Tuesday, February 09, 2016

TfL Press Release : New Tariffs for 2016



Index Component1

Cost Increase

Weight2

Contribution to Total3

Data availability4

Last Year

Latest

Vehicle Cost

8.6%

9.1%

0.8%

N/A

Parts5

1.8%

4.2%

0.1%

November 2015

Tyres5

1.8%

0.6%

0.0%

November 2015

Garage & servicing – premises5

1.8%

0.6%

0.0%

November 2015

Garage & Servicing – labour5

1.8%

2.0%

0.0%

November 2015

Fuel6

-12.8%

10.6%

-1.4%

Sep – Nov 2015

Insurance7

11.3%

4.5%

0.5%

November 2015

Miscellaneous

0.8%

1.0%

0.0%

N/A

The Knowledge8

2.4%

5.4%

0.1%

Aug – Oct 2015

Social Costs8

2.4%

2.8%

0.1%

Aug – Oct 2015

Total Operating Costs

0.6%

40.7%

0.3%

 

Average national earnings8

2.4%

59.3%

1.4%

Aug – Oct 2015

Grand Total

3.0%

100%

1.7%

 

 

Notes

1.  The index components are as normally used in the cost formula. Further details are available on request.

2. ‘Weight’ is the proportion that the component contributes to the total cost per mile.

3. ‘Contribution to total’ indicates the importance of each component’s cost change in determining the overall cost change. It is calculated for each component as the product of its percentage cost increase and its weight. The Grand Total is the sum of the individual components’ contributions.

4. The ‘latest’ column under ‘Data availability’ indicates the dates to which data in the ‘cost increase’ column relates.

5.  As agreed in 2011, costs for Parts, Tyres and Garaging will be uplifted by the yearly change in the Office for National Statistics RPI figure for “motoring expenditure: maintenance of motor vehicles” (DOCT) published on 15 December 2015. 

6. The change in fuel costs relates to the change from the average of the AA diesel price for the 3 months to December 2014 to the 3 months to November 2015. This figure will be revised as further monthly data becomes available.

7. As agreed in 2011, costs for insurance will be uplifted by the yearly change in the Office for National Statistics RPI figure for “motoring expenditure: vehicle tax and insurance” (DOCV) published on 15 December 2015. 

8. Provisional Knowledge, Social Costs and Average National Earnings changes are based on the year on year ONS average weekly earnings growth for the three months to October 2015.

 

TfL Pricing & Forecasting

23 December 2015

 

Appendix 2 

Details of taxi cost calculations

This table shows the cost per mile of each cost component in 2014 and 2015. 

 

Component of index

Cost p per mile in 2014

Proportion of costs in 2015

Cost p per mile in 2015

Increase in costs 2015

Contribution to total increase

Vehicle Cost

21.25

9.7%

23.08

8.6%

0.8%

Parts

9.89

4.2%

10.07

1.8%

0.1%

Tyres

1.46

0.6%

1.49

1.8%

0.0%

Garage & Servicing - Premises

1.34

0.6%

1.36

1.8%

0.0%

Garage & Servicing - Labour

4.74

2.0%

4.83

1.8%

0.0%

Fuel

24.92

9.1%

21.73

-12.8%

-1.4%

Insurance

10.53

4.9%

11.72

11.3%

0.5%

Miscellaneous

2.35

1.0%

2.37

0.8%

0.0%

The Knowledge

12.64

5.4%

12.95

2.4%

0.1%

Social Costs

6.48

2.8%

6.64

2.4%

0.1%

Total operating costs

95.60

40.3%

96.24

0.7%

0.3%

Average national earnings

139.16

59.7%

142.51

2.4%

1.4%

Grand Total

234.76

100.0%

238.74

3.1%

1.7%

 

 

Note that increases are rounded to one decimal place in the table, but greater precision has been used in the calculations.

Vehicle Cost

 

Four strategies have been considered for purchasing a cab:

 

1.       Purchase new and run to scrap, 

2.       Purchase new and sell at 4 years, 

3.       Purchase at 4 years and sell at 8, 

4.       Purchase at 8 years and run to scrap. 

 

Table 2 below gives the costs for the 4 strategies (as supplied by LTC in 2015). They relate to TX4 models for all strategies. 

 

Table 3 shows the corresponding costs provided for 2014.

 




 

In October 2015 Vito taxis made up 11.6% of the fleet. Purchase costs for these taxis and the TX models have been weighted using this figure to provide an overall average purchase cost.

 

The average cost over 12 years in 2014 was £62,652 or 23.73 pence per mile. The average cost for the same strategies in 2015 was £68,257 or 25.85 pence per mile, giving an increase of 8.7 per cent.

 

Pence per mile rates have been calculated assuming an annual vehicle mileage of 22,000 miles. 

 

Parts, Tyres, Garaging & Servicing

In 2011 a study was conducted comparing the changes in costs associated with parts, tyres, garaging and servicing incorporated into the cost index over recent years with the yearly changes in the Office for National Statistics RPI figure for “motoring expenditure: maintenance of motor vehicles” (DOCT). The study concluded that the two series were comparable and it was agreed to use this ONS RPI figure to represent these cost index items in future.

 

In November 2015 the DOCT RPI series showed an annual increase of 1.8 per cent. This gives an increase in the cost per mile of these components from 17.43p in 2014 to 17.75p in 2015.

 

Fuel

The Derv price index from Arval, which has been used to calculate the change in fuel price, was discontinued in 2013. In deciding on an alternative source of fuel price data analysis of London diesel prices from the AA (available at www.theaa.com/motoring-advice/motoring-costs.html) shows close correlation with the Arval Derv price index. Based on AA data last used to calculate the index, the average fuel price over the three months to December 2014, was compared with the AA average price over the latest three months to November 2015. This gives a value of 110.6p per litre compared to 126.9p, giving a decrease of 12.8 per cent.

 

Insurance

A similar comparison to that made for parts, tyres and garaging costs was made of previous years’ cost index insurance figures versus the ONS RPI series figure for “motoring expenditure: vehicle tax and insurance” (DOCV), and again it was decided to use the RPI figure in future cost index revisions.

 

In November 2015 the DOCV RPI series showed an increase of 4.7 per cent compared to the benchmark October price level used to calculate the last index. This gives an increase in the cost per mile of these components from 10.53p in 2014 to 11.72p in 2015.

 

Miscellaneous

This comprises the cost of hiring a meter, smoke test, vehicle licence and driver licence. The average cost in 2014 was £481 or 2.35 pence per mile. The average cost for the same strategies in 2015 was £485 or 2.37 pence per mile, giving an increase of 0.9 per cent. 

 

Earnings Related

The latest average weekly earnings data (headline rate ONS series KAC3) show a 2.4% increase for the three months to November 2015, compared to the three months to November 2014 used for the 2015 index. This gives a cost per mile figure for the updated index of 142.5p, representing 59.7 per cent of the total index cost.  

 

The “knowledge” and “social” costs have also been uplifted each year in line with national earnings. In 2015 these increased to 12.95p and 6.64p respectively, together representing a further 8.1 per cent of the total index cost.

 

TfL Pricing & Forecasting

23 December 2015

 

Appendix 3

Tariff Changes – 1.6 per cent average increase[1]

 

Tariff Changes – 1.6 per cent average increase

 

Average Fares

 

 

Current average

New average

Increase (£)

Increase (%)

Tariff 1

£11.51

£11.69

£0.18

1.6%

Tariff 2

£13.34

£13.56

£0.21

1.6%

Tariff 3

£15.67

£15.92

£0.25

1.6%

All Week 

£12.72

£12.92

£0.20

1.6%

 

Tariff Rates – 1.6 per cent average increase

 

 

 

Tariff 1

Tariff 2

Tariff 3

 

 

Current

New

Current

New

Current

New

minimum fare[2]

£2.40

£2.60

£2.40

£2.60

£2.40

£2.60

minimum units

2

2

2

2

2

2

metres/unit < 6 miles

126.2

123.9

102.5

100.6

82.7

81.2

secs/unit < 6 miles

27.1

26.6

22.0

21.6

17.8

17.5

metres/unit > 6 miles

88.5

86.9

88.5

86.9

88.5

86.9

secs/unit > 6 miles

19.0

18.7

19.0

18.7

19.0

18.7

Units at lower rate

76

77

94

95

116

118

Metres at lower rate

9591.2

9540.3

9635.0

9557.0

9593.2

9581.6

changeover fare

£17.40

£17.80

£21.00

£21.40

£25.40

£26.00

 

Example Fares – 1.6 per cent average increase


  

All example fares assume entire journey charged on distance rates

Tariff times 

·        Tariff 1: Monday to Friday between 06:00 and 20:00 

·        Tariff 2: Monday to Friday between 20:00 and 22:00, Saturday and 

·        Sunday between 06:00 and 22:00  

·        Tariff 3: Every night between 22:00 and 06:00, Public holidays



[1] An increase of 1.6% has been selected as the 1.7% increase in fares calculated this year is offset by the 0.1% decrease calculated last year, which was not implemented.

[2] The minimum fare is increasing from £2.40 to £2.60