Taxi and Private Car Hire Market
(8 years, 7 months ago)
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Lord Bradshaw
To ask Her Majesty’s Government what proposals they have for bringing up to date the regulation of the taxi and private car hire market.
Lord Bradshaw (LD)
The Minister may be glad to know that this is a genuine Question and not an opportunity to criticise him or the Government, or to say that things should be very different from what they are now.
First, it is important to decide where the taxi business should be regulated. There is a difference in some parts of legislation between national issues and the parts that are devolved, as are most parts in London, to the mayor. With the creation of combined authorities, when the opportunity comes, it would be as well for the Government to consider devolving powers over taxis and private hire cars to those authorities.
The existing legislation is very old and a lot of it begins in the 19th century. These laws have not held very well in these days of information technology and apps, by which people can summon private hire cars. I want to make it clear that I and, I think, those on my side of this House support the freedom of choice for the passenger and acknowledge the benefits that have been brought to many people who use Addison Lee, Uber and other such bodies.
However, it is necessary that vehicles remain mechanically safe and are maintained in a good condition. I believe that whatever authority oversees taxis there should be random checks to see that these standards are maintained throughout the life of the vehicle.
Vehicles should be properly insured. This should be backed up by the owner of the app by which the private hire car is summoned, who is a proxy for the operator in this case. It should not rely on an initial declaration that the car is insured, because there is no necessary continuity in that. I think it is the operator’s job to ensure that there is continued back-up insurance, so that people know that they are protected.
Vehicles will have to comply with increasingly tough environmental standards. Such standards need to be signposted ahead, so that people know when their vehicle will fall within the new standards and will purchase accordingly.
Drivers should be fit and proper persons and it is necessary that people have criminal record checks. Who is responsible for overseeing that? Is it the local authority or the person who owns the app and the private hire cars which work for them?
I say that the drivers should understand English. Whose responsibility is that? I have seen some papers which suggest that the responsibility is brushed off to the DVLA or someone like that. Actually, they need testing in their locality as to their command of English, their knowledge of what people want and whether they can help the many tourists and foreign visitors. They should have some knowledge, and some authorities require a medical. These matters need to be considered and thought about before any fresh legislation is embarked on.
The black taxi was described by the mayor as “iconic”. Understandably, it is instantly recognised by visitors as a symbol of London, but that symbol is now under threat. There is no doubt that an element of monopoly pricing exists, but this is to some extent offset by the meeting of exacting and expensive specifications as to the type of vehicle, its ability to turn around in a very tight space and the cost of acquiring the knowledge, which is required in London and is very expensive. It might be necessary to give the black taxi some element of protection through proper and sufficient enforcement of the distinction between a taxi and a minicab. The black taxi trade has latterly responded by setting up its own app called Gett.
I have been asked to mention the question of access for disabled people who have wheelchairs, guide dogs or mobility difficulties. The black cab trade, and previously the largest private hire company, carry out these obligations—not always, but they are equipped to do so in most instances. If private hire companies do not offer these facilities, then it is worth discriminating in favour of those that do.
I have also been asked to mention the question of rickshaws, which any forthcoming legislation really ought to deal with. They are quite dangerous; it is doubtful whether they are properly insured; they certainly tend to rip off tourists and probably give London a bad name.
A Law Commission report was published in May 2014, which made a lot of suggestions as to what the shape of forthcoming legislation should look like. Will the Minister tell us how the department is proposing to progress that Law Commission report so that it sees the legislative light in the near future?
Taxation is a vexed subject; there are all sorts of allegations about whether companies or their drivers are paying the correct tax. This needs to be addressed by future legislation.
Lastly, if we are to have real air quality improvements, it will be necessary to have electric vehicles. What is being done, either by the Government or by local authorities, to increase the number of places that have charging facilities for such vehicles?
Lord Selsdon (Con)
My Lords, I am very grateful to the noble Lord, Lord Bradshaw, for asking this Question and also to the noble Lord, Lord Borwick, who will speak after me and whom until recently I failed to associate with one of my favourite companies, Manganese Bronze, which makes the cabs—TX1, TX2, TX3 and the Fairway, which I have always wanted to buy and own myself.
However, there is a little more to all of this because the cab is iconic and the situation is very intriguing at the present time. Having been on the Information Committee, I do not have to do very much in my speech today because the House of Lords Library has produced a fantastic and thick briefing pack that covers all the issues. What is causing concern at the moment is not so much the rickshaws that will be arriving shortly when the flower shows open around Sloane Street and thereabouts; it is the application and use of taxis themselves and the control and management of the taxi system. There seems to be a sort of subliminal attack on the cab driver at the moment, which is confusing issues because cab drivers in general have been extraordinarily fair and are extremely honest people. I hardly ever used a cab until my knees went; when I was told I needed new knees, I then had to start taking cabs, which has been rather an expensive business.
The issue at the moment lies in the row going on within the cab trade between this new organisation, called Over Here or Uber or whatever it might be, and the cabs themselves. If noble Lords want the background to it, I recommend the Library pack which covers almost everything. There are difficulties in the future. It is being said that a cab is not really a cab if it is linked to Uber—Uber is not a cab, it is an organisation. How does it all fit together? I would rather we went back to being a little bit simpler. A situation has arisen in which TfL controls the number of private hire vehicle licences, which now stands at 89,000 and is increasing at the rate of 2,000 a month—therefore, 24,000 a year. This is an administrative and bureaucratic worry. The number of enforcement officers is also too low to control the behaviour of private hire vehicles touting in the street, both licensed and unlicensed. This touting by private hire chancers shows that it is too easy to get private hire licences. There needs to be some way of coming together on this; perhaps only black cabs should be allowed to respond to a street hail. The confusion within the industry is rather worrying.
I loved the black cabs that came from my noble friend’s company, because you could talk to the drivers. They were very proud and they knew when it worked. Sometimes they would almost give you their home number if you wanted a bit of help. I got used to the mistakes—when they had a Fiat gearbox that went wrong, or something else—but gradually they managed to get it right. One of the things I enjoyed most of all, when we had a major mission to Japan, was the idea of selling taxis to Japan, as well as Rolls-Royces and Bentleys. When I was on the Trade Board, we made the mistake of forgetting that the Japanese drive on the same side of the road as we do, so we had left-hand drive vehicles, which made it rather difficult. The suggestion was made that left-hand drive vehicles were provided deliberately, so that being nearer the pavement they could open the door and let the passenger out on to the street.
We have a little bit of a row coming up. I would really like to have a Fairway cab. I think it was the best ever made, and so do a lot of the drivers. We all know that most cab drivers live in east London and either play golf or cricket or fish. We need to look not so much at the vehicle itself but at the cab trade as a whole, which is very united. I have been briefed by many of its members, who are very concerned about the Uber business at this present time. That concern is getting to very serious levels, because we are not quite sure what Uber is. Is it an organisation or an association? Suggestions have been made that there is a shortage of compliance officers; that we should regulate licence holders; that only black cabs should be allowed to respond to a street hail; that all private hire should be pre-booked and bookings passed to an individual driver; and that the queues of masses of quasi-cabs or cars picking people up outside restaurants late on Saturday nights should be banned because this is causing anxiety.
We need to permit TfL to control the number of private hire vehicle licences, which, as I said, are at 89,000 and increasing rapidly. We are in the midst of a bureaucracy. I would like to know what the Government feel they can do to help. We are probably the best cab manufacturers in the world as far as the disciplines and organisations we have are concerned, but we have a row between providers of services—between those who drive cabs and those who feel that you can do everything by an electronic system. In my time here, even having been on the Information Committee, I have still failed even to send an email when the system is down, so I cannot speak from great experience. What I do know is that we have a really great cab trade that we should protect. We should stop this argument going on between the various parties at this time.
Lord Borwick (Con)
My Lords, I declare a past interest, having spent 15 years in the London taxi industry as the chief executive and later chairman of Manganese Bronze, which made the London black cabs. Also, I now own a licensed London taxi and employ a taxi driver.
I shall talk about one of the best features of all London taxis, which I introduced in 1997 with the late Sir Peter Baldwin and Ann Frye. We made wheelchair access for London taxis as standard. That meant that black cabs were the first form of public transport to offer this kind of access in all its vehicles. In my experience, taxi drivers very often do fantastic work for their own charities, but they also do wonderful work picking up a whole variety of individual passengers with individual needs, taking them directly to their destination.
We now know that Uber has been declared “lawful”, but we are still in murky waters when it comes to regulating the sector appropriately. TfL has recently published new proposals for the regulation of minicabs, which I think are broadly right. That is why today’s debate is so important and I thank the noble Lord, Lord Bradshaw, for raising it.
It is clear that the system of regulation for taxis—certainly for minicabs—is out of date in London, but there is much to be proud of in our approach. For instance, we regulate the taxi industry in London by quality, while other cities around the world regulate by quantity. That is a fundamental difference between London and elsewhere. In New York City, for example, the cost of medallions, or taxi licences, topped $1 million in 2011 because of the limited number issued originally. I am told that the value has fluctuated down to about $300,000 as a result of the growth of Uber.
In London, we are rightly proud of the quality of our taxi drivers and the service that they provide. With the knowledge, we have a wonderful three-year system for weeding out the chancers, crooks and con artists. Such future convicts do not have the patience to learn the knowledge. A very small number might get through, but it is extremely rare. As such, completing the gruelling training, studying and examinations rightly generates immense pride in people who have gone through it. Three years’ work, voluntarily undertaken, unpaid, by intelligent people is a tremendous investment in good public service. It is about £150 million of labour, volunteered to make our taxi service better.
The trouble is that structuring a test around geography means that we are just testing people on a computable problem. The taxi driver of the year competition used to challenge drivers to visit places scattered around London. The driver with the least money on the meter was declared the winner. Only in London could this happen. But technology moves on: today’s smartphones know the geography of London better than the London taxi driver of the year. Apps such as Hailo, Uber and Gett do a wonderful job in enabling a customer to get a cab without waving their hand in the air.
Here I declare another past interest. I believe that the first hail of a taxi from a mobile phone anywhere in the world happened in 2002 from my office. It was through Zingo, a subsidiary of my then company, which developed this technology. Having had often to walk in the rain from my house to get a black cab, I thought I should be able to order one from my kitchen instead to pick me up. This was way before the advent of the smartphone, so it was too early to be a success. We had no idea that we had invented the concept behind Uber.
When we worked on a prototype, we were sure that there must be a relationship between the number of taxis and the speed to answer an electronic hail. We did not know whether this related to the square root of the number of vehicles on the system or some other way of calculating it, but there clearly is a connection. The number of private hire vehicles in London was nearly 63,000 at the beginning of this year, an increase of 26% since 2013. There are about 88,000 or 89,000 drivers today, growing at about 650 per week.
That rapid growth in the number of private hire vehicles in London is so important. Because of that enormous growth relative to taxis, the market has been disrupted. This is not necessarily bad, but it could have some unpredictable effects. People living in residential streets near Heathrow and other Uber “money pots” complain about the number of Uber cars parked in their streets waiting for calls. It should not be illegal to park in a street, but sleeping in cars is certainly undesirable. Should we even think of restricting the number of minicabs? Should we think of charging them a fee for working in the central London congestion charge area?
A taxi has a driver plying for hire, while a minicab is a pre-booked service. The system of hailing through a mobile phone has made plying for hire more efficient, but has bypassed the regulations requiring minicabs to be pre-booked. Because of it, the distinction between minicabs and taxis has been markedly reduced.
When the user’s screen on a smartphone shows 20 private hire vehicles within half a mile and one responds, coming directly to them, it is really hard to argue that these vehicles are being pre-booked in accordance with the spirit of the original regulations. One of the new regulations being consulted on by TfL removes the possibility of showing these 20 minicabs geographically on a screen, but I doubt that it will be possible to write such a regulation without it being bypassed by a message saying, “There are 20 Uber cars within half a mile of you”. But is this always true? There have been suggestions that some apps add vehicles to the screen that are not actually there, to make it look busier. In any case, the best that could be achieved is to have the operator at least certify that the information that he provides is accurate.
Another new regulation being considered is to build in a five-minute delay to enable the passenger to read the details of the driver arriving. I also doubt that this will work, as any extra five-minute delay is not in the interest of the passenger wanting a vehicle right now. I believe that a simple extra chip in the minicab could broadcast to the passenger the details of his cab when it arrives, and confirm that it is not an imposter. The regulator, however, has on file the national insurance number for minicab and private hire drivers. It would, therefore, be easy to require private hire operators, such as Uber, to ensure that their drivers had a good tax history. Uber will be paying tax in Holland, as is its right, but will it not be eager to ensure that its drivers are legal taxpayers here?
Uber is an astonishing company because it has made itself disliked worldwide by regulators, but loved worldwide by customers. The hard truth for any industry is that disruptive technologies are the most powerful way of updating sclerotic practices. That means we must have new regulations so that the good work of London taxi drivers does not die out. It is an astonishing coincidence that this afternoon Uber has announced UberAssist, a system which it says will help disabled passengers. However, the vehicles are not accessible, and a very few partially trained drivers will help but not meet the need. To lose the wheelchair access of the purpose-built London taxi would be a tragedy for disabled people. One of the great costs of disability is the overhead of planning. To spend one’s life constantly working out when and where you relieve yourself, and how you are going to get home, is the sort of thing that most disabled people are required to undertake as part of their disability. London taxis, with wheelchair access as standard, provide an important service that allows disabled people to make spontaneous decisions. That gives them freedom to change their minds—a privilege that should not be reserved to the able-bodied.
The future of regulation for this industry must be designed to preserve and enhance the pride and self-confidence that typify the taxi drivers of London. The system of testing geography, though, is outdated. Many features of dealing with the public responsibly could be designed into a testing system. Furthermore, the full range of disabilities is wider than can be easily imagined by taxi drivers, so I also recommend that drivers are required to do a longer course in disability awareness. That could even include sitting in a manual wheelchair for a few hours, attempting to carry out everyday tasks. I also say that, to embrace the future while preserving the high standards of our taxis, they should be required to incorporate at least one of the taxi-related hailing apps. Taxis must not be harder to hail than private hire. Furthermore, taxi drivers must be more welcoming of customers who prefer to pay with credit cards. People go about their entire daily business with no cash and use cards only. Making it difficult to use cards, quite often purposefully, or charging an absurd premium, is losing customers for taxis.
Overall, the growth of Uber and the efficiency of its system is much loved by the public, but it would be a tragedy if its system damages the taxi trade and accessibility for disabled people. If it does, then the only solution will be to require minicabs to be accessible.
Baroness Randerson (LD)
My Lords, I thank my noble friend for introducing this debate on an important issue. I have always believed that progress and change are to be embraced rather than resisted; hence I welcome the technological changes that IT and apps have brought to the taxi and private hire industry. Not to do so would put us in the same position as the Luddites in the 19th century and the newspaper and printing industry in the 1980s. However strong your protest, the industry will keep changing around you.
The secret is to harness the best of the new and to make sure that it works for both employees and customers. Just as the 19th century Industrial Revolution needed the Factory Acts and a whole gamut of employment legislation, so the taxi and private hire business needs a swift regulatory and legislative response to the technological change it faces. The customer must be at the centre and the customer has changing needs, changing work patterns and changing leisure patterns. Above all, the physical safety of customers must be paramount, with a good standard of driving and protection from crime. We need to look at the availability of cabs, as well, of course, as the universal accessibility to which the noble Lord has just referred. Passengers must be central to that change.
There has been a depressingly slow response to rapid change. In London TfL regulations have not been comprehensively updated for 20 years and sit within legislation that is even older, some of it a great deal older. A very useful report in 2014 by the Transport Committee of the Greater London Authority, chaired by Caroline Pidgeon, called Future Proof, tells a woeful tale of inaction by TfL and I am really glad that TfL is now at last consulting on the need for changes to the regulations and its proposals for legislative change.
As noble Lords have already said, this is a two-tier industry throughout the country but now it is almost a three-tier industry, with Uber operating like a private hire vehicle and charging like a taxi. The problems are most acute in London but, as so often, where London leads a lot of the country will follow, so I will concentrate on London. Today one in 11 vehicles entering the central London congestion charge zone is a minicab. Two years ago it was one in 100 vehicles. The number of private hire drivers has tripled in the past decade. There are 600 applications a week for private hire licences. That is an unsustainable expansion. Meanwhile, the number of black taxis is stagnant at about 25,000 and their drivers are an ageing population, with only 5% of taxi drivers under 35 and 40% over 55. Of course, this is because of the complexity and how long it takes to complete the knowledge, with 80% of candidates failing to complete it.
Black cabs in London are a gold standard. We are justified in being proud of them, but that gold standard is at risk. It needs action to protect it. We need to do something. The knowledge probably needs to be amended. It needs to be incorporated with what you get from apps giving you maps and locations and so on, but it does not need to go altogether. It supplements those things rather than replaces them.
If you have too many minicabs, in the end you are going to drive down standards because people who are desperate for a fare will be touting and going in for illegal actions and sharp practice, and this will harm the customer. There is also the issue of traffic congestion, of cabs endlessly circulating, of parking problems and additional emissions. We need to be very conscious of that.
In the current situation there is a concern that in the case of Uber the onus is on the driver to ensure that their insurance and so on is up to date. If you put too much pressure on drivers, you put them in an unfair position and it makes life very difficult for them. But insurance is a concern to us all. I draw noble Lords’ attention to the Guardian article earlier this year, a piece of good investigative journalism which revealed that the system used by Uber allowed fake insurance documents to slip through unnoticed. At a much less sophisticated level, there is the issue of whether a driver’s insurance is fully valid. Private hire companies generally have their own fleet insurance, which ensures legality at a fleet level.
Then there is the High Court decision last week that the Uber app used to calculate fares is not a taxi meter and therefore is not subject to the regulations that apply to one. I find this perplexing. It is probably due to the fact that the law is out of date. But there are parallels with the apps that now do the same thing as electricity smart meters, which we were all going to have installed in our homes. You can get the same thing on your phone for your electricity supply.
What is happening is that technology is conflating and overtaking the legislation. Our phones are now also our cameras, our emails and our maps. This applies to taxis as well. The two-tier industry serves different needs, and Uber straddles the two in its way of working. Why and how are taxis different from minicabs? As the noble Lord has said, taxis are hailed and minicabs are booked. Because taxis are hailed in London, this justifies the rigorous demands of the knowledge. The driver needs to know where to go and how to get there immediately. The legislation requires minicabs to be booked, which enables them to look up where they are going to go, because you are supposed to state your destination. However, the Uber app effectively allows a cab to be hailed by smartphone and does not require or allow information on the destination at the time of booking. Users of Uber tell me how quick and convenient it is, which is important. We need to remember that people like it, but we also need to remember the insurance problems and the lack of a requirement for disability access. The app is not a taxi meter, according to the court judgment, so there is no obligation to go by the shortest route. We need to remember the use of surge pricing, which is the equivalent of your going into Marks & Spencer, selecting a winter coat for £80 and discovering, when you get to the till, that it is a very popular coat and they are going to charge you £100. I do not believe that is acceptable.
A separate issue, not for this debate but of concern to us all, is that these companies are legally set up to pay very little tax indeed. Competition is good; unfair competition is bad. There is huge demand for the Government to modernise the legislation to deal with the issues that I have outlined. I very much hope the Minister will tell us that a taxi Bill is on the way.
Lord Callanan (Con)
My Lords, first, I thank the noble Lord, Lord Bradshaw, for giving us the opportunity to debate this important issue today. In the taxi market, as in most other industries, choice and competition should be encouraged and should be our watchwords. For too long though, choice and competition have been regulated almost out of existence by both our local and national authorities. Now, however, thanks to the miracle of new technology, the market is being effectively disrupted, and consumers are benefiting all over the country, particularly in London. We are talking, of course, about the apps that everybody else has referred to in this debate, particularly the most popular one, Uber, although there are many other examples. They are, in my view, a splendid example of market disruption in practice—in the single digital market, of which the Government keep telling us they are strong supporters.
The supply of taxis in most cities in the UK has been artificially restricted for years. I have long believed that the ridiculous distinction between private hire and hackney carriages is outdated and out of time. Those differences, in my view, should be abolished. Indeed, as my noble friend Lord Borwick pointed out, that is effectively being done by new technology. So long as they are appropriately licensed, insured and with a safe vehicle, let all who want to do so operate a service in a safe manner, whether by an app, hailing in the street, telephone or any other means that they want to use to operate that service.
Needless to say, it should come as no surprise to us that the incumbent operators are resistant to change in the market. That is understandable: typists were opposed to word processors and typesetters were against desktop publishing software. They failed in the end—you cannot resist the march of technology. Surely, in here of all places, we should be on the side of consumers rather than of producers. Consumers are demonstrating in their millions that this is a service they want and require and, frankly, they will use it irrespective of what we choose to do in this place.
I was particularly incensed by the current TfL consultation on future taxi regulation in London. If anyone has a bored hour, they can look at it on the internet. It looks to me as though TfL has precisely identified the specific business model of apps such as Uber and decided to attack it. My noble friend Lord Borwick has already referred to some of the more ridiculous parts of the proposals, but let me also talk about them.
The consultation says that operators must not show vehicles being immediately available for hire. It is a bit like asking corner shops to hide their stock away from customers lest they want to buy it. It proposes to impose a five-minute delay from the booking being taken to the journey commencing. That is the daftest of the lot. Are they seriously saying that someone should stand in the rain alongside a pre-booked vehicle until that artificial five-minute period has expired? It is crazy. Next, I assume that we will have to have a five-minute delay in our house lights switching on to help candle makers impose their trade.
TfL wants to ban ride-sharing apps because of apparent concerns about driver safety. I thought we wanted to encourage more efficient use of vehicles and our road space. We know that this already happens informally in airports all over the world. Two people will stand next to each other and agree to share a taxi into a city centre. All that smartphones do is make that option, which happens informally any way, more formal and easier for customers to access.
It proposes that all apps have to offer the option of pre-booking a week in advance. Personally, that is one aspect of the Uber service that I find irritating. I like to have the option to book in advance, but I have a choice. I have another app that allows me to book in advance. That is the essence of consumer choice. Let us not restrict one market mechanism in favour of another; let us deregulate. Let us allow black cabs to offer their service—they offer a very good service; I have a lot of sympathy with black cab drivers—but let us not restrict people’s choice to use other services.
The noble Lord, Lord Bradshaw, referred to the specific requirement of a language test—for drivers to speak English. Many customers may want that, and they can access apps, taxis and black cabs that allow them to specify that, but in my view, it is not an essential requirement. I have often used Uber in Brussels, and I have not been able to discuss the options with the driver. He has not spoken the same language as me. Some of them have spoken Dutch, some of them have spoken French. Frankly, I do not care. I tell the app where I want picking up from. I tell it where I want dropping off. The driver does that. No cash changes hands; my credit card is charged afterwards. It may be a service that some people want, but it should not be a specific requirement imposed by regulation.
It seems to me that the TfL motto, “Keep London moving”, should be changed to, “Keep London moving following a statutory five-minute delay”. As I said, I have sympathy for black cab drivers. In my view, they are over regulated. As several Members have said, it is ridiculous to make them follow the knowledge when GPS, smartphone apps and traffic monitoring systems do the job equally well. Surely that regulatory requirement should be shifted from them. The answer is to reduce regulation on black cabs and other hackney carriages, not to impose more regulation on other disruptive services.
I strongly urge the Government to have the courage of their deregulation rhetoric and let 1,000 apps flourish.
Lord Crickhowell (Con)
My Lords, in asking to intervene in the gap, I must congratulate the noble Lord, Lord Bradshaw, on raising the issue, my noble friend Lord Borwick on an admirable summary of the problems and merits of the situation and the noble Baroness, Lady Randerson, on emphasising the flood of private hire vehicles that are entering London. I am entirely in favour of competition. I say to my noble friend Lord Callanan that I do not entirely agree with the TfL consultation. I do, however, think that there is a need for a re-examination of the regulatory system.
I started the day by going to a funeral in Wales, employing my admirable minicab service locally which picks me up at my house. I know what it is—I know that it is secure and well managed and has proper insurance. I travelled back to the House in a black cab. I therefore have nothing against competition. However, there are real issues, a number of which have been emphasised today. There is a flood of drivers coming in. We know very little about the driving ability of many of them, and I think that that is a matter of concern and interest. There are real issues about insurance—insurance not just of vehicles but the adequacy of insurance for the passengers and for third parties. I have heard of cases where, because the insurance was not adequate, the private hire drivers have actually run away from the scene of an accident. Such an incident, I am told, happened in Trafalgar Square only last weekend and caused a security alarm.
There is the issue of knowledge. I am not entirely a believer in the perfection of the sat-nav. The lovely driver who drove me this morning had his sat-nav on, but he wisely followed my instructions for the route to Paddington, and it was a great deal shorter and more direct than if he had followed the sat-nav direction. There has got to be some knowledge if we are to get best value for customers. There is also a real issue about moral standards and the lack of knowledge of what is involved. My noble friend Lord Borwick made some important points about wheelchair access.
My conclusion is that certainly regulation needs amending. I am not arguing in favour of the TfL recommendations. I do not think I know enough about them. We do, however, need some kind of regulation to deal with this situation. It should certainly embrace the contribution that major technology can give—yes, of course—but we need adequate safeguards so that passengers are not exploited by companies that, after all, are managed from outside this country. Any challenge to individuals is promptly referred to the head office in the United States, and, as we have heard, taxis apparently get paid in Holland. I am not sure that that provides a really secure basis for people using cabs in this country, so I think we need revised regulation. I hope that my noble friend the Minister will be able to tell us that the Government are giving very proper consideration to this important issue.
Lord Rosser (Lab)
My Lords, this is a very timely debate that the noble Lord, Lord Bradshaw, has secured, particularly given the uncertainty that now seems to exist in the taxi and private car hire market in light of the development and expansion of Uber and the recent High Court ruling that the Uber app is legal, and Uber cars are not considered to use meters.
As has been said, Transport for London has announced a public consultation on new regulations on Uber. It has said that it welcomes the legal clarity of the court ruling and that it will continue to gauge public opinion on potential changes to private hire regulations. It says that those have not been comprehensively updated for almost two decades and now need to take account of recent developments and to ensure they are fit for the future.
The Mayor of London is calling on the Government to bring forward primary legislation to give TfL the power to cap minicab numbers, the number of private hire drivers having risen substantially over the past six years, as had already been said, with the rate of applications now reaching 600 per week.
Uber, though, is not confined to London, as far as the UK is concerned; it says that it has a presence in 11 major UK cities, so this is not simply a London issue. The court ruling underlines the need to get taxis and private hire vehicle regulation right. The Government need to bring forward statutory measures to ensure that, when someone contacts a taxi or a private hire vehicle firm, they can have confidence that the firm is reputable, the price is fair, and that their safety and security are paramount.
There surely needs to be a level playing field, which no longer appears to be the case. That is felt particularly acutely within the London black cab taxi trade, which feels that its specific right to ply for hire is under threat and that the demanding standards to which it is still expected to conform, not least in the interests of passenger safety, are not being applied to competing newer operators in particular. No doubt the Minister will tell us what the Government’s position is on Uber and whether they see any need to review the relevant taxi and private hire vehicle regulations—and, if they do, with relation to addressing what issues.
The development of Uber is normally considered as representing a challenge to existing regulated taxi services. However, do the Government see its impact as stretching further than that and having consequences for the level of use of the bus and rail services in our conurbations or on the use or frequency of use of private cars, or impacting on traffic congestion or air quality? Perhaps the Minister could comment on that point.
Last week we had a debate on shared spaces and the difficulties that they could create for blind and visually impaired people. The Guide Dogs for the Blind Association also has concerns, as has been said, about assistance dog owners being refused access to taxis and private hire vehicles, and has provided a briefing on this point. The briefing states that of more than 1,100 assistance dog owners, 43.5% of survey respondents had been refused access to taxis and private hire vehicles in the past year, even though they are entitled by law to such access without discrimination. The briefing goes on to say that refusal of carriage is so common that assistance dog owners often do not report cases—two-thirds of assistance dog owners who had been refused access within the last year had not reported it. The briefing goes on to point out that, due to the nature of visual impairment, it can be difficult for a person with sight loss to identify the offending driver.
The Guide Dogs for the Blind Association says that local authorities are not required to make disability awareness training a requirement for licensing of taxis, although a Law Commission report has recommended it. The association is also calling for it to be made easier for assistance dog owners to report cases of access refusals and to increase the penalties for those committing such an offence.
In a recent Written Answer to a parliamentary Question in the Commons about what steps were being taken to address taxi refusals for assistance dog owners, the Government said:
“The Equality Act 2010 includes a legal requirement for all taxi and private hire vehicle drivers to carry assistance dogs and not to charge more for doing so”.
The Government went on to say in their written response:
“In addition to their ability to take appropriate action in the event that licensed drivers fail to comply with this duty, local licensing authorities can inform taxi and private hire drivers of all their responsibilities as licensed drivers”.
That Answer smacks of a Government declining to get involved in an issue of national application and significance, when the evidence available suggests that something is going seriously wrong. It also relates to one of the issues raised by the noble Lord, Lord Bradshaw, in opening this debate—namely, where does responsibility for regulation of the taxi and private hire market lie? Where does responsibility lie for ensuring that the regulations maintain their relevance by reflecting changing circumstances, and where does responsibility lie for ensuring effective monitoring and application of those regulations, whether it be in relation to the needs of disabled people, the suitability of operators, the reality or otherwise of fair competition, the quality of service provided or the implementation and maintenance of appropriate safety standards, including insurance?
In view of the apparent number of potential fingers in the taxi and private hire regulation pie, it would be helpful if the Minister could set out the matters related to the regulation of taxis and private hire vehicles for which the Government consider themselves responsible, and the matters for which they consider other bodies and parties responsible.
A briefing on the licensed taxi and private hire vehicle trade in London has also been provided by Addison Lee. It believes, rightly or wrongly, that regulation of the industry by Transport for London is resulting in unfair commercial advantage being given to new market entrants and it is calling on the Government to bring forward primary legislation to ensure, first, that all operators providing a taxi function are subject to national minimum standards and, secondly, to reflect recent changes in the market, including the business models of new and potential market entrants.
The Addison Lee briefing then addresses concerns it has regarding the Uber operating model, including in respect of insurance and tax arrangements, and concludes by saying that Uber London Limited is not a fit and proper person to hold a TfL operator’s licence and that the unfair commercial advantage that has been given to Uber has resulted, in its words, in the decay of traditional industries that have kept London moving for decades.
There was a report by the Law Commission in May 2014 on taxi and private hire services. That report, I think, said that there are more than 340 licensing areas across England and Wales, but that licensing officers have no cross-area enforcement powers and there are no common national standards. Matters such as whether drivers have disability awareness training or what types of criminal convictions should disqualify a person from working as a driver are left to local decision-making, resulting in a very variable national picture.
The report goes on to say that the piecemeal evolution of the regulation of taxi and private hire services has resulted in a complex and fragmented licensing system with the relationship between taxi and private hire services not clearly defined and with the balance struck between national and local rules lacking an overarching rationale resulting in duplication, inconsistencies and considerable, difficulties in cross-area or border enforcements. Continuing, the report comments that mobile phones and the internet have revolutionised the taxi and private hire trades, yet regulation has failed to keep pace.
In a report dated March 2015 on the implementation of the Law Commission proposals, the Government accept that the law that governs how the taxi and private hire trades operate is old, inconsistent and struggling to deal with internet-driven changes in passenger behaviour. The Government then refer to three taxi and private hire measures that were included in the Deregulation Bill, one of which was dropped when its implications for passenger safety were pointed out. The Government go on to claim that 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.
That, frankly, is not good enough, since it is little more than government-speak for saying that nothing of any significance is going to happen for a considerable period of time. The rate of change in the taxi and private hire business as a result of new technology, which has led to protests on our streets from taxi drivers who feel adversely and unfairly affected, and the major concerns being expressed by large private hire operators on top of the inadequacies of the present fragmented regulation arrangements and the lack of clarity about which bodies and organisations have responsibility for taking action on which issues, which I have asked the Minister to address in his response, mean that decisive action is needed with a rather greater degree of speed than the Government so far appear willing to generate. I await the Minister’s reply with interest rather than with hope.
The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)
My Lords, I join other noble Lords in thanking the noble Lord, Lord Bradshaw, for securing this debate in a timely fashion. Perhaps he had some foresight of what was going to happen elsewhere. This is an important issue for the here and now. I also thank all other noble Lords for their valuable contributions, which were often based on not just user experience but their experiences of a very important industry.
Although the Government are ultimately responsible for creating the legislative framework within which local licensing authorities license taxis and private hire vehicles, noble Lords will appreciate that responsibility for licensing rests with local licensing authorities. This question was raised by the noble Lord, Lord Bradshaw, and, on a couple of occasions, by the noble Lord, Lord Rosser. I will come on to the specifics in a moment. It is the licensing authority’s responsibility to decide who is a suitable person to hold a taxi or private hire vehicle driver’s licence or a private hire operator’s licence and to ensure that all licensees comply with the rules and regulations that govern the industry. However, I of course recognise—and the Government recognise—that it is the responsibility for the legislative framework that forms the actual basis of licensing. The noble Lord, Lord Bradshaw, for example, asked the question relating to criminal record checks. They are carried out by the Disclosure and Barring Service at the request of the licensing authority, and it is the responsibility of the local authority to scrutinise that particular check.
The noble Lord, Lord Bradshaw, also raised the issue of understanding English. I think that my noble friend, with his experience of Brussels and Holland, also highlighted the fact that you can get, with the applications that we now see, drivers speaking different languages; but there is a recognition that a language test would be the responsibility of the licensing authority. However, I totally take on board the noble Lord’s point. I am sure that I speak for all noble Lords when I say that, wherever you go in the country—especially if you arrive in a place that is new—a taxi driver is often the source not just of taking you to the right place but of local information and knowledge as well. I am sure that we have all had those conversations in great detail.
My noble friend Lord Borwick, the noble Lords, Lord Rosser and Lord Bradshaw, and the noble Baroness, Lady Randerson, all rightly raised the issue of accessibility. Accessible vehicle provision is again, of course, a matter for the licensing authorities and they are best placed to determine the vehicle fleets in their area. Currently, with regard to London, TfL requires all hackney carriages—as noble Lords will be aware—to be wheelchair accessible, but does not have similar requirements for private hire. I will come on to the Law Commission recommendations in a moment, but one of those recommendations was mandatory disability awareness training for drivers, which would be part of the consideration.
The taxi and private hire industry are a vital part of the public transport story. As well as keeping cities moving 24 hours a day, they are a vital lifeline for those who are unable to use other forms of public transport or their own vehicle. The availability of both taxis and private hire vehicles across the country offers the travelling public real choice. They can either instantly hire a taxi in the street or at a taxi rank; alternatively, they can pre-book a taxi or private hire vehicle. When pre-booking, passengers are able to make an informed choice based on factors such as price, availability and quality. This combination of taxi and private hire ensures that the needs of as many people as possible can be met.
Of course—and several noble Lords made this point—passenger safety must be at the heart of the regulatory regime around the industry, and this must be the top consideration when looking at how the industry evolves and how it is changing. This includes the importance of insurance cover, which was highlighted by my noble friend Lord Crickhowell.
As several noble Lords have pointed out, in London, the traditional London taxi or black cab has become an iconic symbol of the city and the industry as a whole, and continues to play a key role in keeping London moving. It has a history and reputation that drivers are rightly proud of. London’s taxi service is recognised as one of the best in the world. The noble Baroness, Lady Randerson, called it the gold standard. All the vehicles are of a high standard and are fully wheelchair accessible; they are driven by skilled and knowledgeable drivers, a point well made by my noble friends Lord Selsdon and Lord Borwick. We all admire the time and dedication that prospective drivers put into learning the world-famous knowledge of London. This brings the reward of having the unique right to ply for hire on the streets of our capital city.
As all noble Lords recognise, the market is changing. New technology is providing new ways of engaging taxis and private hire vehicles. As my noble friend Lord Callanan pointed out, smartphone booking apps are now available for both taxis and private hire vehicles, not just here in the UK but across Europe as well. They offer people easy access to services, more choice, faster pick-ups and options for sharing, which can reduce the cost for travellers. It is encouraging that the London taxi trade has been at the forefront of this technological change. One can now book a taxi through numerous smartphone apps and more and more drivers are embracing cashless payment options, which again addresses issues around the security and safety of passengers. However, I accept that this new technology is challenging traditional operating boundaries between the taxi and private hire trades. I understand that it is straining the relationship between licensing authorities and the industry, but by working in partnership they can deliver a modern industry that will continue to provide both choice and high standards, focused on customers—a point well made by my noble friend Lord Callanan.
On Uber, the evolution of the private hire sector has helped to ensure that this form of transport is available to all in an inexpensive manner, particularly supporting those who cannot rely on other public transport services. Uber and other new entrants to the market are presenting major challenges to established business models, and I can understand the concern of taxi drivers.
My noble friend Lord Selsdon raised the issue of what Uber is. Uber London Limited has been licensed by Transport for London as a private hire vehicle operator in London since 2012. The company has now applied for and been granted licences in 25 other licensing authority areas in England. As the noble Lord, Lord Rosser, rightly pointed out, Uber is not just an application or a service in London.
To inform noble Lords, although many may well already be aware, in order to be granted a licence, Uber must meet the same standards as any other private hire vehicle operator in the local authority area. Therefore, 26 different authorities have decided that Uber is a “fit and proper” company, its operating model meets the requirements of private hire legislation, and it keeps such records as the law requires.
I know that the London taxi trade fundamentally disagrees with the view of Transport for London on how Uber calculates a fare. Many members of the taxi trade consider Uber’s smartphone app to be essentially a taximeter, which are of course forbidden in London’s private hire vehicles. TfL recognised that the law in respect of this issue was unclear and applied to the High Court for a declaration. The High Court has recently made its judgment that Uber’s smartphone app is not a taximeter and therefore it is not breaching the legislation.
On the question of low emission vehicles raised by the noble Lord, Lord Bradshaw, many areas are concerned about meeting their air quality requirements. Therefore, to assist with these concerns, in April this year the Office for Low Emission Vehicles announced the launch of a £45 million fund to support the rollout of ultra-low emission taxis across the United Kingdom. £20 million of this fund has been identified to encourage a new generation of ultra-low emission taxis. Eight cities have been shortlisted, and the winning schemes will be announced in April next year.
I will briefly address the Law Commission review. While I recognise the standard and commitment of this industry, I also realise that there are areas of concern within the regulatory regime, which was rightly raised by several noble Lords. Noble Lords will be aware that in 2012 the DfT asked the Law Commission to conduct a review of taxi and private hire vehicle legislation throughout England and Wales, including London. This was against the backdrop of the Government’s Red Tape Challenge and legislation that dates back to the first half of the 19th century, as the noble Lord, Lord Bradshaw, pointed out, and the age of horse-drawn hackney carriages.
Despite the more recent legislation to allow for the regulation of private hire vehicles, the recent innovations that I have described have demonstrated that the legislation used to regulate both the taxi and private hire trades is becoming increasingly outdated. Licensing authorities throughout England and Wales are now faced with the challenge of accommodating 21st-century technology in 19th-century legislation.
The Law Commission undertook a very comprehensive review and last year published its final report, which contained recommendations for a modern and simplified structure. The Law Commission’s report not only provided crucial analysis of the problems posed by the current law but also has provided solutions designed to make a difference to both the travelling public and those who work in the industry. Updated and simplified legislation will provide a modern and simple framework, which in turn will ensure public safety and provide the trade with certainty, therefore making growth and competition easier.
The Law Commission has made several suggestions about how the law may be reformed, including one, to pick up on a point raised by the noble Lord, Lord Rosser, that companies and drivers should be allowed to operate across boundaries without the current restrictions. A vital part of this proposal would be the introduction of national standards for drivers and vehicles. I see national standards as having the potential to resolve some of the existing cross-border concerns that are being raised at the moment. I am also aware, however, that some licensing authorities feel restricted in their ability to carry out enforcement actions against vehicles and drivers who are not licensed in their area. National standards would remove the incentive for drivers to go far from home to get a taxi or private hire licence.
The Law Commission has made extensive law recommendations, and these need to be carefully studied before deciding whether to go ahead and what the Government will do next. In this regard I can inform noble Lords that we are already engaged, including the Secretary of State and the Mayor of London, in discussing the implementation of the recommendations from the Law Commission. I can assure noble Lords that the Government will formally respond to the Law Commission and announce its intentions once this scrutiny is completed.
In conclusion, the Government are fully aware of the changes and challenges that are affecting the taxi and private hire vehicle industry, not just here in London but around the country. Not only are there the challenges of new technology and increased competition but also the need to ensure that vehicles play their part in improving air quality. The Government wish to see taxi and private hire form part of the wider public transport agenda, with thriving competitive markets to make sure that we make the best use of emerging technologies while protecting the passengers that travel in them.
I thank noble Lords for their contributions. This is an area and a question to which I am sure we will return. However, I assure noble Lords that it is an area that the Government are considering very carefully, and I suppose at this late hour my concluding remarks are that, however noble Lords choose to travel home this evening, be it a black cab, a private hire vehicle, or indeed public transport, I hope they do so safely and securely.