Taxi Globe 735 Archive – May 2014



By the end of May, the Law commission should have delivered its final recommendations and draft Bill. We at the RMT London Taxi Branch will be very surprised if the recommendations will be in favour of plying for hire being defined in statute as originally proposed by the Law Commission under Provisional Proposal 15. We take this opportunity to remind the readers of what the Government and TfL said in response to the consultation process on this matter.

The Government agrees with the Law Commission’s proposal that regulation should continue to distinguish between taxis and private hire vehicles, which can only accept pre-booked fares. The Government agrees that London should be included within the scope of reform and that a single regulatory system should be established across the whole country. The Government is clear that the defining characteristic of a taxi is that it takes immediate hirings whereas a PHV must be booked through an operator. We acknowledge that there might be a problem in determining what actually constitutes ‘’safety’’ and in securing agreement as to what the standards should be. We would welcome any thoughts from the Law Commission about dealing with these issues.

It is TfL’s view that the size of the taxi and private hire markets in London clearly demonstrates that there is a demand for both services. Any move to confuse the distinction between the two services would be catastrophic to the London market. If anything, there is a need in London to reinforce the distinction between the two different services. When PHV licensing was introduced, standards were set that would allow as many fit operators, vehicles and drivers to be regulated as quickly as possible, with the view that these standards would be raised over time. TfL is in the process of reviewing the standards which will help tackle issues with poor standards, touting and illegal plying for hire across the capital by licensed PHV drivers and vehicles.

On May 19th 2009 Item 7 of TfL’s Surface Transport Panel paper stated; This paper sets out some broad options for TfL’s role in the development of the private hire vehicle (PHV) industry in London. The paper aims to stimulate a debate on the appropriate positioning for TfL as both a licensing authority and as a broader transport authority for London and will feed into the development of the mayor’s Transport Strategy.
The taxi and private hire trades operate in overlapping markets with significant competition, especially in the corporate account and late-night travel sectors. The primary structural difference is that only licensed London taxis can ply for hire.
Entry into the PHV industry is comparatively easy. All journeys must be booked in advance via an operator centre. The PCO is responsible for regulating London’s PHV services to ensure that they comply with the PHV legislation. Generally, this means that TfL takes a ‘’light touch’’ approach to licensing and regulating PHV services.
The taxi trade is highly regulated extending to fare tariffs, detailed vehicle specifications and a requirement for all licensed taxi drivers to complete the Knowledge. As such, taxi drivers have to commit significant time and capital outlay to enter the trade. The financial returns in the taxi industry need to reflect the relatively high upfront investment and higher operating costs in order to maintain a viable ply-for-hire taxi service.
Any changes to the operating conditions of the PHV industry need to be considered in the context of the impact on the taxi market.

The Hindley report in 1939 stated that plying for hire should be defined, whether or not private hire vehicles were to be licensed. It is a fact that over the course of many decades successive governments have failed the cab trade in establishing a definition. However, we also take the view that the trade failed to lobby and vigorously campaign to establish a definition of plying for hire to be put into primary legislation, when, in 1997 Sir George Young presented a Bill for the licensing of the private hire trade within London.
In 2000 TfL was created along with the TfL board. By mid-2000 TfL had completed private hire licensing along with the creation of satellite offices.

Had plying for hire been defined it begs the question would the trade find themselves in the position they are today? It is paramount therefore, irrespective of the Law Commission’s recommendations and outcomes, that plying for hire is defined in statute in order to achieve the intentions expressed by both central and local government above. Clearly the wording of primary legislation combined with case law determines policy as well as enforcement. Whilst we commend various trade organisations challenging smartphone applications such as Uber, we fail to see with the advances in technology how a two-tier system is truly viable without this. We must therefore campaign for a definition to future proof our trade, it is the bedrock of our existence. Let’s not make the same mistake twice!


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