[vc_row][vc_column][vc_column_text]Summary
This paper sets out the licensing arrangements for taxis and private hire vehicles (PHVs),
drivers and operators in England and the enforcement of those licences. It also looks at
some of the most significant reports into the future of the taxi and PHV industries in
recent years and issues currently of concern to the industry and licensing authorities such
as capping licence numbers, cross-border working, accessibility and disruptive technology.
Taxi and PHV licensing law in England dates back in some instances to the 19th century –
though the origins of the taxi trade go much further back to the 17th century. There was
some update to the licensing law in the 1970s and more recently in London in the 1990s,
but since then there has been no national legislative change, despite significant
developments in technology, travel behaviour and customer demands.
This has led to an increasing number of calls in recent years for wholesale reform of the
licensing law. This was really kick-started in 2012-14 by the Law Commission, which
published a comprehensive overview of the industry and how it should look going
forward. It also published a draft bill for consideration by the Government. Although the
Coalition Government accepted a small number of the Commission’s recommendations
and legislated for them in 2015, nothing further has been done.
The entry of Uber into the London PHV market and the way it has transformed it, has
given impetus to the calls for reform. There are some who believe that the advent of Uber
and other smartphone app-based technologies is a chance to completely rethink what the
industry should look like going forward as a consumer-led, deregulated system where the
differences between taxis and PHVs disappear. Others, while welcoming some of the
benefits from these app-led providers in terms of consumer choice, caution against
unleashing a ‘free for all’ and are calling for better regulation, standardisation across the
country and more powers for local licensing authorities to cap PHV numbers and prevent
cross-border hiring.
Reports by the All Party Parliamentary Group on taxis, the Urban Transport Group, the
Institute for Economic Affairs and others followed the work of the Law Commission and
led to differing conclusions and recommendations for the future. In July 2017 in response
to these reports and the changing industry particularly in and around London, the
Government set up a working group to consider regulatory issues and remedies for the
industry. This ‘Task and Finish Group’ reported in September 2018, recommending
national licensing standards, limits on cross-border working, powers to cap licenses under
certain circumstances and higher safeguarding standards. These reports and their
recommendations are discussed in the substance of this paper.
Please note that this paper does not look at the wider implications of the ‘gig economy’
and the employment rights and other issues which have been raised with regards to appbased operators like Uber. For an overview of some of these issues, see the Library’s
1. What is a ‘taxi’?
The term ‘taxi’ is in common usage across the country, but there can be
differences in how that term is used.
For example, in London the term ‘taxi’ is synonymous with the city’s
black cabs (licensed as ‘hackney carriages’) and the term ‘minicab’ tends
to be used to refer to private hire vehicles (essentially anything that is
not a black cab). Outside of London the term ‘taxi’ is often used to refer
to both hackney carriages and PHVs, although they are licensed
differently.
The term ‘taxi’ is relatively modern. It was first used in legislation in the
Transport Act 1980, where section 64(3) defines a taxi in the same
terms as a ‘hackney carriage’.1 Most of the legislation and case law still
refers to taxis as ‘hackney carriages’.
The Law Commission looked at the definition of ‘taxi’ in its May 2014
report. It concluded that the term ‘hackney carriage’ should be replaced
in legislation with the word ‘taxi’, while the term ‘private hire vehicle’
should remain unchanged:
We … recommend that the statutory language be changed to
“taxi” for hackney carriages. The use of “hackney carriage” is an
historic anomaly. “Private hire”, on the other hand, is a modern
term which, although it may not receive much public usage,
accurately describes the service it relates to.
We recognise that there is a significant depth of feeling in relation
to the use of the term “taxi”, in any form, by private hire firms.
Given the growth of online marketing it seems than only an
outright prohibition on these terms would be effective. We
acknowledge that the term “private hire” is not well-known
amongst the general public, and the term “minicab” is only used
to any great extent in London.
Yet if private hire vehicles are to be
prohibited from using signage including the word “taxi” it
appears inevitable that this restriction should also apply to
advertising. It could be argued that allowing private hire firms to
advertise as taxis might encourage the public to try to hail private
hire vehicles. On the other hand, private hire vehicles should
continue to be allowed to advertise as “cabs”.2
Thus, for the purposes of this paper, and in line with the Law
Commission’s recommendation, the term ‘taxi’ is used to refer to what
are currently defined in legislation as ‘hackney carriages’.
2. History
The regulation of the taxi industry could be said to have begun in the
seventeenth century, under King Charles I, who was concerned about
congestion in the City of London. He issued a proclamation restricting
the number of hackney coaches to 50 and preventing them from
carrying passengers less than three miles:
King Charles I initially forbade that “any hired coach be used or
suffered in London” in 1635 […] Londoners ignored the King and
continued hiring any coach they could, often from “innkeepers,
brokers and other tradesmen, intruders into the profession of
coachmen”—according to the career coachmen who started
lobbying for explicit and exclusive rights to “ply for hire” in the
streets.
Their petitions offered contributions for the Exchequer,
streets fit for the Queen, a small army if His Majesty pleased, etc.
Charles soon saw their point. In 1637 he proclaimed that just a
few hired coaches were so “very requisite for our Nobility” that
“there should be a small competent number allowed for such
uses.” He followed up shortly with Royal preferences on horse
specs and buggy make. After the Interregnum, Charles II issued
more licenses, and licensing fees and standards, with preference
to “ancient Coachmen or such Coachmen as have suffered for
their service and affections to” the King or his late father.3
In 1654 the first Parliament of Oliver Cromwell’s Protectorate legislated
for the establishment of the Fellowship of Master Hackney Coachmen.
Though the Act was only to remain in force for three years, it was the
forerunner of every future Act of Parliament concerning hackney
carriages, including coaches, horse drawn cabs and taxis until the
present day.4
The present licensing system is more modern but some of it does date
back to the nineteenth century.
There are basically two trades providing driver and car hire: taxis
(hackney carriages), and private hire vehicles (PHVs or ‘minicabs’). The
main difference between the two is that taxis ply for hire from taxi ranks
and can be hired in the street whereas minicabs must be pre-booked
electronically, by telephone or calling in person at an office.
There is a large market overlay between taxis and PHVs. An increasing
proportion of taxis undertake pre-booked and contract hirings, and
PHVs are not infrequently booked immediately before hire (e.g. at
supermarkets or rail stations), so being used in a way almost
indistinguishable from plying for hire. The dividing line between the two
trades has therefore become increasingly blurred and there have been
an increasing number of calls for clarity.
The present regulatory arrangements governing taxis and PHVs have
grown up by historical accident rather than design. The law has
different rules for taxis and PHVs and varies within and outside London. The trade is continually evolving and technological change has had
marked effects, as discussed below.
3. Licensing law in Scotland,
Wales and Northern Ireland
Licensing law is devolved across the UK. In Scotland, Wales and
Northern Ireland the relevant law and guidance are set out, briefly,
below.
The remainder of this paper focuses on the law in and issues relating to
England.
3.1 Scotland
In Scotland taxis and PHVs are licensed under Part II of the Civic
Government (Scotland) Act 1982, as amended.
The licensing system is similar to that in England but there are some
differences. One of the major ones, which campaigners in England have
flagged up, is the cross-border hiring of PHVs (see section 7.2 for more
information). In Scotland section 21(1)(b) of the 1982 Act requires PHVs
to return to their licensing area to accept a booking after travelling
outside that area (e.g. a PHV driver in Glasgow can accept a fare in
Glasgow that takes them out of the city but they cannot pick up
someone outside the city, they have to return to Glasgow to pick up
another fare).
The most recent information on the Scottish licensing system is a
briefing by the Scottish Parliament Information Centre (SPICe) in 2014
on what became the Air Weapons and Licensing (Scotland) Act 2015
and a 2016 consultation by the Scottish Government on the impact of
new technologies on the taxi and PHV industry.5
3.2 Wales
Full legislative powers in this area have only recently been devolved to
Wales.
In Wales, taxis are licensed by district councils under the Town Police
Clauses Act 1847 or that Act as amended by the Local Government
(Miscellaneous Provisions) Act 1976. All taxis and their drivers must be
licensed. PHVs, drivers and operators are subject to licensing if a district
council has adopted Part II of the 1976 Act (most have) or has similar
provisions contained in a local Act.
There had been some confusion as to where legislative competence lay
following the Government of Wales Act 2006. As the Law Commission
explained in their 2014 report on overhauling the licensing system:
In the consultation paper, we set out our view that legislative
competence in respect of the regulation of taxis and private hire
vehicles was devolved under the Government of Wales Act 2006.
That view was reflected in our preliminary proposals. However,
since that time it has become apparent that Welsh Ministers
consider the legal position to be too unclear to support that
conclusion. In light of that, we proceed for the purposes of this
report on the basis that legislative competence in respect of the
regulation of taxis and private hire vehicles is not devolved and
that the relevant functions will be exercised by the Secretary of
State in relation to all of England and Wales.6
The second report of the Silk Commission recommended further
devolution of powers on taxi regulation.
7 The February 2015 St David’s
Day Agreement stated the then Government’s intention to take forward
most of the recommendations in the Silk report, including the
registration of taxis and PHVs.
The Wales Act 2017 devolves to the Welsh Assembly the powers to
legislate for taxi and PHV vehicle and driver licensing and PHV operator
licensing. It does this by inserting a new Schedule 7A into the
Government of Wales Act 2006 (and repealing Schedule 7). Under Head
E1 of new Schedule 7A are listed those road transport powers reserved
to Westminster. Taxi and PHV regulation is not listed. Section 28 of the
Act further transfers the Secretary of State’s functions in section 10 of
the Transport Act 1985 (the immediate hiring of taxis at separate fares),
to Welsh Ministers.8
On the issue of cross-border services, the impact assessment
accompanying the then Bill stated that “any taxi and PHV firms that
operate across the English-Welsh border would have to work within,
and comply with, different regimes if the Assembly legislates to
introduce a different licensing regime in Wales”.
9
In June 2017 the Welsh Government launched a consultation on reform
of the taxi law in Wales.10 The consultation closed in September 2017
and a summary of responses was published in February 2018. On 9
October 2018 the Senedd Research Service published a paper indicating
that the Welsh Government intends to “publish a White Paper this year
with detailed proposals for reform”.11 The Welsh Government has yet to
publish any further proposals.
3.3 Northern Ireland
In Northern Ireland taxis are licensed under the Taxis Act (Northern
Ireland) 2008. The Act sets out a new legal framework for the
regulation of taxis and taxi services. It covers the licensing of taxi
operators, drivers and vehicles, fares and taximeters, hiring of taxis at
separate fares, enforcement and penalties. The Taxi Licensing
Regulations (Northern Ireland) 2015 (NISR 2015/393) established the new framework, which came into effect from 31 May 2016. A summary
is available on the NIDirect website.
4. Licensing law in England,
outside London
The licensing conditions that are applied to taxi and PHV operators and
drivers and the local conditions of vehicle fitness are for each local
licensing authority to decide, so can vary considerably from area to area.
Licensing authorities are entitled to charge a ‘reasonable’ fee to cover
the costs of administration and issue of a licence:
… a district council may demand and recover for the grant to any
person of a licence to drive a hackney carriage, or a private
vehicle, as the case may be, such a fee as they consider
reasonable with a view to recovering the costs of issue and
administration and may remit the whole or part of the fee in
respect of a private hire vehicle in any case in which they think it
appropriate to do so.12
4.1 Taxis/hackney carriages
Taxis and their drivers have to be licensed. Outside London the local
district council is usually the licensing authority for vehicles and drivers.
Licences are issued under the Town Police Clauses Act 1847 or that Act
as amended by the Local Government (Miscellaneous Provisions) Act
1976.
In granting a taxi driver’s licence the authority is required to satisfy
itself that the applicant is a ‘fit and proper’ person. This expression is
not defined in statute and its interpretation is for each council to decide.
Authorities may make byelaws covering such matters as fares and taxi
ranks.
A number of licensing authorities across England have adopted
conditions of fitness identical or similar to those imposed in London and
only allow drivers and vehicles that meet them to be licensed in their
areas. This can involve:
• a criminal record check;
• a comprehensive topographic examination;
• a medical;
• a driving test; and/or
• a check on the financial standing of prospective proprietors.
There is no statutory requirement for local authorities to carry out a
criminal record check before issuing a licence to a taxi driver. As they
are, however, required to ensure that the applicant is a ‘fit and proper
person’, many authorities do, in fact, require such a check. Section 47
of the Road Traffic Act 1991 gave licensing authorities a power to check
an applicant’s background with the police. Now they rely on the
Disclosure and Barring Service (DBS) rather than on local police forces to
supply criminal record information about applicants.
In addition, many licensing authorities outside London have decided to
insist on the medical requirements of the Group 2 licence for all taxi
drivers.13 It is up to the individual authority to decide on the
requirements that a driver must meet and it is responsible for
determining the standards, including medical requirements, to be
applied to taxi drivers in their areas, over and above the driver licensing
requirements.
Licensing authorities also set standards for vehicles licensed in their
areas. Some of the larger authorities stipulate that only wheelchair
accessible vehicles will be licensed (for more information see section 7.3,
below). The majority of taxis outside London remain, however, saloon
cars. Section 47 of the 1976 Act allows a licensing authority to attach to
the grant of a licence for a hackney carriage any conditions that the
district council may consider ‘reasonably necessary’ (such as number of
seats). Any person aggrieved by any conditions attached to the licence
may appeal to a Magistrates’ Court under section 47(3).
Local licensing authorities have the power to set maximum fares under
sections 65 and 66 of the 1976 Act, as amended, and most do. The
Government advises that fare scales should be set with a view to
practicality and regularly reviewed.14
There used to be a special taxi/PHV driver test, administered by the
Driver and Vehicle Standards Agency (DVSA), but this was abolished
from 31 December 2016 so that DVSA could re-focus its resources on
its statutory duties.15
4.2 Private hire vehicles/minicabs
A private hire vehicle (PHV), or ‘minicab’, is defined in section 80 of the
1976 Act as:
… a motor vehicle constructed or adapted to seat [fewer than
nine passengers], other than a hackney carriage or public service
vehicle [or a London cab] [or tramcar], which is provided for hire
with the services of a driver for the purpose of carrying passengers
This definition specifically excludes taxis and buses but does not make
any distinction between chauffeur-type services and conventional PHV
services. Exemptions from licensing permitted under the 1976 Act are
listed under section 75, they include vehicles used for weddings and
funerals.
PHVs are not permitted to ply for hire in the streets, or at a rank,
like a taxi: they can only be hired through an operator, who usually
controls their PHVs by means of radios or other communications device.
The owner of a PHV is usually referred to legally as its ‘proprietor’; in
practice most PHVs are owner-driven.
PHV drivers and operators are subject to licensing if a licensing authority
has adopted Part II of the 1976 Act or has similar provisions contained
in a local Act. About 95 per cent of councils, including all the larger
ones, have adopted the provisions. There is no control on the fares that
may be charged. As PHVs have to be booked in advance, the customer
is expected to agree the fare at the time of booking.
PHV drivers need an ordinary driving licence covering category B, which
allows them to drive vehicles up to 3.5 tonnes and with up to eight
passengers, and must also be a ‘fit and proper’ person. PHV drivers can
be subject to the same criminal record checks and topographical
knowledge tests as those required for taxi drivers. Most licensing
authorities also require medical certificates. Again it is for the licensing
authorities to decide who is a ‘fit and proper person’ as it is not defined
in legislation.
In terms of vehicles, section 48 of the 1976 Act states that before
granting a licence for a vehicle to be used as a PHV, the licensing
authority must be satisfied that the vehicle is:
• suitable in type, size and design for use as a PHV;
• not of such design as to lead any person to believe the vehicle is a
hackney carriage;
• in a suitable mechanical condition;
• safe; and
• comfortable.
5. Licensing law in London
5.1 Taxis/hackney carriages (‘black cabs’)
Transport for London (TfL) licenses London taxis and taxi drivers under
the Metropolitan Public Carriage Act 1869 and the London Cab Order
1934 (SI 1934/1346). The 1934 Order, as amended, is the main
legislative basis for the present licensing regime. There are two types of
London taxi driver licence: the All London/Green Badge and the
Suburban/Yellow Badge.
16
TfL sets fare levels and approves fees for driver and vehicle licences. The
taxi fare tariffs are set in accordance with a formula devised by TfL,
following consultation with the taxi trade and others, including London
TravelWatch.
The requirements for drivers include a minimum age limit of 21 years
(there is no upper age limit); meeting the Group 2 standard of medical
fitness to drive; criminal records and financial standing checks; and the
Knowledge of London test.17 TfL has a duty to ensure it grants licences
only to people who are ‘fit and proper’ to drive a taxi.18 An applicant
may invite the licensing authority to reconsider a decision to refuse a
licence or appeal the decision to the Magistrates’ Court.
Vehicles for use as taxis in London have to satisfy the metropolitan
Conditions of Fitness. These prescribe, for instance, a turning circle of
8.535 metres, emissions limits, acceptance of contactless payment,19 an
approved taximeter to be fitted, wheelchair accessibility and a 15 year
age limit.
20
The London taxi trade supports these initiatives, especially reducing
emissions, accessibility band modernisation of the passenger offering
(e.g. with on-board ultra-fast Wi-Fi). 21
5.2 Private hire vehicles/minicabs
The London minicab trade was unregulated for much longer than the
taxi trade or PHVs outside London.22 The law changed in 1998 and
licencing was gradually introduced over the following six years.
In 2000 TfL assumed responsibility for PHV licensing from the Secretary
of State under section 254 of the Greater London Authority Act 1999.
The Private Hire Vehicles (London) Act 1998 provided for the licensing
of minicabs in London and applies to PHV operators, drivers and
vehicles. It was a Private Members’ Bill introduced by Sir George Young,
former Conservative Secretary of State for Transport, with the support
of all three main political parties. It did not specify the regulatory system
and left considerable discretion to the regulatory authority to decide the
details. Such an arrangement was in line with the precedents for the
regulation both of London taxis, and of taxis and PHVs outside London.
Under section 1 of the 1998 Act a PHV is defined as:
…a vehicle constructed or adapted to seat fewer than nine
passenger seats which is made available with a driver to the
public for hire for the purpose of carrying one or more
passengers, other than a licensed taxi or a public service
vehicle.23
The operator, driver and vehicle licensing requirements were introduced
in stages between October 2001 and March 2004.24
TfL requires PHV drivers to:
• be at least 21 years of age;
• hold a full GB, NI or EEA driving licence that is at least three years
old;
• have the right to live and work in the UK;
• be of good character (established through an ‘enhanced’ criminal
records check);
• meet the Group 2 medical standards; and
• undertake a topographical skills assessment.25
Vehicles licensed as PHVs by TfL must be no older than five years and
meet the Euro 4 standards for emissions at time of licensing (for new
licenses) or be no older than 10 years at time of licensing (for existing
licensees).26
Companies and individuals licensed as PHV operators by TfL must meet
a number of requirements, one of the most significant being that they
are a ‘fit and proper person’. TfL’s guidance states that: “In order to be
considered as [a fit and proper person], applicants will be expected to
demonstrate that they have complied with other legal requirements connected with running a business. Failure to do so could result in the
refusal of an application”.
27
TfL also recently changed the licensing fee structure for operators, so
that those with bigger operations pay a higher fee: this varies from
£2,000 for a five year licence for a small operator with 10 or fewer
vehicles to £2.9 million for a five year licence for a large operator with
10,001 or more vehicles.28
5.3 London-specific issues
Emissions
On 8 April 2019 TfL is planning to introduce an Ultra Low Emission Zone
(ULEZ). From this date most vehicles will need to meet exhaust emission
standards or pay a daily charge, when travelling in central London.
These plans originated under the previous mayor, Boris Johnson, and
have been brought forward by the current mayor, Sadiq Khan.
The question of what to do with the London taxi trade in the context of
the ULEZ has been a difficult one – the ULEZ itself will not apply to black
cabs29 but there are separate plans to ‘green’ the taxi and PHV fleets in
London.
In October 2015 TfL announced its decision to go ahead with the
introduction of a ZEC (zero emission capable) requirement for all taxis
licensed for the first time from 1 January 2018. A voluntary
decommissioning scheme for taxis over 10 years old would be
introduced and purchasing grants to assist in the purchase of ZEC taxis
would also be available. 30
For PHVs, from 1 January 2020 all vehicles under 18 months old and
licensed for the first time would have to be ZEC. To clean-up the PHV
fleet in readiness for this change, all PHVs licensed for the first time
between 1 January 2018 and 31 December 2019 (regardless of age)
must be either Euro 6 (diesel/petrol) or a Euro 4 petrol-hybrid. Older
PHVs (over 18 months) would need to be Euro 6 (petrol/diesel) when
licensed for the first time between 1 January 2020 and 31 December
2022, with the intention that all vehicles granted a PHV licence for the
first time after 1 January 2023 must be ZEC, regardless of age.31
The taxi trade is concerned about the cost of these new requirements
for black cabs.
32
In March 2015 the Government announced that £25 million had been
set aside specifically for the Greater London area to help taxi drivers cover the cost of upgrading to a greener vehicle. DfT said that this
funding was “in addition to £40 million already committed by the
Mayor of London to compensate taxi drivers whose vehicles are affected
by new tighter age limits to retire the oldest, most polluting taxis”.33
In November 2016 the Government announced that it would make
available a further £150 million for cleaner buses and taxis.34 In March
2017 it announced a £50 million Plug-in Taxi Grant programme. This
will give taxi drivers up to £7,500 off the price of a new vehicle. Taxi
drivers who switch to the new electric cabs could also save around
£2,800 in fuel costs a year. It also announced £5.2 million for new
dedicated chargepoints for electric taxis in London.
35
In 2018 the Government confirmed its intention to exempt new
purpose-built zero-emission capable taxis (London black cabs) from the
first year VED supplement for vehicles with a list price of over
£40,000.36
The new ‘green’ black cab
In March 2015 Geely’s announced plans for a new £250 million state of the art
facility to produce the next generation of low-emission London Black Taxis. This
included a £17 million contribution from the Government’s Regional Growth
Fund to build the facility.37 The new plant, in Coventry, opened in March
2017.38
In December 2017 the rebranded London Electric Vehicle Company (LEVC)
launched the new model TX, which has a small petrol generator with an
advanced battery electric powertrain, giving drivers a range of 80 miles on pure
electric, and a combined range of up to 400 miles.39
PHV licensing reform, 2015-
In March 2015 TfL published for consultation a review of PHV
regulations. This looked at several issues, including: the complaints
process; operating centres; customer information; an English language
requirement for drivers; and driver training.40 In September TfL
published further proposals for consultation41 and in March 2016 the
TfL Board approved the following changes:
• More robust ‘hire and reward’ insurance requirements that will
mean a policy has to be in place for the duration of the vehicle
licence, including when the vehicle is presented for inspection to
TfL;
• A formal English language requirement for all drivers;
• A fare estimate for customers in advance of their journey;
• The provision of driver and vehicle details to customers, including
a photo of the driver, before the start of each journey where
customers are able to receive this information;
• Private hire operators will be required to ensure that customers
can speak to someone in the event of a problem with their
journey; and
• Requiring operators to keep improved records and provide driver
and vehicle information to TfL regularly to make enforcement
easier and more effective.42
The bulk of these changes came into force in June 2016 following
amendment of the Private Hire Vehicles (London PHV Licences)
Regulations 2004.
43
The English language requirement was supposed to take effect from 1
October 2016 and require all applicants to present a valid English
language certificate with a B1 level of English on the Common
European Framework (CEFR).
44 However, Uber had indicated its
intention to file a legal challenge against the requirement, which the
company subsequently dropped in February 2018.45 TfL has said that:
A transitional process is in place and applicants for new licences
and renewals have until 30 April 2019 to provide evidence that
they meet the English language requirement. For applications
received after 30 April 2019, applicants will have to provide
evidence that they meet the English language requirement as part
of their application before a licence will be issued.46
In March 2018 TfL published a consultation on further reforms to
improve private hire safety. These were in the fields of driving tests and
background checks for PHV drivers and signage, driver ID and insurance
for PHVs. The specific proposals were as follows:
• Driving tests: to introduce an advanced driving assessment for
PHV drivers and an enhanced wheelchair assessment for all PHV
drivers who drive a wheelchair accessible PHV;
• Driver background checks/vetting: to improve the vetting of
PHV driver applicants, in particular for individuals who have lived
for an extended period outside the UK or come to the UK from
another country, including: self-declaration of criminal convictions
by applicants; references from professionals or those of standing
in the country of origin; or a minimum residency in the UK
requirement;
• PHV signage: to introduce new signage in PHVs displaying
customer contact information; new colour-coded PHV licence
discs to make it easier to identify PHVs with expired licence discs
and to consider whether there should be new signage to increase
the visibility of PHVs;
• Driver ID card: to display a version of the PHV driver’s ID card on
the nearside of the PHV on the front windscreen in the top corner
and to consider whether the information contained on PHV driver
ID cards should be more visible from outside of PHVs; and
• Insurance: to consider whether any changes are needed to the
existing PHV hire or reward insurance requirements, including
whether PHV drivers should be required to produce evidence that
the PHV they use is covered by hire or reward insurance, and if
they should what format the evidence should be in.
47
The consultation closed in June 2018.
Re-licensing of Uber, 2017-
On 22 September 2017 TfL announced that it had decided not to issue
Uber with a new PHV operator’s licence for the Greater London area. It
stated that it had taken this decision on the following grounds:
TfL considers that Uber’s approach and conduct demonstrate a
lack of corporate responsibility in relation to a number of issues
which have potential public safety and security implications. These
include:
• Its approach to reporting serious criminal offences.
• Its approach to how medical certificates are obtained.
• Its approach to how Enhanced Disclosure and Barring
Service (DBS) checks are obtained.
• Its approach to explaining the use of Greyball in London –
software that could be used to block regulatory bodies
from gaining full access to the app and prevent officials
from undertaking regulatory or law enforcement duties.48
Uber consequently indicated their intention to appeal the decision to a
magistrate’s court under section 3(7) and section 25 of the Private Hire
Vehicles (London) Act 1998, as amended. They filed their appeal on 13
October 2017.49 TfL received support for its licensing decision from the
taxi unions and others, while the Prime Minister, Theresa May, and
others expressed concern about the potential impact on Londoners.50
At a hearing on 18 December 2017 TfL disclosed its full reasons for
refusing Uber a new licence. These included a charge that Uber had
given TfL “materially false and misleading” information about its
operating model, specifically that in a 2015 court case:
systems. Deloitte found the company’s central computers
accepted a booking only after a driver had done so.
TfL’s letter states that it believed that “the point is determinative
and that Uber’s current operating model is accordingly unlawful”.
It says that, even if it is wrong about this, the “materially false and
misleading” information it and the court had been given by Uber
was one of three factors that made the company “not fit and
proper” to hold an operator’s licence.51
While waiting for the appeal, scheduled for June 2018, Uber was able
to continue operating in London as normal. In March 2018 the
company announced changes to its app in London, to make it clear
that:
All bookings through our app in London and surrounding areas
(such as at airports like Heathrow) will be accepted by Uber
London, which means that only drivers licensed by Transport for
London can carry out those trips.52
There followed reports that in April 2018 Uber had requested an 18-
month licence from TfL, rather than the maximum five-year licence. The
Evening Standard reported that this was: “an attempt to show that it
has changed its ways … to prove Uber meets the requirements of being
a fit and proper person to hold a licence”.
53
Uber’s appeal was held in June 2018 and resulted in the company being
granted a 15-month licence. During the hearing, Uber conceded that its
London operating licence should not have been renewed in 2017 over
safety concerns but said there had been “wholesale change” since
then.54 In her final judgement on 26 June, the Chief Magistrate, Emma
Arbuthnot, concluded:
Taking into account the new governance arrangements, I find that
whilst ULL [Uber London Limited] was not a fit and proper person
at the time of the Decision Letter and in the months that
followed, it has provided evidence to this court that it is now a fit
and proper person within the meaning of the Act. I grant a licence
to ULL.
The length of the licence has been the subject of discussion. The
rapid and very recent changes undergone by ULL lead me to
conclude that a shorter period would enable TfL to test out the
new arrangements. A 15 month licence will enable [TfL] to check
the results obtained by the independent assurance procedure set
out in condition number 4 whilst ensuring the public are kept
safe.
As indicated above, a number of conditions were attached to the grant
of the new licence; these included matters relating to corporate
governance and intra-group relationships and TfL notification
obligations and enforcement.
Mayor Khan issued a statement in response to the relicensing:
Uber has been put on probation – their 15 month licence has a
clear set of conditions that TfL will thoroughly monitor and
enforce.
As a result of us standing up for Londoners, Uber has been forced
to overhaul the way it operates not just in London but across the
world, including completely changing its global governance
structures and implementing new systems for reporting alleged
crimes.
Taxi ranks
In February 2015 TfL published a Taxi Rank Action Plan. The Plan set out
plans to expand the network of 500 taxi ranks that TfL has appointed,
with £600,000 funding to further increase the number of ranks by 20%
by 2020. It also looked at helping suburban taxis by exploring the
possibility of creating more Island Ranks – that allow suburban drivers to
pick up passengers on the edge of their licensed area. TfL has
established seven Island Ranks, including Finsbury Park, Putney Station
and Garrett Lane, and plan to introduce more – informed by the
strategic review of rank provision
Second Reading blog, “Employment rights in the gig economy”, 26 June 2017. More
generally, further information on roads- and traffic-related issues can be found on the
Roads Briefings Page of the Parliament website.
6. Enforcement
There are a number of offences associated with taxi and PHV licensing
and operations, largely enforced by local licensing authorities. The Law
Commission explained:
Under current law, responsibility for enforcement of the taxi and
private hire licensing regime lies with the licensing authority that
issued the relevant licence. In particular, authorities have powers
to suspend or revoke licences, or to refuse to renew them.
Licensing authorities can also bring criminal charges against a
suspected offender. Where breaches of licensing conditions also
constitute offences, the police can also take enforcement action.
Crucially, licensing officers are unable to undertake enforcement
against vehicles, drivers and operators licensed in another area.58
The Government’s guidance to licensing authorities states that they
should actively seek out operators who are evading the licensing system.
It acknowledges that resources devoted by licensing authorities to
enforcement will vary according to local circumstances (e.g. if there is a
particular problem with touting). It recommends that:
… it is desirable to ensure that taxi and PHV enforcement effort is
at least partly directed to the late-night period, when problems
such as touting tend most often to arise […] Some local licensing
authorities employ taxi marshals in busy city centres where there
are lots of hirings, again perhaps late at night, to help taxi drivers
picking up, and would-be passengers queuing for taxis.
59
It also highlighted the change to the law in 2007 which permits
licensing authorities to suspend or revoke a taxi or PHV driver’s licence
with immediate effect on safety grounds.
60
In its 2014 report, the Law Commission recommended that
enforcement powers should be improved in the following areas:
• a new power for licensing officers to stop licensed vehicles;
• touting;
• power to impound vehicles;
• fixed penalty notices; and
• cross-border enforcement.61
The issue of cross-border hiring and its enforcement is examined in
more detail below.
7. Notable reports on industry reform
7.1 Law Commission, May 2014
The Government has not yet issued its formal response to the
report or indicated that it would bring forward the Commission’s
proposals, set out in their draft Bill.
Most recently, in July 2017 the then Minister, John Hayes, said
that the DfT had set up a working group to consider any
regulatory issues and remedies, including the Law Commission’s
recommendations, to report in 2018.
62 This is the Task and Finish
Group report, discussed in section 7.4, below.
In May 2012 the Law Commission published a consultation paper
seeking views on a number of proposed reforms to how taxis and PHVs
operate, designed broadly to deregulate the industry. The proposals
included:
• national minimum safety standards;
• removing geographic operating restrictions on PHVs;
• bringing the regime in London into line with the rest of England
and Wales;
• removing local quality restrictions;
• increasing enforcement powers; and
• removing licensing exemptions for special vehicles like wedding
and funeral cars.63
The Commission also sought views on miscellaneous items such as a
new category of wheelchair accessible vehicles; improving the
enforcement powers of licensing officers; and the idea of a new ‘peak
time’ taxi licence that could only be used at particular times of day as
decided by the licensing authority.64
The Commission published its final report and a draft bill on 23 May
2014. The main recommendations in the report were as follows:
• Retention of the two tier system that distinguishes between
taxis and PHVs on grounds of consumer choice and
appropriateness (a single system would lead to over or underregulation);
• Significant changes to the legal distinction between taxis
and PHVs on the grounds that the current system relies heavily
on the imprecise concept of ‘plying for hire’, which is not defined
in statute and has become the subject of a body of case-law that
is not wholly consistent;
• Freeing up cross-border working for PHVs so that operators
would no longer be limited to using drivers and vehicles from their
own licensing area or restricted to only inviting or accepting
bookings within that licensing area;
• A single consolidated legislative framework throughout
England and Wales, including London, and applying to any vehicle
carrying one or more passengers, where the vehicle and driver
have been hired for that purpose, excluding transport provided as
part of a wider service (e.g. hotel courtesy cars or by carers) and
transport provided in connection with weddings and funerals.
Stretch limousines, pedicabs and other novelty vehicles would be
brought within private hire regulation;
• Common national standards for vehicles, drivers and
dispatchers determined by the Secretary of State further to a
statutory consultation with specified stakeholders including the
trades, regulators and disability groups. Licensing authorities
would retain responsibility for issuing licences and for
enforcement and could supplement the national standards with
local conditions for taxis only;
• New criminal offences specific to the trades involving the
abolition of a number of out of date offences; replacing them
with a more streamlined set of offences contained in the draft Bill;
• Controls on transferability of licence plates in areas
introducing new quantity restrictions, though transfers would
continue to be permitted in areas where quantity restrictions are
currently in place;
• Improved equality and accessibility by requiring all drivers to
undergo disability awareness training and giving licensing
authorities the power to introduce a new duty to stop when
hailed;
• Enhanced powers for licensing officers, including granting
them powers to stop a licensed vehicle on a road, without the
need for a police officer to be present; to impound vehicles for
touting; and to issue a fixed penalty notice to a person whom
they have reason to believe has breached any provision in national
standards. These powers would also be exercisable in relation to
out-of-area vehicles; and
• A uniform hearings and appeals system involving a
standardised procedure for statutory appeals across England and
Wales (including London) for all forms of licence and irrespective
of whether the decision challenged is a refusal of an application
for a licence, a suspension or a revocation. In line with the current
London model, applicants should be able to require the licensing
authority to reconsider its original decision, the second stage in
the statutory appeal process being an appeal to the magistrates’
court, with a further right of appeal to the Crown Court
burden; reduced driver assaults; improved safety standards; and reduced
enforcement costs.66
As there were no plans to bring forward a Taxi Bill in the final session of
the 2010 Parliament, the Government included three measures in what
is now the Deregulation Act 2015.
Deregulation Act 2015
In March 2014 the Government published amendments to what
became the Deregulation Act 2015. The Act applies to England and
Wales, but excludes London and Plymouth, where separate legislation
exists. It argued that the:
… measures are among the Law Commission’s recommendations
and rather than undermining or duplicating the Law Commission
process, these measures can be regarded as the first steps on a
longer path of reform which will be continued in the event that a
dedicated Taxi Bill is brought forward.67
There were initially three measures in the Bill, but only two made it into
the final Act:
• to set a standard duration of three years for a taxi and PHV
driver’s licence and a standard duration of five years for a
PHV operator’s licence. A lesser period may be specified only if
appropriate in a particular case (section 10); and
• to allow a PHV operator to sub-contract a PHV booking to
another operator who is licensed in a different licensing district
outside London or based in London or in Scotland (section 11).
The third measure, which was removed from the Bill at Lords
Committee stage in October 2014, would have allowed people who do
not hold a PHV driver’s licence to drive a licensed PHV when the vehicle
was not being used as a PHV (for example, a licensed PHV driver’s
partner could use the vehicle for a family outing).
The Opposition and the industry had been vociferous in their opposition
to this charge, arguing that it could compromise passenger safety. The
then Shadow Transport Spokesman, Richard Burden, explained.
When she announced the Government’s intention to remove the
measure, Baroness Kramer said:
Its purpose was to allow the use of private hire vehicles for leisure
purposes. Noble Lords will be aware that, outside London, a
person who is licensed as a private hire vehicle driver cannot use
the family car and therefore has to purchase a second car. At
£20,000 or £30,000, or the lease equivalent, that is a barrier
which denies people employment. It is an issue that we need to
address at some point. It also means in particular that in a number
of rural areas there is, frankly, a shortage of private hire cars and
taxi services. Bringing in more of those vehicles and their services
for local people could be helped by removing this barrier.
However, after the Government listened closely to issues raised
about the way in which we have presented this clause, we have
decided that listening, as we always do, is important, and
concluded that although we can still see arguments for tackling
this underlying problem—I think that there is general agreement
on that—it would be better done as part of the package of
measures recommended by the Law Commission in a broader
reform of taxi and private hire vehicle licensing than through this
clause.69
As indicated above, section 11 of the 2015 Act makes changes to crossborder hiring, to allow a PHV operator to sub-contract a PHV booking to
another operator who is licensed in a different licensing district outside
London or based in London or in Scotland. The Minister at the time,
Stephen Hammond, explained that the changes would:
… have a huge impact on the ability of operators to meet
passenger needs and to grow their businesses, and it should help
to make the passenger’s experience much more convenient. In
short, it is a liberating measure. It will allow the private hire trade
to operate in the way that it sees fit, not just in the way that the
current legislation dictates … the onus is on the original operator,
who accepts the booking and subsequently passes it on, to retain
liability for the satisfactory completion of that journey. It is also
clear there is a duty on the operator who takes the booking to
keep a full record and to report the full record of that journey.
70
The changes came into force on 1 October 2015.71
7.2 Institute for Economic Affairs, November
2016
In November 2016 the IEA, a free market think tank, published a report
calling for deregulation of the taxi market, particularly in London. It
argued that:
• Quantity restrictions on taxis should be lifted so that consumers
could benefit from shorter waiting times, lower fares and higher
quality services;
Technological changes have rendered obsolete the distinction
between taxis and PHVs and both should be treated in the same
way going forward, by lifting restrictions in the taxi market;
• Private regulation such is preferable to statutory regulation as it
allows rules to evolve according to the preferences and demands
of consumers, and ensures bad regulation does not become
entrenched; and
• Deregulation would foster more competition allowing drivers to
compete with each other for business; passengers to compete for
rides and apps to compete for users – again to the advantage of
consumers and drivers.72
Taking all this into account, it recommended the following priorities for
the reform of taxi regulation in London:
• A one-tier system of regulation, as the old separation
between taxis and PHVs is obsolete.
• A preference for private regulations, which have been
successful in app-based services.
• The abolition of taxi privileges (such as their monopoly on
ranks) so as to create a level-playing field for taxis and
PHVs.
• Control given to the London Taxi Drivers’ Association to
regulate the quantity of black cabs and fare prices – just
like private hire firms oversee their vehicles.
• Crucially, the LTDA should not have a monopoly – black
cab drivers should be able to form competing brands within
the trade.
• Statutory regulations should be limited to criminal
background checks, monitoring of fraud or illegal activity,
and reviews of the state of competition in the market.73
7.3 All Party Parliamentary Group on taxis,
2017
On 12 July 2017 the All Party Parliamentary Group (APPG) 74 on taxis75
published its report into the future of the taxi and PHV industry. The
Group had requested written evidence and held three oral evidence
sessions in February and March 2017.76
The report focused on the taxi and PHV trade in London, which has
undergone dramatic changes in the past five years, and drew across
lessons for London for other cities in England. It also looked at England-wide issues like cross-border hiring of PHVs. The Group’s key
recommendations were as follows.
For Government:
• Stop cross-border hiring by legislating to create a statutory
definition of cross border hiring whereby a journey must “begin
or end in the licensing authority where the licence was issued”
and consult on new statutory guidance to contain a robust set of
minimum licensing standards for all licensing authorities to
impose;
• Establish a national database of registered taxi and PHV drivers
and operators in conjunction with the DVLA and police;
• Legislate to provide a legally enforceable statutory definition of
plying for hire;
• Consider granting the power to cap the number of PHVs to
Transport for London, elected mayors and combined authorities;
• Legislate to require all PHV operators to have operators’
insurance and all vehicles to have full hire and reward insurance
in place at all times;
• Work with local authorities to ensure that there is adequate rapid
charging infrastructure in place to support the use of new electric
taxis and ensure that the car tax (vehicle excise duty) system does
not penalise the purchase of new electric taxis.77
For London:
• Transport for London (TfL) should review its mechanisms for
communicating with both the taxi and PHV trades and look at
how these could be improved. Both trades must also look to take
a more constructive and open approach to engagement with TfL;
• Taxis should remain exempt from the ULEZ (Ultra Low Emission
Zone) while PHVs come within the congestion charging regime;
and
• Government should review the Private Hire Vehicles (London) Act
1998 to ensure that it is for purpose in the digital age.78
And for local licensing authorities:
• In conjunction with local police, produce a code of conduct for
the use of apps by taxi and PHV drivers to sign up to in order to
ensure safe driving; in the longer term Government should
consider including a national code of conduct; and
• Take immediate steps to strengthen PHV regulation to ensure
that all PHVs are insured and that their drivers have the skills
and knowledge to ensure public safety.79
The report was debated in Parliament on 18 July. Introducing the report,
Wes Streeting said:
… there are two possible futures, both for the manufacturing of
vehicles and manufacturing jobs, and for other areas of the taxi
and private hire industry: a bright future or an existential crisis.
The Government have a clear role in ensuring that we head
towards a bright future rather than a bleak future.
[…] Action by Ministers is long overdue. The debate about the
future of the taxi trade has often been unfairly characterised as a
debate between those who support competition and innovation
and those who want to cling to the past. That is a lazy analysis […
many] taxi drivers … are not afraid of innovation or competition;
increasing numbers of drivers are embracing new platforms such
as Gett and mytaxi. Many cab drivers also accepted card payments
long before it was mandatory, and a great many more are keen to
get behind the wheel of the new generation of carbon neutral,
electric-capable taxis to play their part in improving air quality and
protecting our environment.
However, … taxi drivers find it increasingly difficult to compete
with both hands tied behind their backs in a changing
marketplace. Our challenge now is to make sure that the trade
enjoys a bright future as well as a proud history. I strongly believe
that, with smart and effective regulation and new national
standards, the taxi and private hire industries can succeed …
many small businessmen and businesswomen and their families
are counting on Ministers to act.80
Many of the APPG’s recommendations were echoed in a December
2017 report from the Urban Transport Group.81
7.4 Task and Finish Group, September 2018
As indicated above, in July 2017 the Government announced that in
response to various reports into the future of the taxi and PHV industry
and concerns about certain aspects of its operation, it had established a
working party to look at licensing. 82
The DfT published the report of this ‘Task and Finish Group’ on 24
September 2018. The group was chaired by Professor Mohammed
Abdel-Haq and included representatives from TfL, the Suzy Lamplugh
Trust, the Local Government Association, the Competition and Markets
Authority, the Licensed Taxi Drivers’ Association, the GMB union, the
National Private Hire and Taxi Association, and the Licensed Private Hire
Car Association. In his introduction to the report Prof. Abdel-Haq
acknowledged that:
Members of the Group have strongly held, sometimes polar
opposite opinions and, while this means that it has not always
been possible to reach a consensus, I am of no doubt that all have
the best interests of passengers and the trade foremost in their
thoughts.83
Generally, he stated that there was “no single solution to the challenges
facing the taxi and PHV sector” and that in light of this, “each aspect of this study and the consequent recommendation is dependent on
others”. He said that the aim of the report was:
… to produce a holistic ecosystem and solution to the problems it
was devised to address and, as a result, to set out a
comprehensive platform for the changes necessary to protect and
promote the public interests in the common good.84
He concluded that the onus now fell on ministers to:
… take the ideas of the report further and to begin to craft the
legislation that it will, in some instances, require. In other
instances, I trust that Parliament and the Department will lead the
cultural change which is necessary to ensure that passengers,
workers, operators, and neighbouring authorities are treated
fairly. I look forward to the Government’s prompt response to this
report in order to maintain the momentum for improvement.85
In particular, he cautioned that “undue delay would risk public
safety”.
86
The report’s recommendations echoed to some degree those of the Law
Commission and the APPG on taxis before it, though not on all issues.
There were 34 recommendations which, in summary, proposed the
following:
• Taxi and PHV legislation should be revised as a matter of
urgency;
• Government should legislate for national minimum standards
for taxi and PHV licensing for drivers, vehicles and operators and
local licensing authorities should have appropriate new powers of
enforcement;
• DfT should urgently update its Best Practice Guidance and as a
matter of urgency press ahead with consultation on a draft of its
Statutory Guidance to local licensing authorities;
• In the short-term, large urban areas, notably those that have
metro mayors, should emulate the model of licensing in London
and be combined into one licensing area. In non-metropolitan
areas collaboration and joint working between smaller authorities
should become the norm;
• Government should introduce a statutory definition of both
‘plying for hire’ and ‘pre-booked’ in order to maintain the twotier system;
• Government should require companies that act as intermediaries
between passengers and taxi drivers to meet the same licensing
requirements and obligations as PHV operators;
• Government and licensing authorities should ‘level the playing
field’ by mitigating additional costs faced by the trade where a
wider social benefit is provided – for example, where a wheelchair
accessible and/or zero emission capable vehicle is made available;
• Government should legislate to allow local licensing authorities,
where a need is proven through a public interest test, to set a cap
on the number of taxi and PHVs they license;
All licensing authorities should use their existing powers to make
it a condition of licensing that drivers cooperate with requests
from authorised compliance officers in other areas;
• Government should legislate that all taxi and PHV journeys should
start and/or end within the area for which the driver, vehicle
and operator are licensed and local licensing authorities should
have appropriate new powers of enforcement;
• Licensing authorities should ensure that their licensing,
administration and enforcement functions are adequately
resourced, setting fees at an appropriate level to enable this;
• Legislation should be introduced by the Government as a matter
of urgency to enable TfL to regulate the operation of
pedicabs in London;
• Fixed Penalty Notices should be available for minor taxi and
PHV compliance failings;
• All ridesharing services should explicitly gain the informed
consent of passengers at the time of a booking and
commencement of a journey;
• All licensed vehicles must be fitted with CCTV (visual and audio)
subject to strict data protection measures, with cost-mitigation
measure for small businesses;
• National standards must set requirements to assist the public in
distinguishing between taxis, PHVs and unlicensed vehicles. These
should require drivers to have on display relevant details to assist
the passengers in identifying that they are appropriately licensed;
• All drivers must be subject to enhanced DBS and barred lists
checks;
• Government must issue guidance, as a matter of urgency, that
clearly specifies convictions that it considers should be grounds
for refusal or revocation of driver licences and the period for
which these exclusions should apply; the Quality Assurance
Framework and Common Law Police Disclosure Provisions must
be reviewed; and all licensing authorities must use the National
Anti-Fraud Network (NAFN) register of drivers who have been
refused or had revoked taxi or PHV driver licence;
• As a matter of urgency Government must establish a mandatory
national database of all licensed taxi and PHV drivers, vehicles
and operators, to support stronger enforcement;
• Licensing authorities must use their existing powers to require all
drivers to undertake safeguarding/child sexual abuse and
exploitation awareness training;
• All individuals involved in the licensing decision making process
(officials and councillors) must be obliged to undertake
appropriate training;
• Government must review the assessment process of passenger
carrying vehicle (PCV) licensed drivers and/or consideration of the
appropriate boundary between taxis/PHVs and public service
vehicles (PSVs);
• Licensing authorities must require that all drivers are able to
communicate in English orally and in writing to a standard that
is required to fulfil their duties, including in emergency and other
challenging situations;
All licensing authorities should use their existing powers to require
that the taxi and PHV drivers they license undergo disability
quality and awareness training;
• Licensing authorities that have low levels of wheelchair
accessible vehicles (WAVs) in their taxi and PHV fleet should
ascertain if there is unmet demand for these vehicles and licensing
authorities which have not already done so should set up lists of
wheelchair accessible vehicles (WAVs) in compliance with the
Equality Act 2010;
• Licensing authorities should use their existing enforcement powers
to take strong action where disability access refusals are reported,
to deter future cases;
• Licensing authorities should take into account any evidence of a
person or business flouting employment law as part of their test
of whether that person or business is ‘fit and proper’ to be a PHV
or taxi operator; and
• Government should urgently review the evidence and case for
restricting the number of hours that taxi and PHV drivers can
drive.
87
Some of these are explored in more detail in section 8, below.
The Government has yet to formally respond to the report. Most
recently on 15 October the Minister, Nus Ghani, said: “Ministers are
considering the recommendations made by the Chair of the Task and
Finish Group on Taxi and Private Hire Vehicle Licensing, a Government
response will be issued in due course. Legislation to reform the
regulation of taxis and private hire vehicles will be brought forward if
required”.
88
There will be a debate in Parliament on the report on 14 November
2018.
8. Issues
8.1 Capping licence numbers
Numbers of licensed operators, vehicles and drivers
The Government publishes taxi and PHV statistics for England every two
years. The most recent figures cover the year to March 2017 and were
published in September 2017. The key figures were as follows:
• compared to 2015 the total number of licensed taxis and PHVs
in England increased by 16% to 281,000;
• 73% of all licensed vehicles in England were PHVs;
• 39% of the total number of licensed taxis and PHVs in England
were in London;
• 58% of licensed taxis in England were wheelchair accessible;
and
• there were 356,300 taxi or PHV driver licences in England89
Table 1, below, shows that growth is being largely driven by increases in
PHV licences in London – the number of PHV drivers in London
increased by almost 50% on 2015. However, the number of licensed
PHV operators in London fell by almost 20% over the same period,
suggesting consolidation of the industry and dominance by a smaller
number of companies with larger numbers of drivers.90
Historical debates about local taxi caps
Local licensing authorities have the power to limit the number of taxis
they licence in their area, for reasons of managing the supply.
Successive governments have looked at whether it would be right to
remove the ability of licensing authorities to impose such restrictions.
Following an investigation by the Office of Fair Trading (OFT) in 2003
the Labour Government opted not to abolish local taxi caps (quantity
restrictions). More recently, the Law Commission stated that it would
not recommend abolishing these restrictions but that licences in areas
where new restrictions were imposed should not be tradable.
Briefly, in in August 2002 the OFT announced its intention to study the
taxi market.91 The main focus of the inquiry was the effects of licence
restrictions imposed by many local authorities on the supply of licensed
taxis. The OFT published their final report in November 2003. It
concluded that that the overall quality of taxi services could be
enhanced by reforming elements of the regulatory framework, including
lifting quantity restrictions, as they reduced availability and lowered the
quality of service to the public. 92
The Commons Transport Select Committee published a report on taxi
licensing and the OFT report in February 2004. It concluded that the
OFT was not able to support its chief recommendation on quantity
restrictions with the evidence presented in its report and that it did not
look sufficiently at the interrelationship between taxis and PHVs.
93 The
Labour Government announced in March 2004 that, on reflection, it
would leave in place the ability of licensing authorities to impose
quantity restrictions. They would, however, have to publish their reasons
for restricting the number of licences issued.94
In its 2014 report the Law Commission concluded that the ability of
local authorities to impose quantity restrictions on licensed taxis should
remain, but that there should be controls on the transferability of
licence plates in areas introducing new quantity restrictions. Transfers
would continue to be permitted in areas where quantity restrictions
were already in place.
95
Recent calls for PHV caps
Unlike with taxis, local authorities cannot limit PHV numbers – this is
most obviously an issue in London (see data, above). Those who want to
see local authorities given powers to restrict PHV numbers argue that
the market, particularly in London, is over-saturated and enables bigger
operators to use their pricing to drive out smaller operators. So what
might look like consumer choice in the beginning ends up in a
monopoly in which one or two large operators can raise prices with
impunity.
There are other reasons why some have called for a cap. For example,
the APPG on taxis cited grounds of increased congestion and pollution
in London. To address this, its July 2017 report called for TfL and the
Mayor of London to have the power to cap PHV numbers (and for the
same powers to be available to other mayors and Combined Authorities
should they request it).
In its December 2017 report the Urban Transport Group (UTG) went
into some detail about the impacts of higher PHV numbers on
congestion and air quality. On congestion it stated that:
Depending on local circumstances taxis and PHVs can both
contribute to congestion, by increasing the numbers of vehicles
on already congested streets, but also help to alleviate congestion,
through supporting the public transport network and reducing
the need for individuals to own and use private cars.97
And on air quality and carbon emissions it stated:
The evidence on the extent to which growth in PHV traffic … is
contributing to congestion is still emerging. The impacts are also
likely to be different in different cities. Some [operators] argue
that they primarily benefit travellers outside peak times and for
journeys where public transport is not so readily available. Others
have argued that, taking the long view, increased access to taxis,
PHVs and new business models for shared mobility, could help to
reduce car ownership and increase public transport use, which
would have benefits for congestion…
However a number of city authorities, which have experienced
rapid growth in PHV traffic, have expressed concern about the
impact on congestion.
[For example] KMPG argue that the large increase in the number
of PHVs in London has increased congestion … In London, one in
four vehicles entering the congestion charging zone is now a taxi
or PHV … Taxis and PHVs in London have historically been exempt
from congestion charging in the city, however some, including the
taxi trade, have argued that PHVs should now be subject to the
charge.98
UTG concluded that: “Given the rapid growth in PH[V] numbers over
recent years, and associated challenges such as congestion, allowing
authorities to place appropriate limits on the numbers of PH[V] licences
issued would give greater potential to manage growth in the sector and
contribute to wider policy goals”.
99
Not everyone agrees with this analysis. In their October 2016 report on
the taxi industry for the IEA, Kristian Niemietz and Diego Zuluaga
argued that there “was never a sound justification” for quantity
restrictions and that not only should there be no restrictions imposed on
PHVs but that taxi caps should be abolished. They stated that:
Where they have been abolished – such as in New Zealand,
Ireland and parts of the UK – consumers have generally benefitted
from shorter waiting times, lower fares, higher quality and a
greater diversification of the taxi market. Rather than trying to
suppress the growth of new business models in the PHV sector,
we should derestrict the taxi market.
They also argued that in a quantity-restricted taxi market, “fares can be
expected to be higher than they would otherwise be, representing a
redistribution from consumers to licence holders”:
The exact incidence will differ from country to country, but
generally, low-income consumers, who are less likely to own a
car, have been found to spend a larger proportion of their
budgets on taxi services than other income groups … Moreover,
waiting times for a taxi will be longer in a quantity-restricted
market.101
In its September 2018 report the Task and Finish Group stated that
granting licensing authorities the power to cap the number of PHVs
“could give them an extra tool to help reduce levels of congestion in
areas where high numbers of PHVs operate and thereby address in part
air quality issues”.
102
However, it also argued that the use of a cap “would require a public
interest approach”, not merely the ‘unmet demand’ test currently
applied to allow the limiting of taxi numbers. It explained:
There are potential drawbacks to licence restriction, including
administrative burden, restriction of competition and restriction of
work opportunities for drivers. Carrying out a clear, well
evidenced and considered public interest test before a numbers
restriction can be applied would enable an authority to weigh up
those factors and make a balanced decision.103
The Competition and Markets (CMA), which was represented on the
group, did not agree with the recommendation in this regard and said
in its statement in the annex to the report that “a numerical cap on the
number of providers of taxi/PHV services risks having the effect of
artificially and unnecessarily constraining competition, to the detriment
of passengers – depriving them of the best prospect of high service
standards, value for money and innovation in service provision”.
104 In
light of this, the CMA urged that if there were to be such a cap, any
required public interest test should include “the effects on competition,
including on service standards and affordability of fares, bearing in mind
that the absence of affordable fares can induce people to travel by less
safe modes of transport”.
105
8.2 PHVs cross-border working
There are long-standing questions about the cross-border working of
PHVs: the extent to which it exists, its desirability, how local authorities
can properly enforce it and whether the law should be changed to
prevent it
In its 2014 report, the Law Commission explained that in England and
Wales106 under current law, a licensed PHV driver can undertake
journeys starting or ending anywhere in England and Wales and that
operators are allowed to accept jobs where the pick-up and drop off are
both outside the operator’s licensing district.107 By way of example,
Knowsley Borough Council had changed its ‘intended use’ policy to
require PHV drivers who are licensed in Knowsley to work
predominantly in Knowsley. Uber, and Delta Merseyside Limited
brought a judicial review of that resolution on the ground that the
council was not empowered to insist that its licensed PHV drivers
operate within Knowsley, predominantly or otherwise. The case was
heard in February 2018 and judge ruled that Knowsley’s PHV driver’s
policy was unlawful.108
Legislation relating to PHV cross-border hiring
Section 75(2) of the Local Government (Miscellaneous Provisions) Act 1976
disapplies the provisions in section 46(1) of the same act, thus having the effect
of allowing PHVs to operate in the areas where they are not licensed.
Section 75(2B) and section 6(6)(b) of the Private Hire Vehicles (London) Act 1998
provide for drivers and vehicles licensed in London to pick up and drop off
anywhere in England and Wales and vice versa.
The legislation in London goes further, in sections 6(7) and 12(7) of the 1998 Act
it exempts journeys beginning outside London and in areas not subject to the
1976 Act (which was originally adoptive) from the requirement for a London
PHV driver and vehicle licences.
In terms of case law, see in particular Adur District Council v Fry [1997] RTR
257.
109
The Law Commission had very different views about what should be
done with regards PHV cross-border working than the taxi industry and
others who have reported on this issue since.
Drivers, vehicles and operators must be licensed in the same area and
operators can only invite and accept bookings within that licensing area.
The Commission argued that “this hampers them expanding their
business to have offices in neighbouring areas, and is increasingly
difficult to police given the rise in internet bookings”.
110 The
Commission therefore recommended ‘freeing up’ cross-border working
for PHV services:
Operators should no longer be limited to using drivers and
vehicles from their own licensing area; nor should they be
restricted to only inviting or accepting bookings within that
licensing area. Under our recommended regulatory framework,
licensing district boundaries lose much of their importance in
relation to private hire vehicles. Although local authorities will
continue to administer licences applied for in their area, they will
do so on the basis of national standards, which they will have no
discretion to vary. Once licensed, providers will be able to work across England and Wales and subject to enforcement action by
officers of any licensing authority.111
This was accompanied by recommendations about changes to
enforcement powers. Specifically that formal procedures for crossborder cooperation between licensing authorities be established,
including “a power for the licensing authority in whose area the
infraction occurred to propose an appropriate sanction to the home
authority as well as to suspend a licence temporarily”.112
The APPG on taxis disagreed with this approach. In its July 2017 report,
it said that the Government should legislate to create a statutory
definition of ’cross border hiring’ whereby a journey must “begin or end
in the licensing authority where the licence was issued” and that this
should be supported by statutory England-wide guidance setting out
minimum licensing standards.
113 It stated:
We believe that the Government should, at the earliest
opportunity, consult on statutory guidance for taxi and PHV
licensing and the proposed guidance should set out a robust set
of minimum licensing standards for all licensing authorities to
impose. To stop the exploitation of cross border hiring, the
Government should also consider legislating to create a statutory
definition of cross border hiring whereby a journey must “begin
or end in the licensing authority”.114
In its December 2017 report the Urban Transport Group argued that
local licensing officers should be able to undertake enforcement action
against any taxi or PHV operating within their authority area, no matter
where the vehicle is licensed and, in the longer term:
Introducing a requirement that taxis and PH journeys start
or end in the area for which the driver and vehicle are
licensed, in order to reduce problematic cross-border hiring
(requested by TfL as part of the taxi and PH action plan, TfL,
2016c). Under the current legislation, cross-border hiring creates
challenges for enforcement, as well as undermining the local
licensing regime which may have more stringent vehicle and driver
licensing requirements.
115
These calls are supported by unions and the taxi industry.116
In its September 2018 report the Task and Finish Group also agreed
with these proposals and recommended that the Government legislate
to provide that all taxi and PHV journeys should start and/or end within
the area for which the driver, vehicle and operator are licensed.
Consideration should be given to specialist services such as chauffeur
and disability transport services to continue to operate cross-border and
operators should not be restricted from applying for and holding
licences with multiple authorities.
118
It also cautioned that the success of a law and would depend on
“careful further work, to reduce the risk of causing damage legitimate
business models and passenger choice”.
119 In particular, it warned
against:
The potential negative aspects of the proposed restriction would
be greatest in inner-city areas which have many boundaries.
Without [a] reduction of licensing authorities … and the resulting
larger areas, all parties would be detrimentally affected. With
small geographic areas and more borders, passengers in these
areas may no longer be able to use their favoured PHV operator
even if these were the closest but simply as a consequence of
being the wrong-side one of the many boundaries.
Rationalising the number of licensing areas in these locations
would have benefits in its own right, but would also significantly
reduce the negative impacts of a start/end point restriction.120
8.3 Accessibility
There is no national requirement to make a proportion of taxi or PHV
fleets accessible. This is a matter for individual local licensing authorities.
Individual councils can – and do – require all or a proportion of vehicles
licensed by that authority to be accessible. For example, since 1 January
2000 every taxi operating in London has been required to take
wheelchairs and all taxis operating in Edinburgh have been required to
be wheelchair accessible since 1 January 1997. In 2017 62% of all
licensing authorities in England required wheelchair accessible vehicles
in all or part of their taxi fleet.121
The latest figures show that in England 58% of all taxis were wheelchair
accessible in 2017. This was the same as in 2015. In comparison 2.2%
of PHVs were wheelchair accessible in 2017, similar to the proportion in
2015.122 There is a significant difference in the availability of accessible
vehicles between London and other metropolitan areas on the one hand
and the rest of the country on the other:
• In England outside London, metropolitan areas had 83%
wheelchair accessible taxis;
• in other urban areas 36% of taxis were wheelchair accessible; and
• in rural areas only 15% of taxis were wheelchair accessible.
123
However, questions of accessibility are not only limited to vehicles, but
also relate to issues such as taking bookings, ensuring drivers are properly trained and treat disabled people equally, carrying guide dogs
and not making extra charges.
Legislation
The consolidated legislative framework on transport and disability is set
out in Part 12 of the Equality Act 2010.
124 The 2010 Act made some
fundamental changes to the service that disabled passengers can expect
from taxi and PHV drivers. There was a long delay by successive
governments about bringing some of these provisions (which date back
to earlier legislation) into force.125
Finally, in April 2017 the Government brought into force sections 165
and 167 of the 2010 Act (via the Equality Act 2010 (Commencement
No. 12) Order 2017 (SI 2017/107)). Together, these sections provide
that drivers of ‘designated’ taxis and PHVs, which are hired by or for a
disabled person who is in a wheelchair, or by another person who
wishes to be accompanied by a disabled person who is in a wheelchair,
must:
• carry the passenger while in the wheelchair;
• not to make any additional charge for doing so;
• if the passenger chooses to sit in a passenger seat, to carry the
wheelchair;
• to take such steps as are necessary to ensure that the passenger is
carried in safety and reasonable comfort; and
• to give the passenger such mobility assistance as is reasonably
required.
A driver of a designated taxi or PHV commits an offence by failing to
comply with a duty imposed on the driver by this legislation and is liable
on summary conviction to a fine not exceeding £1,000.
The Government issued guidance on the implementation of sections
165 and 167 in February 2017. The guidance is intended to help
licensing authorities to:
• maintain lists of vehicles designated as wheelchair accessible;
• handle applications from drivers who are medically unfit to
perform the duties required of them; and
• enforce the requirements.
126
Under sections 168-171 of the 2010 Act taxis and PHVs have a duty to
accept bookings for and to carry passengers with assistance dogs, and
not make an extra charge for doing so.127 However, research published
by Guide Dogs for the Blind in May 2016 found that prosecutions are
rare and fines are low, with some licensing authorities reporting fines as low as £50 to £100.128 They are currently running a campaign based on
survey findings that 42% of assistance dog owners were turned away
by a taxi or minicab in the last year because of their dog.129
Finally, section 29 of the 2010 Act prohibits discrimination in the
provision of services. Section 29(2)(a) states that a service provider must
not discriminate against a person “as to the terms on which” a service is
provided. Discrimination may be either direct or indirect. Direct
discrimination is defined in section 13 as a person treating another less
favourably than others “because of” a protected characteristic.
Disability is a protected characteristic (section 6).130
Future changes?
As indicated above, in May 2014 the Law Commission published the
outcome of its review into taxi and PHV licensing law. One of the areas
it looked at was accessibility. It made the following recommendations:
• taxi and private hire drivers be required to undergo disability
awareness training of a standard set by the Secretary of State;
• the Secretary of State require information on how to complain
about taxi and PHV services to be displayed in taxi and PHVs;
• local licensing authorities should display complaint information
in offices, libraries and on websites;
• licensing authorities conduct an accessibility review at three
year intervals;
• the Secretary of State require holders of taxi and private hire
driver licences and dispatcher licences to comply with the
Equality Act 2010 as a condition of the licence [to make
enforcement easier];
• licensing authorities should reconsider rank design to ensure
compliance with the 2010 Act;
• licensing conditions should provide that information about the
licensing authority and local operators should be provided in
alternative formats, as well as information about the types of
vehicle available in their area; and
• the Secretary of State should have the power to impose
accessibility requirements on large operator/dispatchers. In
particular, the power should permit the setting of quotas of
accessible vehicles which must be available to such dispatchers.131
The July 2018 Inclusive Transport Strategy stated that by end of 2019
the DfT would:
… publish for consultation revised best practice guidance to
support local licensing authorities (LLAs) to use their existing
powers more effectively. In particular we will recommend that
authorities require taxi and private hire vehicle (PHV) drivers to
complete disability awareness and equality training, make it
simple to report discrimination and take robust action against drivers alleged to have discriminated against disabled passengers
[… and]
Take steps to understand why taxi and PHV drivers continue to
refuse to transport assistance dogs […] We will undertake
research to identify why the risk of fines and the loss of a driver’s
licence appear insufficient in some circumstances to prevent them
from discriminating against assistance dog owners. We will use
evidence from this work to support any further action that we
may take in this area to ensure that assistance dog owners are
able to travel by taxi and PHV free from the fear of
discrimination.132
It also said that by autumn 2018 it would write to all local licensing
authorities “stressing the importance of supporting an inclusive taxi and
PHV fleet” and asking those authorities who had not already done so to
publish lists of vehicles designated as wheelchair accessible under
section 167 of the 2010 Act.
133
In its September 2018 report the Task and Finish Group recommended
that:
All licensing authorities should use their existing powers to require
that their taxi and PHV drivers undergo disability equality and
awareness and equality training. This should ultimately be
mandated as part of national minimum standards…
Licensing authorities that have low levels of wheelchair accessible
vehicles (WAVs) in their taxi and PHV fleet should ascertain if
there is unmet demand for these vehicles. In areas with unmet
demand licensing authorities should consider how existing powers
could be used to address this, including making it mandatory to
have a minimum number of their fleet that are WAVs. As a matter
of urgency, the Government’s Best Practice Guidance should be
revised to make appropriate recommendations to support this
objective …
Licensing authorities which have not already done so should set
up lists of wheelchair accessible vehicles (WAVs) in compliance
with s.167 of the Equality Act 2010, to ensure that passengers
receive the protections which this provides … [and]
Licensing authorities should use their existing enforcement powers
to take strong action where disability access refusals are reported,
to deter future cases. They should also ensure their systems and
processes make it as easy as possible to report disability access
refusals.
134
8.4 Passenger safety
In recent years, as the numbers of PHVs on the roads, particularly in
London, have increased so sharply (see section 8.1, above) there have
been growing concerns about the robustness of driver checks and the
attendant safety of passengers, particularly those who are vulnerable,
travelling alone and late at night.
Comprehensive data regarding the number of sexual assaults (or other
crimes) committed by taxi/PHV drivers are not available. Some
information is in the public domain through Freedom of Information
requests to police forces, but this is neither comprehensive nor
consistent.135 TfL publishes data for London dating back to 2002, listing
all sexual offences recorded by police where the perpetrator was
reported, or thought to be a taxi/PHV driver. In many cases no suspect
was identified, so verification of their status is not possible. This shows
that the overall level of offences has fallen from 189 to 164, though the
2016 figure represents an increase from 136 in 2015.136
As stated in sections 4 and 5, above, licensing authorities have to satisfy
themselves that prospective drivers of taxis and PHVs are ‘fit and proper’
persons to drive a vehicle. This usually involves a criminal records check.
For many years now, the Department for Transport and the Home
Office have issued guidance to licensing authorities outside London on
licensing taxi and PHV drivers with criminal records.
137 The most recent
guidance, issued in March 2010, states:
In considering an individual’s criminal record, local licensing
authorities will want to consider each case on its merits, but they
should take a particularly cautious view of any offences involving
violence, and especially sexual attack. In order to achieve
consistency, and thus avoid the risk of successful legal challenge,
local authorities will doubtless want to have a clear policy for the
consideration of criminal records, for example the number of
years they will require to have elapsed since the commission of
particular kinds of offences before they will grant a licence.138
In 2017 the Government took powers to issue new statutory guidance
on the protection of children and vulnerable adults with regards to taxi
and PHV services.139 The factsheet accompanying this provision,
published with the Bill, stated that:
In recent years there have been a series of child sexual exploitation
cases linked closely to taxi and private hire vehicle licensing.
The most notable of these has been in Rotherham, where
widespread abuse took place between 1997 and 2013.
Independent inquiries were conducted and published … Both the
Jay and Casey reports made specific references to the role of the
taxi and PHV industry and linked them to the exploitation that had
taken place […]
The Jay and Casey reports demonstrate that not all councils apply
the same high standards when undertaking their taxi and PHV
licensing functions. To address this, [the Bill] confers a power on
the Secretary of State for Transport to issue statutory guidance to
local authorities. Such guidance will relate to how the licensing
authorities may best exercise their functions so as to protect
children and vulnerable adults. Licensing authorities will be under
a duty to have regard to the guidance. The Department for
Transport will continue to issue non-statutory guidance covering other aspects of local licensing authorities’ taxi and PHV licensing
functions.140
The Government has stated that it intends to consult on this guidance
but there is no anticipated date as yet for doing so.141 In its September
2018 report the Task and Finish Group to press ahead with this “as a
matter of urgency”.142
There have been a number of press stories about drivers given licences
to work as either taxi or PHV drivers despite being denied a licence in
another authorities due to their – sometimes serious – criminal
convictions.143 There have also been reports of GPs allegedly accepting
cash payments from would-be PHV drivers to give the medical clearance
needed by drivers to obtain a PHV licence.
144
In its May 2014 report the Law Commission proposed national
minimum licensing standards, including for drivers. They argued that
“Consumers have the right to expect a minimum level of safety
wherever they are and whichever kind of vehicle they travel in”.145 It
went on:
Currently, the extent to which previous convictions disqualify a
licence-holder is left to individual licensing authorities to
determine. A significant number of licensing officers told us that
they would like to see a more consistent, national approach to
convictions policy. Past criminality is plainly a matter that should
be taken into account in determining suitability to be a taxi or
private hire driver, and something that we expect will be covered
by national standards if our recommendations are followed. Their
formulation will need to take into account Article 8 of the
European Convention on Human Rights, which has recently given
rise to a successful challenge in the Court of Appeal to some
aspects of the current approach to revealing old and/or minor
convictions and cautions. National standards on the appropriate
approach to criminal records in taxi and private hire licensing will
assist with compliance with the complex and changing law in this
area and will be an important safety measure.
We also suggest that the Secretary of State make it a condition of
a licence to inform the licensing authority where a licensee is
arrested for, charged with or convicted of a disqualifying
offence.146
On the last point, the draft Bill appended to the Commission’s report
included a provision for a register of licences (clause 23). This could
enable local licensing authorities to check the credentials of drivers
licensed by other authorities. The APPG on taxis also recommended in its July 2017 report that the
Government establish a national database of registered taxi and PHV
drivers and operators in conjunction with the DVLA and police.147
In its September 2018 report the Task and Finish Group considered
passenger safety issues at length (see chapter 4) and recommended, like
the Law Commission before it, national minimum standards. It argued
that until such a time as the Government legislated for these, local
licensing authorities “should work collectively to increase
consistency”.
148 It recommended fitting all vehicles with CCTV and
helping small businesses with the costs of this; better in-cab driver
identification; better background checks and information sharing –
including enhanced DBS and barred lists checks for all drivers; standard
‘tariffs’ for specific offences and ability to be licensed; and a
“mandatory national database of all licensed taxi and PHV drivers,
vehicles and operators”.
149
The group also recommended better training and engagement,
specifically that all drivers be required to undertake safeguarding/child
sexual abuse and exploitation awareness training including “the positive
role that taxi/PHV drivers can play in spotting and reporting signs of
abuse and neglect of vulnerable passengers”, and that eventually this
requirement be part of national minimum standards.150
Licensing of Taxis and Private Hire Vehicles
(Safeguarding and Road Safety) Bill 2017-19
In July 2017 Labour MP and member of the Transport Select Committee
Daniel Zeichner brought forward a Private Member’s Bill about the
exercise of taxi and PHV licensing functions in relation to persons about
whom there are safeguarding or road safety concerns.
The Licensing of Taxis and Private Hire Vehicles (Safeguarding and Road
Safety) Bill requires taxi and PHV licensing authorities in England to
share information with other licensing authorities to prevent unsuitable
people being licensed as a taxi or PHV driver. The Bill is in two parts; the
explanatory notes explain:
The first [part] requires licensing authorities in England to input
into a central database instances where the authority has
suspended, revoked, refused to grant or refused to renew a taxi
or PHV driver’s licence because of certain safeguarding or road
safety concerns relating to that driver. Other licensing authorities
in England must then have regard to that information when
considering whether to grant or renew a taxi or PHV driver’s
licence. The second part of the Bill requires licensing authorities in
England to report certain safeguarding or road safety concerns
about a taxi or PHV driver working in their area to the licensing
authority in England, Wales or Scotland that granted a licence to
that driver. The Bill then requires licensing authorities in England to have regard to any such reports received and to consider
whether the relevant taxi or PHV driver should remain licensed.151
As the impact assessment to the Bill states, the Bill is designed to tackle
the particular problem of licensing authorities not knowing drivers’
licensing histories with other authorities, which has led to inconsistency
in the assessment and issuing of taxi and PHV driver licensing and the
phenomenon of unsuitable persons being granted taxi or PHV driver
licences by way of ‘shopping around’ for licences (i.e. when they have
been refused a licence, or had one revoked by one licensing authority
but apply to other authorities with less stringent policies to obtain a
licence).152
Debate began on the Commons Second Reading of the Bill on Friday 2
February 2018. However, at the end of the sitting the debate was still in
progress and a decision on whether to give the bill its Second Reading
could not be taken.153 The Bill is down to resume on 23 November, but
it is far down the list and therefore unlikely to proceed.
8.5 Plying for hire
The term ‘plying for hire’ is used essentially to distinguish between the
regulatory requirements which apply to taxis (which can be hired in the
street), and those which apply to PHVs (which must be pre-booked).154
The exact definition of the term and what constitutes ‘plying for hire’ is
not always clear. The Law Commission explained:
Their exclusive right to ply for hire is thus made the defining
characteristic of taxis under the current law, although the term is
not defined in the legislation. Picking up passengers at ranks and
in response to hailing is generally understood to be at the core of
plying for hire, but these activities do not feature in the
legislation. Instead, the case law refers to factors such as the
“exhibition” of the vehicle, which may indicate plying for hire, its
availability to the general public and the “immediacy” of its
availability. Parking a vehicle in a public place may or may not
amount to plying for hire, depending on an assessment of these
factors. The case law is often inconsistent and unclear.
Technology has highlighted the indeterminacy of some of these
factors by adding new ways for consumers to engage services.
Internet bookings for example can be virtually immediate,
suggesting taxi-like behaviour, and yet have all the characteristics
of a pre-booking, making them compliant with private hire
requirements.
Plying for hire without a taxi licence is a criminal offence and is
therefore critical in defining what private hire vehicles are not
allowed to do.155
With that in mind, the Commission sought views on whether the
definition of ‘plying for hire’ should be put on a statutory footing. This
received near-unanimous support from the industry.156 However, in its
final report the Commission concluded that a statutory definition
“would not be a practical improvement on the current position”. It
came to this decision based on advice “from an expert panel composed
of distinguished licensing lawyers that we set up specifically for the
purpose of discussing reform of ‘plying for hire’”. The main reason for
this conclusion was that:
… whether a vehicle is plying for hire in particular circumstances
is, as the courts have noted, a matter of fact and degree. No
statutory list of factors could be sufficiently determinative to give
clear guidance, leaving many of the current grey areas
unresolved.157
As to the question of whether smartphone apps can act as digital
‘plying for hire’ in some circumstances, it said:
We agree with the point made by consultees that an application
that alerts the user to a nearby or approaching vehicle, using
Bluetooth push notifications for example, offering the vehicle for
hire, is comparable to manual hailing. Indeed, depending how the
notifications worked, and whether the customer had consented to
receiving such notifications in advance, this might amount to
unlawful touting, an offence which is preserved under our
reforms. Under the current law, such behaviour would probably
amount to plying for hire, and be restricted to local taxis.158
Ultimately, the Commission decided to focus upon the precondition for
lawful transport of a passenger in a PHV – namely pre-booking – and
upon improving its enforceability through record-keeping obligations
imposed on private hire operators. It said:
… although we abandon the concept of plying for hire, a lawful
private hire journey must involve a request to fulfil the journey by
a licensed dispatcher (and not directly from the customer).
Further, it must comply with statutory pre-booking requirements.
This means that the licensed dispatcher must make appropriate
records before the journey begins (including of the estimated
price of the journey and the identity of the hirer, in such form as
the Secretary of State may prescribe). Moreover, private hire
drivers are prohibited from accepting a hiring “there and then”.159
In light of this, the Commission recommended:
• the offences relating to plying for hire should be abolished and
replaced with a new scheme of offences, resting on the principal
prohibition of carrying passengers for hire without a licence,
alongside a new offence making it unlawful for anyone other than a local taxi driver to accept a journey starting ‘there and
then’; and
• a statutory definition of ‘pre-booking’ in order to create a clear
distinction between the work of a taxi in its licensing area and the
work of a PHV.
160
Despite the Law Commission’s conclusion that statutorily defining
‘plying for hire’ could prove difficult, there have been subsequent calls
for this. For example, in its July 2017 report the APPG on taxis argued
that the Government should “legislate to provide a legally enforceable
statutory definition of plying for hire”.161 In support of this the report
quoted the Mayor of London, Sadiq Khan, who “has committed to
lobbying Government for a statutory definition of plying for hire and
pre-booked services as currently “plying for hire is difficult to prove and
requires significant enforcement resources””.162
In its September 2018 report the Task and Finish Group stated that “if
we are to be supportive of the two-tier system, it is inevitable that we
must be able to effectively distinguish those two tiers” and argued that
defining ‘plying for hire’ “is essential to that”.
163 In light of this the
group recommended that the Government introduce a statutory
definition of both ‘plying for hire’ and ‘pre-booked’ and that the
definition:
… include reviewing the use of technology and vehicle ‘clustering’
as well as ensuring taxis retain the sole right to be hailed on
streets or at ranks. Government should convene a panel of
regulatory experts to explore and draft the definition.164
8.6 Taximeters
‘Taximeters’ are in-vehicle devices that calculate a fare based on
distance travelled and time waiting. Outside London, PHVs are not
required to have taximeters, but have the option of installing one, while
in London PHVs are prohibited from being equipped with a taximeter.165
Like plying for hire, taximeters are an increasingly controversial area,
particularly in London (see below). In its May 2014 report the Law
Commission looked at the use of taximeters in PHVs. It concluded that
the use of taximeters in PHVs should not be banned, “as we consider
that metered pricing may be useful for estimates; and we have heard
evidence that consumers may prefer the use of a taximeter where they
are not in a position to judge whether the price quoted is fair”
Uber in London and the 2015 court case
One of the most controversial aspect of those PHV operators, like Uber,
which rely on smartphone apps for their operation, has been the
question of whether their drivers’ use of those smartphones constitutes
a ‘taximeter’ and is therefore illegal. Following much delay, Transport
for London (TfL) secured a legal declaration on this in October 2015.167
TfL sought a declaration that Uber’s PHVs were not equipped with a
taximeter in contravention of section 11 of the Private Hire Vehicles
(London) Act 1998. The Administrative Court, in granting a declaration,
held that Uber’s PHVs were not equipped with a taximeter as defined by
section 11(3) of the 1998 Act. The driver’s smartphone with a driver’s
app was not a device for calculating fare by itself or in conjunction with
a server and, even if it was, the vehicle was not equipped with it.168
TfL said that “with legal certainty established over taximeters, we will
continue to work hard with all of our stakeholders to deliver taxi and
private hire services which meet the needs of modern London”.
169 Uber
welcomed the decision, calling it “a victory for common sense” and
meant that the company would not “have to make any unnecessary
changes to the way Uber works today. People will still be able to push a
button and book a ride—without being forced to do something like
having to type in their destination every time”.
170
The London Taxi Drivers’ Association said “The law is an ass” and that it
was “such a ludicrous decision that our lawyers have already launched
an appeal … where hopefully, we can find a judge with a common
sense solution to a very simplistic question. Does the Uber smartphone
calculate the fare by a combination of time and distance? There can be
only one answer, and any judgement that declares otherwise is flawed
and wrong”.171
8.7 Disruptive technology
Over the past few years much has been said about how Uber and other
technology platforms have ‘disrupted’ traditional taxi and PHV markets.
This is a particular issue in London.172
In its July 2016 report into the digital economy the Commons Business,
Innovation and Skills Select Committee described the impact of
‘disruptive’ technologies as follows:
Disruptive technologies ‘disrupt’ the accepted means of delivering
a service, which in turn bring tension between disruptors and
those businesses being disrupted … Uber, described as “a
software company, a smartphone app, and licensed as a private
hire operator”, disrupts the London Hackney carriage model and
the existing private hire operators […] The tension between socalled disruptors and disruptees is keenly felt when it comes to
regulation. Often digital disruptor businesses do not have to
follow the same regulation and compliance as incumbent
businesses that are being disrupted, which can be seen as giving
the new disruptor an unfair competitive advantage.173
The Committee said that regulation should be focused on protecting
customers and ensuring that market power is not abused. Further, the
Government should promote productivity, innovation, and customer
choice and protection.174
In its May 2014 report the Law Commission stated that “It has become
common to refer to “electronic hails”, where customers use
smartphone applications to engage a taxi or private hire vehicle”.175 It
described the process as follows:
Some types of application allow the user to book with a specified
provider, inputting their route and receiving a price estimate and
pick up time. Such applications often allow the customer to rate
their experience following the journey. This can be contrasted
with comparison applications such as Kabbee. Someone using this
application would input the details of their journey and be given a
number of quotes from different providers, as well as estimates of
how quickly a vehicle could pick them up. The user can then
access the provider directly through the application, in order to
book. Often users will already know the providers available, and
so be able to form their own judgment as to the quality of service
offered.176
The Commission proceeded to discuss the concerns the industry has
about the blurring of the line between physical and virtual ‘plying for
hire’ (see sections 7.5 and 7.6, above):
The first point to note is that a customer choosing to use a
smartphone application has a choice amongst several providers on
the internet. If the customer were to have an unsatisfactory
experience they may select a different provider the next time. That
is different from hailing a taxi or waiting at a rank, where the
customer exercises no choice in respect of the vehicle they use. In
contrast to traditional hailing, the consumer using the internet has
strong consumer choice.177
In its October 2016 report the IEA said that smartphone-enabled
transport apps “are commonly described as part of the so-called
‘sharing economy’ [… which] involves the reduction of transaction
costs, which in turn enables a greater number of exchanges to take
place. It is about the rise of middlemen – mainly in the form of websites
and mobile applications – whose value-added is to facilitate exchanges”.178 The report argued that there are three main benefits
from the use of this technology:
• It provides searchable and immediate information about options
and prices;
• It outsources trust to assure safety and quality without effort by
the users (i.e. a key part of their value proposition is the ability to
rate users on both sides of the transaction); and
• It consummates the transaction in a way that does not require
enforcement on the part of the user (i.e. use of electronic
payments and the tracking of routes means that transactions are
automatically enforced).179
Although Uber is the most well-known app of this sort there are other
examples around the world. In a May 2017 paper for The Political
Quarterly, Geoffrey Dudley, David Banister, and Tim Schwanen
explained:
… the type of service provided by Uber is far from unique and,
indeed, in San Francisco itself, rival companies Lyft and Sidecar
already provided app based services similar to those introduced by
Uber in 2010. Lyft remains a major competitor in the United
States, while Uber has faced major regional competition from
such companies as Grab in South-East Asia, Gett in Israel, and Ola
in India. In China, competition has been particularly fierce. Uber
poured huge resources into this market, but in 2016 was
compelled to merge with its chief rival, Didi Chuxing.180
Regarding Uber’s impact in London, the paper argued that
A consistent advantage for Uber is that having achieved a certain
critical mass in terms of cars and drivers on the streets, restricting
their growth becomes politically sensitive as it may be seen to be
frustrating public demand.181
It concluded:
In London, Uber was able to launch a politically sophisticated
campaign in winning public and business support when it was
threatened with tighter regulation. Its fares might be extensively
subsidised, but its success was based on an operation
undoubtedly popular with the public, and with modern ‘technooptimism’ at its heart. Nevertheless, on a wider scale, the
company appears to have accepted that it needs political allies if it
is to continue its rate of growth.182
A further February 2017 paper for the University of the West of England
also looked at the impact of digital innovations on the London transport
network. It found that:
… the digital innovations introduced by Uber disrupted the
market and changed the nature of how people interact with the
wider transportation system. Uber has made it easier for individuals to move around the city, filling a gap in the existing
transportation system. Uber have rapidly achieved a leading
position in the private hire taxi service across the city. Regulation
for Black Cabs needs to change if they are to compete and remain
a service in the broader customer market.183
As set out in section 5.3, above, Uber has now been refused a renewal
of its London licence. It remains to be seen if accommodation with TfL
and/or a successful appeal in court will reverse this decision.
Competitiveness of the taxi trade
In this new environment there is ongoing debate about how the taxi
trade can remain competitive. Some have argued that the taxi trade is
unwilling to modernise to compete in this new world, but the APPG on
taxis argued in its July 2017 report that this was demonstrably untrue:
It has been suggested that taxi drivers are being driven out of the
market by the dominance of app-based PHVs, partly due to an
unwillingness from the trade to adapt to new technologies. This
inquiry sought to assess whether this is the case, and how the
trade could safeguard itself from the emergence of new
technologies and competition.
Oral and written evidence received as part of this inquiry has
shown that taxi drivers are more than willing to adapt and use
new technologies. For instance, Chairman of the taxi app Gett,
Geoffrey Riesel, highlighted that many taxis have actually been
taking credit card payments since as early as 1989/90 – around 17
years before TfL made it mandatory. There are also two apps
available for black cab drivers, mytaxi (previously known as Hailo)
and Gett. Andrew Pinnington, CEO of mytaxi which runs the
black cab app mytaxi, highlighted that Hailo was around before
Uber, and that two-thirds of the trade use apps.
184
The report suggested that the main challenge for the taxi trade,
particularly in London, is uncompetitive fares – which are set by
Transport for London. It recommended work to address this problem:
As it currently stands, the fare structure, set by TfL, is not fit for
purpose and is reducing the competiveness of the taxi trade. Fares
need to reflect the actual costs of running a black cab, and we are
keen to ensure that any reduction in fares does not lead to a race
to the bottom in terms of standards. However, fares also need to
consider other factors including varying levels of demand and
competitive and customer feedback. Purely relying on a
“costplus” model, which is the actual cost of the product plus a
suggested price increase, will not allow the taxi trade to stay
competitive.
We recognise that TfL are already taking steps to review fixed
fares, but we recommend that there is greater communication
between TfL, representatives from the taxi apps, and the trade to
ensure that the taxi fare structure remains competitive with prices
offered by PHVs, particularly in the evening and at night.
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