Murad Qureshi: What's fuelling London's cabs?

With the world economy held hostage by spiralling oil prices, it is little wonder that the taxi drivers' industry around the world are feeling the strain. Why then have we heard very little from the London Taxi trade despite rocketing fuel costs and the recent increase in value added (sales) tax in the United Kingdom?

There are 25,000 licensed taxi drivers (more commonly known as black cab drivers) in the Greater London area. Licenses are issued by the public carriage office, which falls under the auspices of Transport for London (TfL). It is chaired by London's mayor.

The general secretary of the Licensed Taxi Drivers Association that represents more than 8,000 licensed taxi drivers also sits on TfL's board of members. Hence, it is not surprising that licensed taxi drivers are afforded a powerful voice within London's governance.

TfL is responsible for licensing and regulating the taxi trade. It ensures that all drivers are of the required standard by subjecting them to the world famous "knowledge" examination of London's streets that can often take two to three years to complete. TfL also undertakes detailed background checks on the drivers and licenses the vehicles that can be used as taxis.

The "black cab drivers" should not be confused with the 30,000 or so private hire drivers, who too are registered with the public carriage office but are not subject to the same level of regulation or enjoy the same privileges as black cab drivers.

For example, black cabs are the only form of vehicle hire in the UK which do not require pre-booking, allowing them to be hailed on the street. All other private hire vehicles must be pre-booked, ultimately affording less autonomy to the driver. As well as enjoying a monopoly on fares in central London, black cabs can also use bus lanes, are exempt from paying the congestion charge and have dedicated parking bays.

It is perhaps these privileges that to some extent have cushioned London's black cabs against the effects of rising fuel prices. But the taxi trade is by no means immune from the effects of rising fuel prices. The higher the price of fuel the higher the running cost and the less the profit.

Crucially for the black cab trade, fares are set on an annual basis following a tariff review, which takes into account fuel prices at the time of reviewing the cost index.

In recent years, TfL has included a fuel threshold which, if reached, allows taxi drivers to add to the fare charged the passenger. This threshold hasn't yet been reached, and rising fuel prices throughout the year are a concern for the taxi trade because they have an impact on costs to the driver and will doubtlessly precipitate calls by the trade to increase the fares.

Also, although there are no fuel subsidies for taxi drivers, TfL actively works and lobbies on behalf of taxi drivers on such issues and works with various parties on initiatives such as access to cheaper, more environmentally friendly fuel for drivers.

Taxi drivers are self-employed and therefore all income a taxi driver earns will be his or her own. There are "umbrella groups" such as taxi circuits where taxi drivers pay a subscription, to receive jobs provided by a central booking and despatch system, but such arrangements are entirely voluntary (about 6,000 of London's taxi drivers are registered with one of the three taxi circuits).

Critically, black cabs are considered by the authorities to make up part of London's integral transport infrastructure in the same way as buses and rail services. And yet essentially, they are simply sole traders.

London's iconic black cabs have through the years successfully protected their craft thanks to effective lobbying and representation. For this reason, they have probably been better placed than private taxi drivers to safeguard their fares from rising fuel prices.

The author is the chair of the London Assembly Environment Committee.