London’s taxi Cost Index is pointing to a possible 7.07% fare rise from April 2027, according to early figures reported ahead of Transport for London’s annual tariff consultation.
trade reporting said the projected total combines a 5.03% increase in drivers’ operating costs with a 2.05% rise in average national earnings. The operating-cost basket covers items such as fuel, insurance and vehicles. The figure is an early indication only. Any change still has to go through consultation later this year, and TfL has not yet set a 2027 tariff.
How TfL uses the Cost Index
TfL reviews London black-cab fares each year using its Cost Index. That tracks changes in taxi drivers’ operating costs and in average national earnings, then produces a total Cost Index figure used when options for the minimum fare and Tariffs 1 to 3 are considered.
A full Cost Index rise is not automatic. Recent reviews have tested freezing fares, applying only the operating-cost element, spreading an increase across the minimum fare and the tariffs, or using the full total. The latest change, approved by TfL’s Finance Committee on 25 February 2026, took effect on 25 April 2026: the minimum fare rose from £4.20 to £4.40 and Tariffs 1, 2 and 3 rose by 2.88%.
LTDA reaction
Licensed Taxi Drivers’ Association senior representative Sam Houston told members the Cost Index had come out at “around 7%”, well above overall UK inflation of around 3%. Writing in TAXI magazine, he said vehicle and insurance costs were the main reasons for the gap: prices for what drivers need to do the job had risen faster than prices overall.
Houston said purpose-built London taxis are 100% wheelchair accessible and that remains a unique selling point, alongside reputation and the trade’s long role on the city’s roads. He also noted that the tariff is “actually a price” and forms part of a passenger’s choice between transport options.
The effect of any rise on the trade, including drivers’ hourly earnings, is hard to quantify, he said. He warned that if the trade does not take the full Cost Index increase, “last year’s inflation will never be reflected in the tariff”.
What happens next
TfL is expected to consult later in 2026. Any approved change would normally apply from April 2027. Until then, the April 2026 fares remain in force.