Addison Lee tells London mayor Sadiq Khan congestion charge for private hire vehicles but not black cabs is "anti-competitive"

Rebecca Smith
The company said a charge would hit drivers' earnings
The company said a charge would hit drivers' earnings (Source: Addison Lee)

The boss of Addison Lee has written to Sadiq Khan in a call to maintain the congestion charge exemption for private hire vehicles, saying removing it will damage drivers and competition.

Transport for London (TfL) has been mulling ditching private hire vehicles' exemption from the congestion charge, and last week set out new ideas for ways to improve regulation for the industry including forcing firms to share their data.

Addison Lee said hitting private hire vehicles with the congestion charge would represent a cost to the industry of as much as £250 per driver per month. The company was also critical of a situation where the exemption is removed for private hire vehicles but not black cabs, saying that would be "anti-competitive".

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Andy Boland, the firm's chief executive, said:

Private hire vehicles play a vital role in helping to move millions of people safely around the capital each day - they are particularly important to certain groups such as vulnerable adults, as TfL noted in its policy statement on private hire only this month – and I can therefore see no possible reason why private hire vehicles should be treated any differently from taxis with respect to the congestion charge.

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Boland said levying the charge on private hire vehicles was "a blunt instrument" that would knock investment, distort competition and hurt drivers "to the detriment of passengers and the travelling public".

The firm said levying the charge on private hire vehicles works against TfL's own policy goals and will do nothing for the environment.

“Given the competitive nature of the market, fares would be unlikely to rise to reflect any imposition of the congestion charge. There would therefore be no change in demand, and no improvement to the environment,” Boland said.

To improve London’s air quality, it would be far more effective to focus on the laudable ultra-low emission zone and on installing more charging points for electric vehicles.

Addison Lee said the industry was highly competitive, and innovative with businesses investing in cleaner vehicles. However, the company said it operates against "a backdrop of a marketplace in which some participants have pursued a policy of growing market share by offering fares substantially below cost".

It said those which have subsidised fares will most likely absorb the costs to hoover up greater market share and keep fares "artificially low", and to stay competitive in such a scenario, the likes of Addison Lee will have to pass the cost onto drivers. That will then hit their drivers' earnings.

A mayoral spokesperson said:

The mayor and TfL are keeping user charging schemes, including the congestion charge under review to ensure they are as effective as they can be.

As part of this TfL are currently undertaking further analysis on the impact of removing the exemption from the congestion charge for private hire vehicles.

London Assembly Liberal Democrat member Caroline Pidgeon said: “The growth in private hire vehicles has contributed to the growth in congestion in many parts of London and a range of policies are needed to address that.

“One area where immediate action must be taken is much firmer action against private hire vehicles which misuse their congestion charge exemption.”

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