The cost of London’s Uber ban

Londoners could pay an extra £310 million in taxi fares per year

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By

Jon Ostler

Updated

Fact checked

Transport for London (TfL) announced on Friday, September 22, 2017, that Uber will be stripped of its licence at the end of the month. This means that the millions of Londoners who use the app could be left looking for other options.

And if these Uber fans switch to black cabs, it’s going to potentially cost them £309.9 million more annually in fares, since cabs are almost double the cost of UberX on average.

Uber has 21 days to appeal and see if they can get the decision overturned. But if the ruling stands, black cabs stand to increase their gross revenue by £762.3 million.

Let’s zoom in on the numbers …

With Uber losing its licence, we wanted to find out what the potential cost for consumers would be. To do this, we first had to find out how much the average person spends on UberX each year (£129.25), compared to black cabs.

From here, we looked at the difference in cost between the average fare for an UberX ride (£11.75) versus taxis (£19.80), and multiplied it by the number of people in London who have an Uber app (3.5 million). This figure turned out to be a staggering £309,925,000, which is the amount of money we’ll be spending on black cabs if Uber loses its licence.

What about black cabs?

As for how much more money black cabs could be making per year, we took the current number of Uber users (3.5 million) and multiplied it by what the average person spends on a normal taxi fare per year (£217.80). This turned out to be £762,300,000 more per year that black cabs will earn if Uber no longer operates in London.

However, these stats are just comparing UberX to London’s famous black taxi cabs. There are other, lesser-known private hire companies and alternatives to Uber out there. These operate under the same licence as Uber had, but have their own fare setting processes.

Taxi facts

  • London’s black cab drivers must pass the Knowledge of London exam, which takes three to four years to master
  • There are 23,241 Toyota Prius private hire vehicles driving around London, but only 25 Teslas
  • A black cab must have enough room to accommodate a man wearing a bowler hat
  • June 29, 2012 marked the first ever Uber trip in London, from St Paul’s to a restaurant in Chelsea

Methodology

    1. The average Uber fare:
      • The number of Uber drivers (40,000) and Londoners with the app (3.5 million) was sourced from Uber
      • The average trip length by taxi (5.0 miles), the average duration (20 minutes), and the average number of taxi trips per person per year (11), was sourced from GOV.UK (2016)
      • Using these figures, we calculated the average UberX fare, based on an estimated fee per mile, per minute, and the base fare, sourced from UberEstimate

The average amount spent on Uber per person per year (£129.25) was calculated by multiplying the average Uber fare (£11.75) by the average annual number of taxi trips per person (11).

The average black cab fare:

      • The average black cab fare was sourced from Transport for London data, using Tariff 3 as it’s Uber peak usage period.
      • The average amount spent on black cab fare per person per year was worked out from this (£217.8)

How much the switch to black cabs would cost all consumers in London:

      • The average amount spent on taxis was minused from the amount spent on Uber to get the increased amount
      • This was then multiplied by 3.5 million, the number of people in London who use the app

The increase in gross revenue for black cabs was found by multiplying the number of Uber users in London (3.5 million) by the average amount spent on black cab fares per person per year (£217.8).

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