In March 2018, the Mayor of London set out the transport challenges for London as including congestion and air pollution, alongside road safety and a lack of physical activity among Londoners.

To support the objectives of reducing congestion and improving air quality, Transport for London is consulting on two changes to transport policy in London. The first is to remove the exemption from the Congestion Charge that is currently applied to private hire vehicles (PHVs), but retain this exemption for licensed taxis. The second is to replace the Ultra Low Emission Discount with a new, phased Cleaner Vehicle Discount.

Addison Lee commissioned Oxera to provide an independent economic review of the analysis conducted on behalf of Transport for London by CEPA and Mott MacDonald; and to assess a package of policy options developed by Addison Lee as an alternative to Transport for London’s proposals.

Oxera’s assessment finds that Transport for London’s proposed changes to policy are unlikely to meet the objectives of reducing congestion and improving air quality in London. The policy changes could also have unintended consequences for equality and competition.

What’s the alternative?

Alternative policy solutions could better meet the challenges of reducing congestion and pollution in London. The alternative proposals put forward by Addison Lee tackle congestion over a broader scope than applying the charge only to PHVs, and work towards addressing the most polluting vehicles.

Addison Lee is proposing the following:

• phase out non-Euro 6 (diesel) and non-Euro 4 (hybrid petrol) PHVs. This would directly improve vehicle emissions for trips within the Congestion Charging Zone (CCZ);
• establish a rapid electric charger network in London and make the existing ‘licensed taxi’-only electric chargers accessible to PHVs. This would support the adoption of electric vehicle technology across the wider PHV industry;
• raise standards across the PHV industry. This would address more general concerns about driver quality and, by extension, reduce the number of licences; and
• adjust taxi licensing such that all vehicles have to be under 10 years old. This would eliminate older, more polluting, vehicles and increase safety.

Lastly, although not part of its core proposal, Addison Lee is proposing an increase in the current Congestion Charge or an extension to the CCZ, which would raise millions to pay for a rapid electric charging network.

These proposals put forward by Addison Lee are largely within Transport for London’s existing suite of interventions and entail fewer unintended consequences. The proposals focus on setting a well-targeted regulatory environment and delivering the infrastructure to enable the industry to adopt lower-emission fleets.