Taxis and private hire vehicles: the road to reform - Transport Committee Contents

1  Introduction

1. Taxis and private hire vehicles (PHVs) are a vital but often overlooked part of the public transport system. They serve a number of functions in different areas, from getting people home from bars and nightclubs in the early hours of the morning to taking people to and from stations and airports.[1] They are not just services for the affluent and can be essential forms of transport for people who cannot afford to run a car.[2] In some parts of the country, and at some times of day, taxis and private hire vehicles are the only form of public transport available.[3] Nevertheless, taxis and private hire vehicles are not always recognised as a form of public transport, are omitted from many local transport plans, and barely rate a mention in discussions of Government transport policy.

2. We decided to undertake this inquiry in November 2010 after we heard about disputes in different parts of the country involving taxis and private hire vehicles licensed in one district operating in other areas. We asked for evidence on any issues of concern relating to the licensing of taxis and private hire vehicles but the overwhelming majority which we received concerned cross-border hire.[4] This issue was the focus of our two oral evidence sessions on 18 January and 15 March and is the subject of this report. We are grateful for both the oral and written evidence we received.

Taxis and private hire vehicles: a quick guide

3. Taxis—described in legislation as 'hackney carriages'—operate from ranks, usually situated in city and town centres, and can be hailed in the street (known as 'plying for hire'). PHVs—sometimes known as minicabs—must be pre-booked and cannot use taxi ranks. Taxis can accept pre-bookings and effectively operate as PHVs but it is illegal for PHVs to ply for hire. The Department told us that "there are some 75,000 licensed taxis and 150,000 PHVs across some 300 licensing authorities in England and Wales".[5]

4. The legal framework within which taxis and PHVs operate is complex. The two types of service in England and Wales are covered by separate Acts—the Town Police Clauses Act 1847 for taxis (the "1847 Act") and the Local Government (Miscellaneous Provisions) Act 1976 for PHVs and to some extent taxis as well (the "1976 Act")—but there are separate Acts for both services in London[6] and the Plymouth City Council Act applies to PHVs in that city.[7] In this report we concentrate on taxis and PHVs in England and Wales, outside London and Plymouth, although we heard from London witnesses about the situation there.

5. Taxis and PHVs are licensed by district councils and other forms of second tier local authorities. Both require two licences—for the car and the driver—but, in addition, PHV operators must be licensed. Local authorities have considerable discretion in setting licensing conditions. The Department for Transport has published voluntary guidance on licensing best practice and we were told that the department "takes every opportunity to urge licensing authorities to adhere to it".[8] Local authorities are legally obliged to ensure that money raised from licensing taxis and PHVs is spent on their control and supervision;[9] some witnesses questioned whether councils always complied with this.[10]

Cross-border hire: issues raised with us

6. Several forms of the cross-border hire issue were raised with us. The first involved PHV firms licensed in one district operating routinely in another area. Sefton-based PHV firm Delta Taxis operates throughout Merseyside using "a fleet spread out across the whole of our multi-borough zone that can respond to telephone requests quite literally within seconds".[11] Without referring to Delta Taxis directly, Unite the Union's Tommy McIntyre complained about "a particular company" which, although based in Sefton, did 55% of its work in Liverpool. He said "they are not actually paying any money whatsoever towards the licensing regime in Liverpool".[12] Numerous similar examples were provided to us, often involving PHVs licensed by rural authorities operating principally in a near-by town or city.[13] For example, Gavin Sokhi of Skyline Taxis drew attention to the situation in Milton Keynes, where he claimed "drivers from other licensing authorities are being licensed at lesser standards and then working in [the city]".[14]

7. A second issue concerns the activities of the former Berwick District Council (now subsumed into Northumberland County Council) which licensed a number of taxis which were operated as PHVs elsewhere in the UK. The GMB said:

    Anyone could have driven a Berwick taxi and that taxi could have been a modernised death-trap, and nobody would have been able to do a thing about it, as some of these vehicles were permanently working hundreds of miles away from their licensing authority.[15]

David Wilson, the former licensing officer at Berwick, refuted the suggestions that the licensing standards at Berwick were low and that the local authority did not engage in enforcement activity.[16] He said that, in the local authority's view, the legislation did not permit a licence to be refused on the grounds that a taxi was going to be operated as a PHV in another locality.[17] This issue has been subject to litigation and the court has held that a taxi licence should not ordinarily be granted if the taxi is going to be used in this way.[18]

8. We did not hear of any other examples of the "Berwick" problem, but the GMB raised the issue of Adur Council licensing a PHV operator in Brighton. In GMB's view, Adur had "licensing criteria of a lower standard to that in Brighton and Hove" and Adur's decision has enabled a PHV firm to "integrate vehicles into their fleet which are licensed to a lesser standard, drivers who have no knowledge of Brighton and Hove, and/or drivers who can't be bothered to meet the high entry criteria demanded by the local licensing authority".[19] Adur and Worthing Councils said there were legitimate reasons for differences in standards between local authorities and pointed out that the law on whether local authorities could license PHV operators in a different district was a "grey area".[20]

9. Finally, the prohibition on sub-contracting of jobs by PHV firms was raised with us, particularly by Tyneside-based Blue Line Taxis, whose litigation established the current case law in this area.[21] The 1976 Act prohibits PHV operators from transferring work to an operator in a different district but this prohibition does not apply to London PHVs.[22] Blue Line Taxis said:

    If we accept a booking as a North Tyneside Council operator we cannot lawfully request assistance from a Newcastle operator even when it would be entirely in the best interests of our customer for us to do so and despite there being no credible purpose behind the laws which prevents us from doing so. Nor can we transfer a booking from our own North Tyneside office to our Newcastle office.[23]

The Department noted that sub-contracting could be useful in "emergency situations" such as when a car breaks down on an airport pick-up. It described the illegality of sub-contracting as "anomalous" and said it wished to address the issue when PHV legislation was next reviewed.[24]

Is new legislation necessary?

10. The issues raised with us about cross-border hiring, and the increasingly complex pattern of case law on taxi matters, raise questions about the legislation applying to taxis and PHVs and the differences in licensing standards between different local authorities. The National Taxi Association said it did "not believe that there is any pressing need or indeed any at all for a change in legislation" applying to taxis. It drew attention to other elderly pieces of legislation which it argued were generally thought to be working well.[25] This was a minority view. Most other witnesses argued that the legislation applying to both taxis and PHVs was in need of reform.[26]

11. There were numerous suggestions of relatively modest changes to the legislation to clear up specific areas of ambiguity. Unite, for example, proposed a new clause to be added to the 1976 Act which would require PHVs to return to their home district after completing a job in another area. This "simple change", based on Scottish legislation,[27] would put an end to PHVs waiting for jobs outside of their home area.[28] David Wilson sent us a schedule of changes to the 1976 Act which he recommended to address all of the issues relating to cross-border hiring and enforcement raised by local authorities.[29] The Minister suggested that the Berwick issue could be dealt with by establishing a linkage between the licensing district of a taxi driver operating as a PHV and that of the PHV operator for which he or she is working.[30]

12. Other witnesses took the view that the two principal Acts needed to be radically overhauled or replaced altogether. James Button, the author of a textbook on taxi law, said:

    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.[31]

Liverpool City Council explained how the use of GPS technology by PHV operators enabled them to "control hundreds, even thousands, of vehicles efficiently by identifying a vehicle which is near to a booking request and dispatching that vehicle via a computer terminal located in each vehicle".[32] The National Private Hire Association made a similar point about how modern technology had outpaced the terms of the legislation and argued that it did not want "to spend the next 20 or 30 years wasting time and costs in the Administrative Court trying to make sense" of the 1976 Act.[33] Similar sentiments have been expressed by judges who have heard cases brought under the 1976 Act in particular.[34]

13. The Minister, Norman Baker MP, conceded that taxi legislation was "complicated", "archaic" and had "been built on, higgledy-piggledy, over the years".[35] He also drew our attention to another flaw in the 1976 Act, following a finding of the district auditor in respect of Guildford Borough Council that fees for drivers' and operators' licences cannot legally cover enforcement activity.[36] Mr Baker told us that he had asked the Law Commission to consider looking at the legislation and that, if this suggestion was accepted, the Commission might report back "with an idea of what we might sensibly do" within 12 to 18 months.[37]

14. In our view, the case for a thorough overhaul of the legislation relating to taxis and private hire vehicles is irresistible. The legislation relating to taxis is hopelessly out of date, with its references to horse-drawn vehicles, "stage coaches" and the regulation of the "placing of cheek strings to the carriages".[38] Both principal Acts take no account of modern developments, such as the widespread use of mobile telephones and the internet, which have transformed the interaction between customers and operators and eroded the traditional distinction between taxis and private hire vehicles. The proliferation of case law to resolve ambiguities in the legislation demands Government attention.

15. It remains to be seen whether the Law Commission will wish to take up the Government's suggestion that it study taxi and PHV legislation. However, we are concerned that in referring the issue to the Commission the Government has not properly appreciated the pressing need to reform legislation which is proving increasingly contentious and hard to implement effectively. Nor are we persuaded that the Commission is the right body to look at the law in an area where the policy context is so sensitive. As our inquiry has shown, there are plenty of ideas circulating for reforming the legislation and numerous suggestions of how taxis and private hire vehicles should be organised. We recommend that, instead of referring reform of taxi and PHV legislation to the Law Commission, the Government should engage with the trade, local authorities and users about the objectives of future legislation on taxis and private hire vehicles and commit to overhaul that legislation during the course of this Parliament. Once these objectives are decided, the detailed work to frame legislation and guide it through Parliament should begin. This need not involve primary legislation: we consider that the swifter legislative reform order procedure could be used in this case.

1   Ev w57-60, 81-82. Back

2   Ev w71 paragraph 3.4 and 64 paragraph 3.1. Back

3   For example Q106. Back

4   For other issues, particularly to do with London and the Equality Act 2010 see for example Ev w17-20, 38-39, 46-53, 60-63 and 67-70. Back

5   Ev 38, paragraph 8. Back

6   The Metropolitan Public Carriage Act 1869 for taxis and the Private Hire Vehicles (London) Act 1998. Back

7   For Plymouth see Ev w41-43. Back

8   Ev 39, paragraph 15. Back

9   Section 70, 1976 Act. Back

10   For example Q10 and Ev 44-45. Back

11   Ev 42. Back

12   Q42. Back

13   For example Ev w3-6, 26-29, 31, 35, 39-41, 54-57, 78-79, 82-84, 87-89. Back

14   Q16. Back

15   Ev 51, paragraph 2.1. Also see Ev w20-22, 30-31, 32-33. Back

16   Q69 and see Ev 69-71. Back

17   Q70. Back

18   Ev 67 paragraph 3.3. The relevant case is Stockton-on-Tees Borough Council v Fidler [2010] EWHC 2430 (Admin). Back

19   Ev 52, paragraphs 3.3-34 and see Q6. Back

20   Ev w88. Back

21   Ev 58, paragraph 4. The case is Shanks vNorth Tyneside Borough Council [2010] EWHC Admin 533. Back

22   Ev 39-40, paragraphs 29 and 31. Back

23   Ev 58, paragraph 8. Back

24   Ev 40, paragraphs 30-31. Back

25   Ev 90, paragraph 14. Back

26   For example Ev w1, 2, 28 paragraph 2.1, 31, 32 paragraph 1, 34 paragraph 3(ii), 37 paragraph 7 and 41 paragraph 20. For support for the NTA see Ev w29-30. Back

27   Q25 and Qq218-19. Back

28   Q2 and Ev 81, paragraphs 2.3-2.4. This proposal was supported by Liverpool City Council, see Ev 55, paragraph 4. Also see Ev 50, 53 paragraph 8.3. Back

29   Ev 69, paragraph 6.5 and Ev 72-78. Back

30   Q205. Back

31   Ev w77. Back

32   Ev 56, paragraphs 7-10. Back

33   Ev w44-45. Also see Ev w84 paragraph 5.1 and Ev w88.  Back

34   See Ev 46, 67 paragraph 2.1. Back

35   Qq199, 201. Back

36   Q203 and Annual Audit Letter, Guildford Borough Council, Audit 2009/10, Audit Commission, Nov 2010, p9 and see Ev w47. Back

37   Qq199-200. Back

38   Section 68 of the 1847 Act. Section 38 explicitly distinguishes between hackney carriages and stage coaches.  Back

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Prepared 19 July 2011