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Why Your Taxi Business Should Consider Going Green


The state of the environment is a much-talked-about topic across all industries and markets, including the taxi and transportation industries. Unfortunately, cars and other vehicles are one of the primary villains regarding carbon emissions. However, taxi companies provide a valuable and vital service for so many people on a daily basis, not to mention pumping money into local economies as well.

Adapting the way you run your taxi business now can have a massive impact on your success as rules, regulations, and public awareness err on the side of environmental caution.

Here, we’ll take a look at how your business can go green and the steps you can take to provide a safer environment, both financially and in terms of the world around you.

What Does Going Green Mean for You?

‘Going green’ is a bit of a buzzword at the moment, with all sorts of industries capitalising on their consumers desire to be more ‘woke’ to the issues that are affecting us and the generation coming next. This is no different for taxis. Car companies have put billions into developing both hybrid and electronic vehicles that emit less carbon into the atmosphere, helping reduce the footprint they make.

Unfortunately, due to the nature of the business, taxis are obviously on the road all day and all night. Figures from a report published by the Low Carbon Vehicle Partnership and Energy Saving Trust show that private hire taxi vehicles contribute negatively to air quality and as a result the health of the public and the drivers themselves. In central London in 2013, for example, up to 18% of nitrogen oxide emissions come from taxis. The report also states that air pollution is still the number one environmental cause of preventable illness and death in the UK – a shocking statistic.

So, what does this mean for you? You’ve likely spent years building up a taxi fleet and might be reluctant to scrap all your diesel vehicles for a costly new hybrid or electric cars.

The government’s The Road to Zero strategies is aimed at setting goals for the reduction or diesel and petrol car sales in the UK, starting with at least a 50% reduction by 2030 and an all-out ban by 2040. This, as well as the potential for new emission regulations, means that futureproofing your business today will pay off in the long-term.

How Do You Start Your Path to a Greener Business?

If you are a taxi fleet owner in London, you will already have seen that new regulations came into force on the 1st January 2018. All newly-registered taxis have to be capable of zero-emission with any CO2 emissions emitted being below 50g/km.

Deciding to either adapt your taxi business for new green measures or set up a new taxi business with an eco-friendly fleet is the first step. Once you’ve made that choice, you need to start thinking of all the environmental risks your business presents and how you can mitigate them.

You must start with the vehicles themselves. There are schemes in place to help alleviate the financial costs of going green, such as Transport for London’s £5000 grant for taxi drivers who delicense their current vehicle to buy a new hybrid or electronic one.

There are many acronyms out there pertaining eco-friendly vehicles, so let’s dive in and define them:

  • ULEV: Ultra-Low Emission Vehicle
    This is a car that produces less than 75g of carbon monoxide per kilometre and can drive for ten miles without emitting any carbon monoxide at all
  • EV: Electric Vehicle
    This refers to fully-electric cars that are powered by a battery which is charged using charge points (including all Tesla cars, the Nissan Leaf, and the Kia Soul EV, among others)
  • Hybrids
    These are cars that have smaller batteries than EVs that are charged through coasting and braking, meaning they have far shorter electric ranges
  • PHEV: Plug-In Hybrid
    These are closer to ULEVs than standard hybrids because they have larger batteries and can use electric power for longer due to being charged at chargepoints
  • FCEV: Fuel Cell Electric Vehicle
    These cars use hydrogen and oxygen to create an electric current. They don’t release any emission from the exhaust pipe because they are powered by heat and water. These are much less widely used than the other types of we’ve mentioned because charging points are scarce.

With so much to choose from, all offering very different eco-friendly elements and at varying prices, it can be hard even to know where to start when it comes to upgrading your fleet.

One of the main things you will likely consider as a business owner is the cost. Luckily, because there is so much attention being placed on this category in recent years, the government has set up a multitude of schemes and grants to help taxi business owners conform to the new regulations put in place.

Alongside the £5000 grant mentioned above, there are several other schemes to consider, including:

  • OLEV funding for taxi charging: funding for local authorities to set up a charging structure for ultra-low emission taxis
  • Plug-in taxi grant: a grant for eligible plug-in vehicles that is deducted from the retail price when taxi companies by new vehicles
  • EV Homecharge Scheme (EVHS): a grant for up to 75% of the cost of installing a chargepoint for the registered primary user of an electric vehicle
  • VED rates/Fuel duty: all taxis that are entitled to the plug-in taxi grant are exempt from vehicle excise duty if the vehicle is over £40,000. Similarly, electric and hydrogen vehicles will not have to pay fuel duty

What About Insurance for Eco-Friendly Taxis?

Insuring your eco-friendly fleet might be a bit more expensive than a petrol or diesel fleet for a number of reasons, including low emission vehicles present a slightly higher risk than other cars.

Taxis are usually more expensive, which means they will cost more to repair in the event of an accident. Most taxi insurance brokers will, however, try their best to find a competitive quote for comprehensive cover. Having said this, as these types of taxi become more prevalent on UK roads, places that can repair them will themselves become more ubiquitous, which will bring prices down considerably.

Taxi insurance brokers can also help offer some advice on how to mitigate these costs with some tips and tricks to reduce the value of your premium. You could employ telematics in your taxis, which is black box technology that tracks the way your drivers use their vehicles. The safer they drive, the less they will pay because the broker sees they present less of a risk on average.

The best option for taxi insurance is to shop around. It might be tempting to get the bare legal minimum of motor insurance, which is third party only (TPO). However, this will not adequately protect you from the costs that can accrue in the event of a claim. Look around and make comparisons where you can; this will help you in the long-term.


There are many options out there for making your taxi company greener and therefore better for the world around you. Preparation and research are key to making a relatively simple transition. With so much help available from the government and local authorities, not to mention the number of regulations quickly being put in place, you can afford to work out a greener way of running your business, without losing out on valuable revenue.