Taxi and Private Hire Licensing

Iain Duncan Smith Excerpts

Tuesday 13th November 2018 Westminster Hall

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Thank you, Sir David. I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing this debate, and I echo his congratulations to Mohammad Abdel-Haq on what is essentially a comprehensive and good report. We do not have to agree with everything in it, but I hope the Government will realise that there is much agreement across all parties on the need to drive a lot of it forward to make the changes necessary to improve taxis across the UK.

I will focus my remarks fairly narrowly on London, and particularly on the effect on black cabs of the enormous increase in the number of hire vehicles, which is mostly down to Uber. The people who have quite rightly lobbied me to ask me to be present at this debate have found that their incomes have fallen quite considerably. I want to focus on some of the issues that have arisen, and I hope that the Minister will take them on board.

Uber is massively adding to London’s congestion; the figures show that. The hon. Gentleman made a point about the increased numbers of vehicles on the road. I think a significant amount of that is down to the arrival of Uber. It is time to look at its business model. I hope we all agree that Uber does not pay its fair share towards the upkeep of the roads that it runs on, through the normal tax base. To echo his comments, whether or not people like the flexibility of its business model—I think flexibility is important, and that the gig economy opens up huge amounts of competition—there comes a moment when we must recognise that Uber drivers are treated pretty unfairly. They are scraping by in many cases and often are not very well supported by the organisation that says it does not employ them, which I always find rather bizarre, because it does. The idea that somehow they are going to be incredibly successful as a direct result of this has mostly proved quite incorrect.

There is a lot of talk about how Uber got prices down, but the truth is that its model is about arriving in an area, undercutting everything else there and eventually driving people out of business, and building up a model that allows it to raise its prices. I am interested to hear that it even uses an algorithm that allows it to jack up its prices when there is demand, whereas the black cabs that it competes with are not allowed to do that. Black cabs have a fixed price set for them: they charge the same figure, regardless of whether one cannot find a taxi and it is pouring with rain. That is an area that causes great concern. Many people, in my constituency and others, who ply their trade in black cabs comment that this has led to all sorts of problems. Often, black cab drivers get complaints from passengers that they have recently been paying much more when taking an Uber, and they wonder why that is.

I recognise that the report covered much of that. The hon. Member for Cambridge mentioned an area that I think we need to focus on much more. This is not just a free-for-all. After all, the scale of the increase in traffic on the roads in London is quite staggering. Notwithstanding that, the previous Mayor managed to significantly cut down various traffic lanes for reasons to do with cycling. I am sure we all want more cyclists on the road, but the reality is that as a result, in London there are more cars on slightly fewer traffic lanes.

The number of private hire vehicles has increased by more than 50%. Transport for London data shows that between 2011 and 2017 there was a 39% increase in private hire licences, taking the total to over 87,000 vehicles, which is up by 40,000 in the space of only a few years, so the hon. Gentleman is absolutely correct; in fact, I would have liked him to have stayed on the subject for longer, because it is such an important point.

The side effect of the increase is significant, and we London MPs see it every single day. We see complaints about productivity in London being affected dramatically by the inability of vehicles to get around and make deliveries, because the scale of traffic inside the city is astonishingly large. It is a matter that the Government need to look at carefully, because of the way that the gratification of some people becomes a serious problem for others.

I am conscious of time, but I want to touch on another point as quickly as I can. I am concerned—anybody should be—that Uber’s business model, which I mentioned earlier, is alright for a short period of time when things are getting going. We want companies to get those opportunities and not be trammelled by too much tax—I am an absolute believer in that. However, when an organisation is as large as this and so dominant, there is a genuine reason why we need to look again at the business model. The figures that are most startling are that Uber paid £411,000 in corporation tax in 2016, on a turnover of £23.3 million, and that masks a number of payments. It has set itself up in Holland.

I understand about competition, but my concern is about who ultimately will pay for the roads and the condition that they are in if Uber will not. Black cabs are contributing through their tax and national insurance, as well as other private hire vehicles, many of which have been used regularly and are absolutely above board. They all have to pay through tax and through the way their company tax and regulations are applied, but Uber gets away with making next to no contribution to the state of the roads that it uses in plying its business. Uber keeps saying that it is not the one plying that trade; rather it is the drivers, who are independent, even though the drivers would not be able to ply their trade if Uber was not there. It would be a very different game.

I want to mention some constituents who have seen me about this issue: Ron Nicholson, Martin Franks, Mark Diggin, Steven Tyson and Trevor Board. They are all straightforward people who are trying to earn a living. London’s black cab system is arguably the most admired in the world. It is on all the posters, and I notice that the Ministers for Trade go out selling the idea of coming here to get black cabs. We regulate it incredibly highly. It has to have disabled access; I am enormously proud of that fact. Unlike places such as New York, where it tends to be more of a free-for-all, we genuinely have a seriously good service, with straightforward people who want to do a good job. We regulate black cabs, yet because of the app, they are in competition with an organisation that has to do none of those things, and which has broken the point about hailing from the road. The app makes that almost ancient history. The reality is that Uber drivers are, in essence, getting passengers from the road.

We need to rethink this. We cannot have it both ways; we have to decide. Either we admire and want to continue with a service of regulated vehicles and drivers that produces an excellent service, particularly in central London, or we do not. We cannot have this unfair competition and this unlevel playing field, with higher congestion as a result.

I urge the Minister to take into consideration the consensus, among both London MPs and those who come from other constituencies and use the excellent service here. Now is the time not just to take the report into consideration and do something about the issue, but to genuinely ask the question: do we really value what we have? If we do not, we will lose it, and if we lose it, we will end up in an absolute free-for-all.