Taxi and Private Car Hire Market

Baroness Randerson Excerpts

Tuesday 20th October 2015 Lords Chamber

[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.