Taxi and Private Car Hire Market

Lord Callanan Excerpts

Tuesday 20th October 2015 Lords Chamber

[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 I have long believed that the ridiculous distinction between private hire and hackney carriages is outdated and out of time.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.