If approved, the increase would come into effect next April and would be on top of a 5.5 per cent hike earlier this year.
The increase is designed to give cabbies, who are self-employed but have their fares regulated by TfL, an annual increase and to reflect the rising cost of fuel, with diesel and electric charging both more expensive.
But it comes as taxi drivers are said to be enjoying a “surge” in demand, with more passengers at times than before the pandemic. The proposed changes do not apply to minicab firms or app-based operators such as Uber, which can set their own fares.
TfL is due to launch a consultation at the end of the month on four options, including two that would lead to an 11.6 per cent increase in fares. A third would lead to an increase of about four per cent or seven per cent and a fourth would result in a fares freeze.
A report to TfL’s finance committee, which sets out the options, warns a 11.6 per cent hike would be “a significant increase for passengers”.
It could increase the minimum fare to £4.20. TfL uses a “cost index” to peg fares to the cost of running a cab.
The TfL report said: “When considering changes to taxi fares and tariffs it is important that we strike an appropriate balance between drivers being fairly paid and taxi users getting fair and affordable fares. It is clear that operating costs have increased significantly for drivers this year and the cost-of-living crisis will be impacting a number of taxi users and taxi drivers.”
The 5.5 per cent increase, in April this year, took the minimum fare from £3.20 to £3.80 and meant the meter “ticked over” more quickly for the rest of the journey. It was introduced amid concern that about 3,000 taxi drivers had quit during the pandemic.
Driver numbers have continued to fall, to 18,898, but demand from passengers has increased as more people return to central London and as the cost of minicabs and Uber trips has risen. Concerns that taxi drivers would lose passengers, especially at Heathrow, as a result of the Elizabeth Line opening have proved unfounded. Instead, the chaos seen at the airport this summer is said to have increased demand.
Steve McNamara, general secretary of the Licensed Taxi Drivers Association, said: “Every year, TfL reviews our fares to see whether an increase is indicated to keep them in line with average wage increases and taxi operating costs… We will be responding to the consultation on behalf of our members when it is launched.”