Taxi and Private Car Hire Market

Lord Rosser Excerpts

Tuesday 20th October 2015 Lords Chamber

[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.