Uber faces a 1,000-fold increase in fees to operate in London amid concerns over a boom in the number of minicabs on the capital’s streets.

The biggest minicab operators will be charged up to £2.9 million over five years, compared with £2,826 at present, as part of a new Transport for London (TfL) system aimed at regulating taxi and minicab companies based on the size of their operations.

It comes days before TfL is to make a ruling on Uber’s future in London amid pressure from MPs to strip the US-based company of its operating licence in the capital.

Transport bosses have been alarmed by the increase in the number of minicabs of the capital’s streets, and the resulting increase in traffic.

According to TfL figures, the number of private-hire-vehicle drivers has almost doubled from 65,000 four years ago to more than 116,000 this year, and the rise has triggered a surge in paperwork, with officials facing a mounting workload to vet drivers, ensure operators fulfil licence obligations and tackle illegal operations.

TfL said that the cost of running taxi and minicab businesses in the capital would reach £209 million over the next five years and today confirmed that the fees operators pay would be overhauled to reflect the size of minicab fleet from April 1 next year.

At present cab operators are required to pay a flat rate of £2,826 for a five-year licence irrespective of the number of vehicles. A tiny company with no more than two drivers pays £1,488.

Under the new fee structure, the two tiers will be replaced by eight and will range from £2,000 for operators with no more than ten vehicles over five years to £700,000 for those with between 1,001 and 10,000 vehicles.

Operators with more than 10,001 vehicles will be required to pay £2.9 million over five years. This includes a £580,000 application fee and £2.32 million for the licence.

Uber, which has reported having 40,000 drivers in the capital, could be hit by the highest fee.
The move will be seen as a radical step by the mayor of London, Sadiq Khan, who has come under pressure to impose tougher regulations on e-hailing apps.

Uber, which has 3.5 million users in London, is likely to learn this week or next week if it has been granted a new licence by TfL. It handed the company a temporary four-month licence in May, which expires this month.

If it gives Uber a new five-year licence, the company will probably pay the lower fee over the next five years. However, licensing bosses could choose to issue another temporary licence until the new fee structure is imposed.

Addison Lee, one of the biggest operators in the capital, was handed a six-month licence at the end of August and will pay £700,000 under the new regime from next year.

Ten Labour, Lib Dem and Tory MPs wrote to TfL earlier this month urging it to strip Uber of its licence, branding the company an “unfit and improper operator” over its failure to report sex attacks by a driver.

Uber has repeatedly rejected the claims.

Earlier this month, a spokesman said: “More than 40,000 drivers rely on our app to make a living, with average fares last year of £15 an hour after our service fee. Drivers who use Uber are licensed by Transport for London and have been through the same enhanced background checks as black cab drivers.

“Our technology goes further to enhance safety with every trip tracked and recorded by GPS and we employ former Met Police officers who work closely with the police.”

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