IoL - ALL THINGS LICENSING
fares to be calculated at a rate which will allow drivers to cover costs and earn the Guildford average salary over time (based on the average vehicle mileage).
This procedure sets out the process used for calculating taxi fares and other charges, which includes a methodology (a process that sets out relevant cost factors); calculator (an excel spread-
experience may assist other licensing authorities in their own work on fare setting in light of the DfT Best Practice Guidance.
In 2011 Guildford’s Licensing Committee instructed officers to establish an objective formula / methodology for fare setting. This followed years of fare setting following discus- sion with trade representatives, with no structured support / methodology behind it.
The starting point was the London Cost Index, followed by nearly two years of discussion with the trade and external auditors to develop a formula which was approved by the Council’s Executive in 2013. The methodology was subsequently used to calculate fares in 2013 and again in 2015. In 2015 however, the formula indicated that fares should reduce due to falls in motoring costs. At the same time, Guildford was consulting on potential changes to its licensing policy, which would result in additional costs relating to taxi livery and driver training. As a result, the decision was taken not to alter fares at that time.
Once the new policy was adopted, a further review of taxi fares was instigated in consultation with the trade on the data used to calculate fares. The review of the costs of running a taxi in Guildford was considered by the Executive in 2016, culminating in the production of a new (reduced) table of fares which was consulted upon, approved, and subsequently challenged.
The legal challenge was reported on elsewhere at the time. It essentially failed as the Judge found that the council had set a robust methodology for calculating fares, had gone to great lengths to consult with the trade about the data and running costs to be inputted into the formula, and despite sending over 260 consultations, received less than a handful of partially completed replies.
THE GUILDFORD FARE CALCULATOR
The Guildford Fare Calculator was approved by the council’s Executive in 2013 and subsequently reviewed in 2016. It takes into account the costs of running a licensed vehicle together with average salaries in Guildford, and enables
APRIL 2022
sheet containing the formula for calculating the fares), and table of fares (setting out the maximum permitted charges for each journey).
The procedure also sets out the factors used when calculat- ing the costs associated with operating a taxi in Guildford. The values of these may change each year and are reviewed accordingly as set out in Guildford’s fare setting procedure, or sooner if deemed appropriate.
CONCLUSION
Guildford’s formula for fare setting has stood the tests of legal challenge and provides the means of setting and reviewing fares in a structured, transparent and methodical way. The formula will work equally well for other areas and a more consistent approach would benefit all parties. My article in the IoL’s LINK magazine sets out the detailed explanation of a methodology which is easily computed in its spreadsheet format.
Guildford’s spreadsheet could easily provide a
universal formula with inputted values being adjusted for local circumstances and information to calculate fares.
The process is described in detail in the Institute of Licensing LINK Magazine, Edition 8 at:
https://www.instituteoflicensing.org/resources/link-magazine/
I also often attend IoL training sessions to talk about the method.
Essentially the calculator allows the costs of running a taxi to be recovered, along with the average salary for Guildford to be earned over the average mileage and number of journeys undertaken.
The setting of fares at a time of great uncertainty is just another example of events in the world of licensing which are likely to affect the licensed trade I emphasise the importance about being ‘in the know’ about licensing issues and what your local authority should (or shouldn’t) be doing, with the reasons behind it. I would encourage members of the trade to join the Institute of Licensing to keep on top of the latest goings on.
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