|Client||Transport for London (TfL)|
|Service(s)||Policy & Economics|
CEPA was commissioned by Transport for London (TfL) to undertake a study of the potential impact of the Ultra-Low Emission Zone (ULEZ) – and associated policy proposals – on the London taxi market. In particular, we supported TfL in designing a voluntary taxi decommissioning scheme in preparation for public consultation. We also considered the implications of a reduced taxi age limit and a compensation scheme for taxi drivers.
The project involved considerable stakeholder engagement to understand the market context, to test initial assumptions and proposals, and to take into account the views of key market participants. This included discussions with taxi unions, fleet operators, taxi drivers, vehicle manufacturers and finance companies. We worked closely with TfL during the project to ensure that their requirements were met and to respond to ongoing policy developments. We also held discussions with policy makers such as the Office for Low Emission Vehicles (OLEV) and the Department for Business, Innovation & Skills (BIS), to understand how the proposed taxi decommissioning scheme might interact with wider policy initiatives, considering the financial and legal implications.
Designing the decommissioning scheme involved:
- Aligning the scheme with TfL’s objectives, particularly with regard to reducing emissions.
- Determining an appropriate methodology for reimbursing taxi owners, which included considering the current / likely future market for second-hand vehicles.
- Considering the design/impact of similar schemes across a range of European countries.
- Developing ‘mini business case’ models for the different groups of taxi owners to consider how they would be impacted financially by the scheme under various scenarios / sensitivities.
- Combining the modelling results with economic theories in order to consider the incentives faced by taxi owners and estimate uptake of the decommissioning scheme.
- Considering the impacts on the taxi market overall, both for different types of vehicles (new and second-hand) and different groups of taxi owners.