Issues relating to the licensing of taxis and private hire vehicles

Written evidence from James Button (TPH 53)

I am a Solicitor specialising in Taxi Licensing, and I am the author of "Button on Taxis – Licensing Law and Practice" (3rd Edition, Bloomsbury Professional 2009).

You have asked for information on issues relating to the licensing of taxis and private hire vehicles, in particular, in cross-border hire problems caused by private hire vehicles picking up passengers on a large scale outside of the area in which they are licensed, and other issues relating to taxi and private hire vehicles, including matters concerning passenger safety.

Cross-border hire problems

A private hire vehicle can be booked from anywhere, to pick passengers up anywhere, and drop them somewhere else. At no time does the vehicle have to be located within the district by whom it has been licensed. The journey with passengers does not have to start in, pass through or end in the licensed district.

Generally, this freedom is used by operators in neighbouring districts. It enables a business with a good reputation to provide services proximate to, but outside, its own licensed district.

However, there are occasions when the vehicle us used farther afield, not in neighbouring districts to its "home" (i.e. licensed) district, but where there are a number of intervening districts.

It is difficult to tell whether this is a problem, because the answer to that question will hinge on what is meant by "problem". Is the local licensed trade under threat from vehicles, drivers and operators from neighbouring authorities where standards are lower, or licence fees cheaper? Or is the problem one of price for journeys and quality of service?

In other words, is this a regulatory problem leading to public safety issues, or is it a competition issue which causes concern due to threats to businesses?

Other issues relating to taxi and private hire vehicles, including matters concerning passenger safety

Remote pre-booked hackney carriage hirings

It is clear from case law (most recently Stockton v Fidler 2010, but well established before that) that a hackney carriage can be used for pre-booked work, both within and outside the district in which it is licensed. That can be neighbouring districts, thereby enabling a driver to take a pre booked hiring as a "return" journey when the original fare has taken him out of the district, or it can be "remote" districts, some distant away form the district in which the vehicle is licensed. This can lead to significant enforcement problems in relation to the vehicle and driver being used far away form the local authority that licences it.

Vehicle standards and fees

As each local authority can set its own standards for vehicles and set its own licence fees (based on specified areas for cost recovery in sections 53 and 70 of the Local Government (Miscellaneous Provisions) Act 1976) there is widespread variation. With the ability for a private hire vehicle or pre-booked hackney carriage to pick up and set down remote from its district, many licensees are tempted to seek the easiest and/or cheapest district in which to be licensed.

In addition, local authorities can also decide how frequently a vehicle is tested, up to a maximum of 3 set tests per year, although random checks are also possible under s68 of the Local Government (Miscellaneous Provisions) Act 1976. Again, there are wide variations in the number of tests that individual local authorities require.

In relation to random tests, as there is no power for local authority officers to stop vehicles on the highway, these are only effective if arranged in conjunction with the police and/or VOSA, thus fundamentally limiting their usefulness.

Local authorities report alarmingly high numbers of failures on spot checks. In some cases over 50% of vehicle inspected have been found to be unsatisfactory, and in many cases unsafe.

Sub-contracting by operators

A licensed private hire operator can sub-contract to another licensed operator, but only within the same district (under the ruling in Shanks v North Tyneside) which can prevent any operator building a business beyond one district council’s boundaries.

Limited hackney carriage numbers

Over 25% of local authorities limit the number of hackney carriages that they will licence, based on the "no significant unmet demand" test (s15 Transport Act 1985 applied to s37 Town Police Clauses Act 1847). This leads to a market in licences (with licences commanding premiums of over £50,000 in some cases), and prevents entry to the market for those without significant capital. The process of limitation also involves enormous amounts of local authority time (both members and officers) and increases costs to the hackney carriage trade, without any demonstrable benefit to the travelling public..

Driver standards

The test for a potential driver (apart from the necessity to hold a full driving licence for a year at the date of application) is that they are a "fit and proper person" to be granted either a hackney carriage or private hire drivers licence (s51 Local Government (Miscellaneous Provisions) Act 1976 in respect of private hire drivers and s59 Local Government (Miscellaneous Provisions) Act 1976 in respect of hackney carriage drivers). Again, this is a highly variable test, and is applied in many different ways by local authorities. This can result in a person being refused a licence by one authority, but being granted it by another.

In addition, there is a wide acceptance of low to moderate levels of criminality on the part of persons considered "fit and proper" to be hackney carriage and private hire drivers, which can lead to significant risks to public safety, allied to the potential loss in confidence by the public of hackney carriages and private hire vehicles as a safe from of transport.

The Department for Transport Guidance, allied to the (dormant) Safeguarding Vulnerable Adults/Independent Safeguarding Authority requirements suggest that most hackney carriage and private hire drivers should only be subjected to a Standard Criminal Records Bureau (CRB) check, whereas most local authorities feel that an enhanced CRB check is vital to maintain public safety. Hackney carriages and private hire vehicles are used by every section of society, and that includes some very vulnerable people (albeit not necessarily falling within the definitions contained in the Safeguarding Vulnerable Adults Act), including, young children, teenagers, elderly people, disabled people, people under the influence of drink, dugs or both, tourists and foreigners, all of whom place their trust in the driver.

Hackney carriages and private hire vehicles

The "two tier" system of licensing in England and Wales, with hackney carriages regulated in one way and private hire vehicles regulated in another, with overlapping features but also some very important distinctions, is generally not well understood by the public. It leads to rivalry between the two trades, and potential disaster for the public who, probably unwittingly, take a non-pre-booked private hire vehicle which may well not be insured.

Conclusions

The existing law is not fit for purpose. The Town Police Clauses Act 1847 predates motor vehicles and telephones; the Local Government (Miscellaneous Provisions) Act 1976 predates mobile telephones and the internet. Modern systems are not covered; business finds it constrictive, preventing business expansion; the public (the users) are confused; and ultimately, the purpose of licensing of hackney carriages and private hire vehicles, which is to protect public safety, can be thwarted.

I trust that this is of assistance, but if I can provide the Committee with any further information, I would be delighted to do so.

December 2010