Uber raises fares in London to subsidise electric vehicles

Rise of 15p a mile from 2019 will help drivers buy electric cars but union not happy

Uber’s fare increase add 45p to the average London trip.

Uber’s fare increase add 45p to the average London trip.

 

Uber will raise fares in London by 15p a mile in early 2019 to subsidise electric vehicle purchases by its drivers.

The San Francisco-based ride-hailing company laid out the details of a clean air fee that it estimates will raise £200 million (€226 million )over the next few years. The initiative, first announced last year, is a response to the UK government’s plan to eventually ban diesel and petrol vehicles. Uber expects its London fleet to be fully electric by 2025.

The move “is an endorsement of us standing behind [Transport for London] and the mayor’s vision for London and improving air quality in London,” said Jamie Heywood, Uber’s regional general manager for northern and eastern Europe.

The fee, which will add 45p to the average London trip, will be held in an account for drivers. The company estimates that a driver working 40 hours a week could accrue about £3,000 towards an electric car in two years and £4,500 in three years. Uber hopes 20,000 of its London drivers – half the total in the city – will switch to electric vehicles by 2021.

However, a union group that has organised Uber drivers warned the move would hurt, not help, drivers.

“We are very concerned that this latest PR move from Uber will lure drivers deeper into debt, as they struggle to finance expensive vehicles on below minimum wage income,” said James Farrar, chair of the United Private Hire Drivers branch of the Independent Workers Union of Great Britain.

The union has called for London to cap the number of minicabs in the capital. Earlier this year, New York put a temporary cap on private hire vehicle licenses, a step that Uber opposes.

The boom in private hire vehicles, fuelled by the rise of companies like Uber, has been blamed for worsening congestion and pollution in cities around the world.

Fighting pollution is a key priority for London mayor Sadiq Khan. He has created a new ultra-low emission zone in central London, which charges older vehicles that do not meet tighter exhaust emission standards, and has pledged to spend £800 million on air quality initiatives over the next five years. The City of London plans to turn parts of the Square Mile into a zero-emissions zone by 2022.

While the total number of vehicles entering central London has fallen by about 30 per cent since the city introduced a congestion zone, the number of private hire vehicles entering central London – where they are exempt from the charge – has more than quadrupled over the same period.

Copyright The Financial Times Limited 2018