel cost VW Caddy 56.5 676.1 3,073.6 £4,628.90 Peugeot Rifter Horizon RS 57.4 665.5 3,028.0 £5,510.96 Renault Traffic 44.8 852.7 3,876.4 £7,055.05 £5,837.79 Mercedes Vito 39.2 974.5 4,430.1 £8,062.78 average 816.4 £6,876.26 £4,931.12 The average cost was derived as the average of the three vehicle types in 2022 and the two vehicle types (75% small and 25% large) in July 2024. 2.5 Insurance The cost of insurance varies by the individual and vehicle insured. The average insurance cost was estimated to be around £1,132 per annum for the previous cost review in 2022. Office of National Statistics publish a range of inflation indices related to costs incurred by society. One of these indices relates to motor vehicle insurance. The index indicates that the cost of insurance has increased since 2022 by 48.2% Therefore, the July 2024 insurance cost has been assumed to have increased from the 2022 level, to £1,677.62. 2.6 Vehicle Excise Duty cost Vehicle excise duty has two stages of charge. For the purchase of a new vehicle, there is a first year Vehicle Excise Duty charge, followed by an annual charge in subsequent years. The duty charges have been assessed over 5 years for each vehicle type and a mean cost calculated, for each assessment year. The costs for 2022 are as follows:
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 6 Vector Transport Consultancy www.vector-consultancy.co.uk Table 2 - 2022 VED Costs 2022 VED rates First year Subsequent years Average over 5 years Peugeot Rifter Horizon RS £230 £165 £178 Renault Traffic £230 £165 £178 Mercedes Vito £945 £165 £321 Average £225.67 The costs for 2022 are as follows: Table 3 - 2024 VED Costs 2024 VED rates First year Subsequent years Average over 5 years VW Caddy £680 £190 £178 Renault Traffic £680 £190 £178 Average £288 2.7 Licensing costs There are some recurring licensing costs incurred, associated with operating a taxi. The 2022 costs were calculated as follows: In October 2022, licensing charges were: A taxi operators licence was renewed every 2 years at a cost of £331, equating to £165.5 per annum A taxi driver licence was renewed every 2 years at a cost of £109, equating to £54.5 per annum. Annual taxi test fees of £75.45 were required. Therefore total licensing costs per annum in 2022 was £295.45 In July 2024, licensing charges were: A taxi operators licence was renewed every 2 years at a cost of £328, equating to £164 per annum A taxi driver licence was renewed every 2 years at a cost of £120, equating to £60 per annum. Annual taxi test fees of £83.25 were required. Therefore total licensing costs per annum in 2024 was £307.25
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 7 Vector Transport Consultancy www.vector-consultancy.co.uk 2.8 Average national earnings The Office of National Statistics collects and publishes earnings data in a variety of formats and from different sources. One of the sources is the Annual Survey of Hours and Earnings. This survey collects data annually and publishes results. The most recent available data is used for this assessment. The data for Scotland was obtained for 2021 for the previous assessment. This data is used as the base data for comparison with the latest available data. The average gross earnings for 2021 were £29,798. The equivalent average gross earnings for 2023 were £33,385. The difference in earnings between 2021 and 2023 was an increase of 12.0%. Total costs calculations The total indicative annual costs have been summarised in the following table: Table 4 - Annual Operating Costs Cost item 2022 Costs 2024 Costs Vehicle cost £9,868 £10,184 Servicing £2,687 £3,062.64 Fuel £6,876.26 £4,931.12 Insurance £1,132 £1,677.62 Vehicle Excise Duty £225.67 £288 Licensing cost £295.45 £307.25 Average National Earnings £29,798 £33,385 Total cost £50,882.38 £53,835.63 The proportionate change in overall costs between 2022 and 2024 was an increase of 5.80%.
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 8 Vector Transport Consultancy www.vector-consultancy.co.uk 3 CONSIDERATION OF OTHER INFORMATION 3.1 Retail Price Index The office of National Statistics publishes the Retail Price Index on a monthly basis. The index for September 2022 was 347.6. The equivalent index value for June 2024 (the latest data available) was 387.3. To calculate inflation between September 2022 and June 2024, we divide the later index value by the earlier index value, i.e. 387.3 / 347.6 = 1.114 Therefore, inflation between September 2022 and June 2024 was 11.4% 3.2 Consumer price index Another inflation index which has become more popular in recent years and which has generally replaced the RPI index is the Consumer Price Index (CPI). The CPI value for October 2022 was 124.3. The latest value for June 2024 was 133.0. Therefore, inflation between October 2022 and June 2024, based on CPI index values was 133.0/124.3 = 1.0699, which equates to 7.0%. 3.3 Comparison of UK average fares The publication Private Hire and Taxi Monthly maintains a league table of taxi fares around the UK. The table contains an average cost for a 2 mile taxi fare in the UK. In October 2022, the median position 2 mile fare, in PHTM table (rank 174) cost £6.60 In July 2024, the median position 2 mile fare, in PHTM table (Rank 171) cost £7.00. The difference in fares between 2022 and 2024 equates to an increase of 6.1%
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 9 Vector Transport Consultancy www.vector-consultancy.co.uk 4 CONCLUSIONS AND RECOMMENDATION 4.1 Conclusions There is evidence that operational costs have increased since the last fares increase. The cost increase was less than Retail Price Inflation. However, it is noted that the latest average earnings data relates to 2023 average earnings and are likely to underestimate the equivalent annual earnings for 2024. Consequently, the operational cost increase calculation is likely to be a conservative calculation. The operational cost increase was in line with the increase in the UK average for a 2 mile taxi fare. 4.2 Recommendation It is recommended that a fares increase be considered in line with the proportionate operation costs incurred since the last increase, based on 2022 costs. As such, fares should increase by approximately 5.80%. It is not practical to simply apply this increase to each of the elements in the Taxi Tariff in Renfrewshire. It is generally preferred that some of the elements are rounded to the nearest 5 or 10 pence. Furthermore, some elements of a taxi fare are rounded up within the meter. For example, for journeys longer that the minimum fare distance (currently half a mile), the cost increases by 30 pence for each 267 yards or part thereof, so a journey which is one yard over the half mile would cost the same as a journey which is 266 yards over the half mile. Consequently, when the tariff is changed, the increase in fares charged is not a consistent percentage for all distances travelled. Various adjustment can be made to different elements of the tariff rates to generate a resultant increase of around 5.80% in a typical fare. The fare structure includes an adjustment to Tariff 1 rates of normal fare plus 1/3 to form Tariff 2. Therefore it is prudent to take this adjustment into account when considering fare adjustments. Where possible, it is recommended that fare components are divisible by 3 to facilitate Tariff 2 adjustments and where feasible, divisible by 10 to facilitate rounding of fares. The current Tariff Card for taxi fares indicates that the minimum fare for a distance not exceeding ½ mile is £4.05. Each additional 267 yards, or part thereof is charged at £0.30. If we were to apply an increase to the minimum fare and round this off, the £4.05 increased by 5.80% would be £4.2849 This would naturally be rounded to £4.35, which is divisible by 3 and fits with the Tariff 2 multiplier. The incremental distance on which charges for journeys in excess of ½ mile are currently charged is 267 yards. A charge of £0.30 is added for each additional 267 yards or part thereof. Applying the 5.80% increase to £0.30 would result in £0.317. Even if rounded up to the nearest penny, a charge of £0.35 per 267 yards is not practical. Consequently, one would normally keep the incremental cost the same, but adjust the incremental distance in line with the proposed increase in
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 10 Vector Transport Consultancy www.vector-consultancy.co.uk cost. The incremental distance would be reduced, so that over longer distances, more increments would be covered and this in turn would lead to a proportionate increase in cost. On this basis, we would consider reducing the 267 yard current increment by 5.80%, to 252.36 yards. In practice, this would be rounded off to 252 yards, which is divisible by 3. If the increase in flag drop fare and reduction in incremental distance are applied, the resultant proportionate increase in cost will vary by distance, owing to the rounding up effects of the charging structure. The differences in distance based fare are illustrated in the following tables over a variety of distances. Figure 1 indicates that over longer distances, the increase tends towards 5.80%, with the increase varying around this proportion for shorter distances. Table 5 – Proposed tariff change Option Existing Proposed Flag drop minimum fare £4.05 £4.35 Cost per additional distance increment £0.30 £0.30 Length of additional distance increment 267 252 The distance based fares comparison for the existing and proposed tariff is illustrated as follows:
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 11 Vector Transport Consultancy www.vector-consultancy.co.uk Table 6 - Distance based costs associated with tariff options Current fare Proposed fare Resulting % increase in fare (VTC proposal) Flag drop minimum fare £4.05 £4.35 7.4% Cost 1 mile £5.25 £5.55 5.7% Cost 2 miles £7.05 £7.65 8.5% Cost 3 miles £9.15 £9.75 6.6% Cost 4 miles £11.25 £11.85 5.3% Cost 5 mile £13.05 £13.95 6.9% Cost 6 miles £15.15 £16.05 5.9% Cost 7 miles £16.95 £18.15 7.1% Cost 8 miles £19.05 £20.25 6.3% Cost 9 mile £21.15 £22.35 5.7% Cost 10 miles £22.95 £24.45 6.5% Cost 15 miles £32.85 £34.95 6.4% Cost 20 miles £42.75 £45.45 6.3% Cost 50 miles £102.15 £108.15 5.9%
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 12 Vector Transport Consultancy www.vector-consultancy.co.uk Figure 1 - Resulting percentage increase in fare with the proposed tariff Waiting time is currently 42 pence per 2 minutes or part thereof. If a 5.80% increase were applied to this charge, the cost per 2 minutes could rise to 44.436 pence. This would in practice be rounded to 45 pence per 2 minutes or part thereof. The existing tariff card includes several extra charges. It is proposed that the majority of the extra charges are increased by 5.80% and rounded to the nearest amount which is divisible by 5. Therefore , the additional charge per passenger in excess of 4, would increase from 70 pence to 75 pence. Additional charge for journeys commencing after midnight and before 5.00 am Sunday to Thursday, would increase from £1.90 to £2.00. Additional charge for journeys commencing after midnight and before 5.00 am Friday and Saturday, would increase from £2.30 to £2.45. An additional charge for journeys commencing after midnight on 24 December until midnight on 26 December and from midnight on 31 December until midnight on 2 January, would increase from £1.20 to £1.25. The Glasgow Airport terminal pick up or drop off charge is currently set at £5.00. By its nature, this charge, by being defined as a fixed amount in the tariff table, will lag behind any increases in the pick up charge at the airport, when that charge is increased by the airport operators. Changes to the pick up or drop off charge in future are unlikely to occur at the same time as future tariff tables are updated. Therefore it is proposed that the charge definition is amended in the tariff table. The proposed definition for applying the Glasgow Airport terminal pick up or drop off charge is: “Glasgow airport pick up and drop off charges - The hirer shall be liable for the cost of charges levied by Glasgow Airport for passenger pick up and drop off. Any such applicable charge will be added to the fare”
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Review of taxi tariff in Renfrewshire 2024 R1.docx, 13 Vector Transport Consultancy www.vector-consultancy.co.uk Similar additional costs are applied in the taxi tariff tables by some other authorities where external charges are incurred. For example, ferry charges, airport pick up and drop off charges and toll charges.
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APPENDIX 4 Officers’ Comments in response to Report from Vector Transport Consultancy The report from Vector Transport Consultancy (“the Consultancy”) was prepared in July 2024. They have made the observation that the current fares scale, which was decided at an appeal before the Traffic Commissioner, was based on data from October 2022 and have made their calculations, as at July 2024, on that basis. Officers have considered the calculations, with regard to the current financial and economic climate. Members may wish to consider whether the basis of annual weighted costs of keeping particular vehicles are clearly explained at Paragraph 2.2 of the Consultancy’s report. The report refers to interest and depreciation, making assumptions regarding the representative costs of ownership, but does not appear to provide a detailed breakdown of the figures. The Board may wish to note that, while some operators may choose to keep their vehicles over a period of five years, others choose to run their vehicles for longer periods (which can often be for between eight and ten years in accordance with the temporary policy agreed by the Board in relation to vehicle age, following the pandemic). Officers are of the view that vehicle costs and servicing costs are the most difficult to assess the reasonableness of because of the level of variables involved. With regard to servicing, while the increase of 14% appears high, it is recognised that in recent years component prices in all sector areas have increased significantly. With regard to fuel costs, while officers appreciate that these are only one element of the basket of costs identified by the Consultancy, Members will be aware that the cost of diesel has continued to fall significantly to date, from the reduction as observed by the Consultancy in their July 2024 report. With regard to licensing costs, it should be noted that the cost of an application for 2 year renewal of a taxi licence in October 2022 was £297, rather than the £331 stated in the report. The cost of a similar renewal application currently (£328) is correctly stated in the report. As such, the cost of renewal has increased, rather than fallen, between these dates. Members will note the Consultancy’s calculations at Table 6 on page 11 of the report. While the intention of the Association/ Consultancy’s proposal is to raise fares by 5.8% overall, Members will note, while recognising that any increase to the overall distance charge will not result in a linear increase (as an additional one yard or 266/251 yards distance will attract the same addition to the fare), that in relation to the thirteen distances set out in that table, all but three of the fares stated equate to a
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higher, or significantly higher, increase than 5.8%. It may be that the Consultancy have determined their proposal based on what they consider to be a typical journey. The Board may wish to consider these points further.