London Cabbies Crushed: New Law & Fee Hikes Strike

The landscape for London’s iconic black cab trade has shifted dramatically today, January 8, 2026, as the Department for Transport (DfT) unveiled sweeping proposals to overhaul the nation’s taxi licensing system. While Transport Minister Lilian Greenwood frames the reforms as a vital step for passenger safety and fair competition, the announcement lands at a precarious moment for London’s drivers, who are already grappling with a "triple threat" of rising operational costs, including a newly hiked Congestion Charge and predatory airport pricing.

Radical Overhaul to End Licensing Loopholes

The cornerstone of the government’s "Plan for Change" is the consolidation of the licensing landscape. Currently, 263 separate bodies across England and Wales issue licences, a fragmented system that has long allowed for "licensing shopping." Under the new proposals, this authority would be slashed to just 70 Local Transport Authorities (LTAs). For London, this means a more unified approach to enforcement, aimed directly at curbing "out-of-area" working. This practice, where drivers obtain licences in jurisdictions with lower standards only to operate in lucrative hubs like Central London, has been a long-standing grievance for black cab drivers who must pass the rigorous "Knowledge of London" and adhere to strict TfL regulations.

Financial Pressure Points in the Capital

The licensing reform arrives just days after a series of financial blows hit the trade on January 2, 2026. Transport for London (TfL) has officially increased the daily Congestion Charge from £15 to £18, marking the first major hike since 2020. Furthermore, the 100% discount for electric vehicles has been scrapped, replaced by a tiered system that now requires even Zero-Emission Capable (ZEC) drivers to pay a daily fee. When combined with the "airport parking trap"—where drop-off fees at major terminals like Heathrow have reached £6 and rank entry fees have climbed to £3—the daily cost of simply being on the road is eroding the take-home pay of veteran drivers.

Impact on Driver Earnings and Trade Survival

Industry analysts warn that the cumulative impact of these costs could stifle the modest recovery the trade saw in late 2025. While the DfT proposals aim to reduce "unfair competition" from out-of-area private hire vehicles, the immediate reality for many drivers is a narrowing profit margin. With the Plug-in Taxi Grant (PiTG) officially ending in April 2026, the subsidy for purchasing a new electric black cab will drop from its historical peak of £17,500 to zero. This occurs at a time when the upfront cost of a new LEVC taxi has risen by nearly 40% over the last decade, leaving many drivers wondering if the trade is still a viable long-term career.

Safety First but at a Regulatory Cost

Minister Lilian Greenwood emphasized that these changes are a response to Baroness Casey’s National Audit on Group-Based Child Sexual Exploitation, ensuring that all drivers undergo the same robust vetting regardless of where they are licensed. The Licensed Private Hire Car Association (LPHCA) has welcomed the consistency, yet for London’s black cab community, the "safety" of their livelihoods remains the primary concern. The 12-week consultation period launched today will be a critical window for unions to argue that while national standards are welcome, they must be paired with financial protections for the drivers who keep the capital moving.