THE 2022 TARIFF INCREASE: PART 1
Well, trade has been an up and down experience over the last two years. Hasn’t it? Life has been put on hold, but now we all have to get on with things again.
This applies to the tariff. Changes have been dormant during Covid and we now find ourselves three years behind on tariff adjustments. We did get an uplift in January 2020 but that was actually an increase that we should have had the previous April.
There was general agreement in the trade that it would be better to postpone the 2020 increase in the middle of the first Covid epidemic. So, we find ourselves needing an increase to compensate for 3 years of wage and cost inflation. This totals 9.95%.
What we are likely to get is the equivalent of 9.95% on Rates 1 and 2; an increase from £3.20 to
£3.80 on the flag fall and a 5.51% on the meter running rate. There will be no increase on Rates 3 and 4, other than the increased flag fall. This is a slight change, at the request of the trade tariff team, from the consultation document that suggested a £4.00 drop and 4.03% on Rates 1 and 2.
This was the option that the trade group supported, subject to the above amendments. The other two choices were no increase at all or 9.95% on all four rates. The trade would not agree to the first and the TFL Finance committee would never have agreed to the second. Thus, the compromise above.
If all goes well, the increase will be implemented on Sunday 30 April.
This won’t suit every driver. Some will agree with the trade group, some will think it too much and
others too little. However, this is where we are and it’s impossible to please everybody.
There were attempts made to make drivers aware of the consultation and encouragement to take part in the consultation and notification of the option supported by the trade group. Many did so; 744 responded in all. If you are one of the other 19,000 odd drivers that didn’t respond, please make an effort to do so next year, especially if you don’t like this result. After all, this is your wages. It’s got to be worth five minutes of your time to go on-line and answer the consultation questions?
Of those 744 that did respond, 59% opted for same middle option as the trade group. 55% opted for the full 9.95% across all rates. 24% opted for no increase at all. Yeah, I know, that adds up to a lot more than 100% so it suggests that a lot of drivers went for multiple options.
SO HOW DOES THE TARIFF BREAKDOWN?
THE FLAG FALL
It’s worth a look at how the tariff is broken down and this is especially so with regard to the flag fall (hiring charge). A lot of drivers misunderstand what TFL call the minimum fare. They believe that the minimum fare is largely irrelevant as it is what is on the clock at the end of the trip and not at the start is hr important factor. This logic is understandable but wrong.
The minimum fare or clock down or flag fall or whatever you want to call it, is broken down into two parts – hiring charge and two 20p units of time/distance. So, currently the hiring charge is £2.80 of the £3.20 minimum fare and this will rise to £3.40. This is money for nothing. You get £3.40 when the customer opens the door. The other 40p is two 20p clicks of the meter in advance.
Thus, no matter what a fare comes to, or how far it goes, the meter will show £3.40 more than if there was no flag fall.
This is especially important for rates 3 when it has been frozen as night drivers still get a small increase whereas if all the increase was on the metered fare, they would get nothing at all.
There is actually no such thing as rate 4 but rather this is just a handy name to pin on the rate above six miles. It applies equally to the other 3 rates.
Originally, this was a 50% increase on the meter back in the days when we only had a single rate. Weekend and night rates were simply a case of adding extras as a small payment for unsociable hours. It was intended as compensation for taking away the driver’s right to negotiate any fare over six miles distance, whether the fare started or finished in “The MET” or not.
This gradually diminished a little over time until 2016, when it changed from a notional six miles on stopped clock to an actual six miles distance. This represented quite a big drop for drivers.
Depending on traffic conditions, time of day, etc, the six miles would previously have been between
3.0 to 5.5 miles.
This seriously affected what was left of radio work. With a metered run-in and waiting for a customer to come out of their office, the meter could easily have been halfway towards the R4 changeover before the customer got into the cab. Not after 2015. This was a big reason why in the heyday of radio, radio work was much more lucrative than street work; drivers ran around central London on R4.
Rate 1 needs no explanation. It is the rate that has been the day rate beyond living memory, operating from 6.00am to 8.00pm.
Up to 2001, the only extra payment we received for working unsociable hours, was putting extras on the meter; 40p or 60p in 2001. Which of the two depended on the time of day and whether it was the weekend or not.
In 2001, The leaders of Unite (formerly T&G) the Union and the LTDA were called in by Mayor Livingstone and were asked what it would take to encourage drivers to work nights and weekends. The reasons for this will be dealt with in the second part of this story. The trade leaders suggested a 50% increase on the meter as an opening gambit but to their surprise Livingstone immediately agreed to it.
This rectified the under-supply of cabs at night. A 50% hike put off some customers and at the same time encouraged drivers to come out at night. However, it was found that this 50% increase was too much for the evening and weekend trade and the rate was soon split into rate 2 and rate 3. Rate 2 was set at approximately 23% above rate 1.
R2 has continued to rise with the base R1 but not so with R3 and R4. The last time rate 3 and R4 were increased was 2014. In 2015 the tariff adjustment was slightly negative so there was no increase at all.
In 2016, all the rates were increased equally. However, the hours of operation of T3 were reduced by 12.5%, making an overall reduction. The same applies to R4. While it rose with R1, the change in distance from a stopped clock to an actual 6 miles reduced its value by something between 10 – 50%, depending on traffic conditions, etc, of individual fares.
So, after the latest increase, the difference between R1 and R3 will have eroded from 50% to just 32%. However, the greatest anomaly is between R2 and R4. Because the latter has been frozen for the last 8 years, R4 will now be set at less than 1% above R2.