How is the new ULEZ scheme affecting businesses in London and will soon to be affecting all London Boroughs?
The Ultra-Low Emission Zone (ULEZ) is a scheme, implemented by the Mayor of London, to tackle the city’s air pollution crisis. Launched in 2019 by Boris Johnson, the then Mayor of London, the aim of the ULEZ is to improve air quality by discouraging the use of high-polluting vehicles in the city. If we fast forward a few years, with the aftermath of the pandemic, the cost-of-living crisis as well as supply chain shortages, small business are now feeling the squeeze and the knock-on effect of this scheme. Now the Mayor of London Sadiq Khan is extending the ULEZ to all London Boroughs by the 29thAugust 2023. How can any hospitality businesses adapt to the new sustainable initiative?
What is the ULEZ scheme?
Under the ULEZ scheme, drivers of older, more polluting vehicles are required to pay a daily charge of £12.50 to drive within the designated zone. It applies 24 hours a day, 7 days a week, except for Christmas Day. Anyone who drives a car that does not meet the minimum emissions standards will be charged – but there are exemptions.
For petrol cars, those first registered before 2006 are likely not to meet standards and drivers will have to pay. Most diesel cars registered after September 2015 are exempt from the charge. This is Phase 1 of 5. By 2025 the whole of the UK will have a charge to pay if they have a vehicle to move around.
The current financial climate and ULEZ. Is now the right time to act?
The scheme has already had a significant impact on small businesses in the hospitality industry and many others who rely on vans and trucks to transport goods in and out of the city. Many have raised the issue as to whether now is the right time to expand ULEZ out into all London Boroughs, with dying High Streets, inflation at an all time high and most families struggling to make ends meet.
Many small businesses in London and outer London Boroughs do not have the financial resources to upgrade their vehicles to meet the new emissions standards, which means they are facing extra charges that can quickly add up. This levy has created an additional financial burden for small businesses already struggling to survive in a competitive market and the current economic climate. It will also have an impact on recruitment and retention too, for all companies within the ULEZ Zones.
More bad news for the supply chain?
Many industries are facing logistical challenges in getting products in and out of the city and this will now also impact the same businesses delivering within the new ULEZ Zones. The ULEZ charge applies to any vehicle entering the designated zones. This means that small businesses must factor in the extra cost when making deliveries and pass those costs onto their clients. This will lead to a decrease in the number of deliveries made, as businesses try to minimize the impact.
For businesses relying on just-in-time delivery, this can have a significant impact on their ability to meet customer demand or to receive fresh produce.
The impact on human resources is huge
This extra cost can be a burden for some workers, especially those on lower incomes, and may cause them to consider leaving their job and seeking employment elsewhere. This will lead to a reduction in staff, staff retention and recruitment difficulties for employers in affected areas, which will ultimately impact the productivity and profitability of businesses in the region.
People wishing to socialise with family and friends will also no longer choose to go into ULEZ Zones as they will be adding £12.50 to their ‘evening out’ before they even turn on their engine. This is great news for the areas outside these ULEZ Zones, but it will be only a matter of time before these areas will be included, when pay by mile is introduced!
Older vehicles; a thing of the past
The ULEZ scheme has also led to a decrease in the value of older vehicles. Small businesses who own older vehicles are facing reduced resale values, as these vehicles are now less desirable in the London market. This has created issues for those already struggling to keep their vehicles on the road.
Frontline workers are those worse hit.
The scheme is having a disproportionate impact on frontline workers and people on shift work too, who will often have to pay twice to enter the zone. These workers typically earn lower wages and may have fewer transport options available to them, ie, shift worker who needs to start work at 6am and needs to leave home at 5am, using their car every day, because their transport system does not run that early. This makes the additional cost of the ULEZ even more burdensome. In most cases workers will be paying an extra £62.50 minimum per week just to travel to work.
Many frontline workers, such as healthcare professionals, emergency service workers, and delivery drivers, rely on their vehicles to get to work and may not have access to alternative modes of transport. This means that they are often forced to pay the ULEZ charge to keep their jobs, which can have a significant impact on their disposable income.
Additionally, those who work night shifts or have irregular working hours may have to pay the ULEZ charge twice in a single day if their shift spans midnight, further exacerbating the financial burden.
Are there exemptions to the ULEZ charge?
There are some exemptions to the ULEZ charge, including vehicles used by disabled people and some specialist vehicles. However, these exemptions do not apply to most small businesses or people in London, which means that they are still facing extra charges as a result.
What other initiatives could have been better?
It’s a difficult conundrum, as each business and individual will have a different situation and requirements. Many argue that more exemptions should have been implemented, to avoid the added economic stress on everyone.
Further economic help is also being demanded from the government, to be able to help business adapt to this new scheme.
To sum up, the aim of these initiatives is to improve air quality in London and protect the health of people living and working in the city. However, the question must be raised as to whether it’s the correct moment to implement them, just as people, businesses and our High Streets are struggling the most……….TFL & Mr Khan need to think this one through and quickly.