DfT Best Practice Guidance on taxi maximum fares, when to negotiate fares and competition in the digital world

The Department for Transport (DfT) provides guidance on taxi fare competition, shedding light on the best practices for negotiating fares and the role of intermediaries.

According to the DfT's Best Practice Taxi and Private Hire Guidance, taxi fare tariffs are set as a maximum limit. Passengers and drivers are permitted to negotiate fares downwards, but this should be avoided at taxi ranks or for on-street hailing due to potential confusion and security issues.

Licensing authorities are urged to clarify that published fare rates represent the maximum charge. With the increasing use of telephone and electronic bookings, passengers can take advantage of price comparisons and competition among taxi intermediaries. It is considered acceptable for these intermediaries to promote discounted fares, such as offering a "5% discount from fares".

This guidance offers transparency and fairness in taxi fare negotiations, benefiting both passengers and drivers. By clearly communicating that fare rates are a maximum, authorities can help prevent misunderstandings and disputes over pricing.

The DfT highlights the importance of passengers being aware of their rights to negotiate fares, but also recognises the need to maintain order and safety in certain scenarios. Constantly negotiating fares at taxi ranks or through on-street hailing can lead to potential security risks and frustration from both parties, making it imperative for these practices to be limited to pre-arranged bookings.

In today's digital age, the landscape of taxi bookings has, and continues to, evolve significantly. The rise of mobile apps and online platforms has transformed how passengers hire taxis, making it easier to compare prices and choose the best deal. The DfT's guidance is set to support this shift, encouraging competition among taxi intermediaries to offer more attractive rates to passengers on pre-booked journeys.

For taxi intermediaries, the ability to advertise discounted fares can also provide a competitive edge for longer journeys or when covering ‘dead mileage’ at the start or end of shifts. This practice not only attracts more customers but also promotes a more dynamic market where passengers can benefit from lower costs.