London Black Cabs

Debate between Lord Goldsmith of Richmond Park and Mark Field

Tuesday 15th September 2015 Westminster Hall

[Zac Goldsmith (Richmond Park) (Con)]

I beg to move,

That this House has considered the future of black cabs in London.

It is a pleasure to serve under your chairmanship, Sir Edward. We have an hour and a half for the debate and I know that a number of people want to speak, so I will keep my remarks quite short and to the point.

Black cabs are an iconic part of London and are famous around the world. The first horse-drawn hackney coaches appeared in London during the reign of Queen Elizabeth I, and the first taxi rank was installed in the Strand just over 400 years ago. The famous knowledge was started in 1884. Today there are 25,000 black cabs in London. They remain a vital part of the capital’s transport system and play a key role in keeping London moving.

For me, black cabs are one of the things that make London stand out. Their value is not necessarily quantifiable but is huge and real, all the same. I am reassured, for example, by the fact that taxi drivers have had rigorous background checks. I like the fact that they know every nook and cranny of our capital. For many people visiting our country, our unique taxis are the first thing they see and their drivers are the first people they meet and talk to. I would think nothing, personally, of depositing any one of my children in a black cab at any time, as I would know absolutely that they would be safe. It is hard to put a number on all that, but it is worth something.

The tragedy is that black cabs’ days could soon be numbered. If trends continue, I do not think that there is any doubt that they will be extinct in a matter of years. I will briefly explain why. Transport for London’s rules enforce a two-tier system for taxis in London. London’s black cabs can ply for hire and wait at ranks. Their fares are set by TfL, as are their stringent service standards. The reason they are licensed to pick up anyone from the street is that TfL has confidence that the drivers and vehicles are safe and the price is fair. Private hire vehicles, on the other hand, have to be pre-booked, so cannot legally ply for hire. Their fares are not set by TfL and their drivers do not pass the knowledge or do advanced driver courses. PHVs have less regulation because customers book them in advance and so know what deal they are getting and what service they can expect.

That system largely worked fine until recently, but the emergence of Uber has turned it on its head. The speed of the Uber app means that its cars are effectively hailed by users, and no one can reasonably argue that they do not also ply for hire, picking up people straight from the street. The one key advantage enjoyed by black cabs has simply evaporated.

I have been told recently by people who think of themselves as free marketeers that we should not intervene—we should let progress have its way and let the market decide. But that is not an honest position to take, for the simple reason that the black cab trade in London is not a free market and never has been. Costs are piled on to the black cab by regulation. They are the most regulated taxis in the world by far. Black cab drivers’ fares are set for them by TfL and they are told which vehicles they are allowed to drive. Their vehicles must have a turning circle of 8.535 metres, a partition separating passenger from driver, an overall length of no more than 5 metres, a flat door in the passenger compartment with a minimum height limit and an approved taxi meter, and must be able to accommodate a person in a wheelchair.

[Mark Field (Cities of London and Westminster) (Con)]

Although I have a lot of sympathy with what my hon. Friend is saying, equally, we do have technological change, and Uber is part of that. Given that Uber is now in this highly regulated black cab market, is there not a perfectly good Conservative argument that suggests that the amount of regulations for our black cabs should be reduced to make them more competitive?

[Zac Goldsmith]

I agree with my right hon. Friend up to a point; I will come to that shortly, but I do not think it will be enough. Deregulating the black cabs to put them on a genuinely level playing field with Uber and the like would logically mean the end of the black cab. That is the decision we need to make, but it is not one I would be happy with.

--- Later in debate ---

[Zac Goldsmith]

I agree with the hon. Gentleman and will be making a similar point shortly. We need to look at that issue.

The bottom line is that we need to find a way of maintaining the two-tier system. I know that some within the black cab trade are calling for a mandatory five-minute period between booking and pick up to try to maintain the divide. I understand why that would work, and there is a strong case for it, but I worry that it would alienate—even infuriate—customers, who would not understand why it was happening. I understand that a similar mechanism has been brought in in New York, and there has been a considerable customer backlash there, which has been felt by the Mayor, who introduced the scheme, and whose popularity has been collapsing as a consequence.

[Mark Field]

I want to touch on the issue of choice, which my hon. Friend has raised. One of my concerns about the black cab’s protected position is that we hear voices saying that we should outlaw Uber and ban pedicabs. Could my hon. Friend give some indication of where he stands on both those issues? Would such an approach be detrimental to consumer choice, or would it be the right way to protect the market?

[Zac Goldsmith]

I absolutely do not want to deny people the choice they clearly want and need in London. There is therefore no question of banning Uber, but there is a need for more clarity in the regulatory system. That is the point I will be making shortly, and I hope my right hon. Friend will intervene as I continue.

I am sceptical of the five-minute rule proposal, but I hope the Government will commit to working with TfL to urgently define what “ply for hire” actually means. For the black cabs, their customers and London generally, that cannot remain the grey area it is today.

More broadly, the Government need to address the issue of the sheer number of cabs in London, which the hon. Member for Easington (Grahame M. Morris) mentioned. In August, there were a staggering 86,500 minicab drivers in London—a 46% increase in just five years. That number grows by more than 1,000 every month, with obvious congestion and air quality implications. That needs to be addressed, and we need to take a view on the private hire vehicle trade’s carrying capacity in London.

While few people want to see the end of Uber—I absolutely do not want to, because Uber does innovate and provide choice—there is no doubt that standards need to be raised. That view was shared by the overwhelming majority of respondents to a YouGov poll the other day, 62% of whom said they would like a higher standard applied to private hire vehicles and to Uber in particular.

For instance, the Government should, in my view, require all minicab companies to take out fleet-wide insurance policies to guarantee consumer safety. That does not seem an unreasonable request, and TfL has confirmed to me that it regularly repeat-catches uninsured drivers. Drivers should have a basic geographical knowledge—not the knowledge, because that would be unrealistic, but a basic grasp of London. They should also be required to have at least a basic command of the English language. TfL is looking closely at that, too, and we will hear in the next few weeks where it has got with that.

Uber fares are generally low, but in times of need—as we saw during the recent tube strikes—those prices escalate out of all proportion. In some cases, there was a 300% increase. What, if anything, do the Government believe should be put in place to protect consumers against such price surging?

There are also concerns about Uber’s corporate behaviour. For instance, Uber enjoys a significant price advantage by not paying UK corporation tax, because jobs are booked through the Netherlands. Despite Uber being a $50 billion company, its drivers earn far less than the London living wage; in some cases, they earn a lot less than the minimum wage. Drivers are self-employed, as with most minicab services, but the risk is that Uber’s model is depressing fares to unsustainable levels, and that also needs to be looked at.