Taxis and private hire vehicles – regulation
Status: The consultation for this project is due to open in April 2012
We are reviewing the existing framework of taxi and private hire vehicle regulation with a view to preparing proposals for consultation.
Taxis and private hire vehicles (PHVs) are an important part of local transport. They operate in highly regulated markets where safety and quality control are paramount. Licensing covers key areas such as the quality of services, the fitness of drivers, fare regulation and restrictions on the number of licenses issued.
The current law on taxis and PHVs has been criticised for being complex and outdated.
One problem is the multiplicity of legislation. Taxis, which can “ply for hire” so customers can stop them in the street, have different rules to PHVs which can only be pre-booked. In turn each of the taxi and PHV trades is regulated by multiple statutes. There are also different legal systems along geographical lines distinguishing Plymouth, London and the rest of England and Wales. Whereas some distinctions are clearly justified others are less clearly so.
Some of the legislation, particularly relating to taxis, is archaic. The key statutes date back to Victorian times and refer to “hackney carriages” when taxis were literally horse-drawn vehicles. Case law and guidance are indispensable in interpreting the law. This also makes the legislation less able to reflect more modern technology like the telephone, internet and GPS technology.
The project examines the legal framework relating to taxis and PHVs with a view to making it simpler and more modern. We aim to publish proposals for reform in April 2012. This will be followed by a three month consultation period where we invite the public to respond to our proposals. We plan to publish a final report with our recommendations and draft bill by late 2013.
TAXIS AND PRIVATE HIRE VEHICLES – REGULATION
2.72 Taxi-cabs (“hackney carriages”) are a highly regulated market, and have been since Victorian times (or earlier – some controls were first imposed under the Stuarts). Private hire vehicles have been regulated since the 1970s. There are distinct legal systems for London, Plymouth and the rest of England and Wales; and different systems for taxi-cabs and private hire vehicles. Outside London,
local authorities are the licensing authorities for both taxi-cabs and private hire vehicles. In London, licensing is now the responsibility of Transport for London.
Licensing authorities regulate the quantity of taxi-cabs and the fares they can charge, and, for both taxi-cabs and private hire vehicles, the quality of services, including the safety of vehicles and the fitness of drivers. Drivers and vehicles must be licensed, and, in respect of private hire vehicles, there must also be a licensed operator.
2.73 The first level of reform would be to reduce the sheer bulk, complexity and inconsistency of the regulatory systems. Central concepts like “plying for hire” have caused considerable problems in the past. There are pointless geographical inconsistencies on such matters as whether a taxi-cab driver needs a separate private hire licence, and whether the vehicle can be used for leisure purposes by
its owner/driver. Secondly, there is a need to modernise to reflect technological change – private hire licensing, for instance, is posited on a geographically fixed operator with premises where bookings are made. Finally, the fundamental features of the regulatory system are in need of reconsideration – the separate systems for taxi-cabs and private hire vehicles, the identity of the licensing authorities, the number and nature of licenses and whether all forms of regulation are still necessary.
2.74 This project engages economic and regulatory theory. It will be fundamentally deregulatory, in the sense that it will seek to question the necessity for the various strands of the current regulatory regime, and seek to reformulate those that are necessary in the light of modern understandings of the most efficient and efficacious forms of regulation.
2.75 The taxi and private hire vehicle market had an annual turnover of above £2.2 billion in 2003. It is likely that a modernised and simplified system of licensing will reduce the costs of the licensing system to both local authorities and market participants themselves. However, the realisation of these potential savings would depend on decisions to be taken on the key regulation reform issues which will constitute the substance of the project.
2.76 We expect the project to take three years, with a consultation period in the second half of 2012.
2.77 The project will require close working with the Welsh Government, which is responsible for local government generally and for transport facilities.