Taxi and Private Hire Vehicle Operators (Regulation)

Wes Streeting Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Wes Streeting (Ilford North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to make provision about the skills and knowledge required of a person driving a taxi or private hire vehicle (TPHV) and related responsibilities of TPHV company operators and service providers; to require operators of TPHV companies and service providers to hold specified types and levels of insurance; to make provision about the tax liability of TPHV companies and service providers; and for connected purposes.

I am grateful for the opportunity to present the Bill, and I am delighted by the strength of support from right hon. and hon. Members on both sides of the House, which is reflected, I think, in the attendance today.

The Bill seeks to put fair competition and passenger safety at the heart of the taxi and private hire vehicle industry in London and across the country. The advent of new technology in the industry is revolutionising the way people navigate our great capital city; indeed, it is revolutionising transport in cities across the United Kingdom and the world. At its best, disruptive technology drives innovation and increases competition, with enormous benefits for businesses and consumers alike. However, as we have seen on the streets of London, it also brings significant challenges. The Bill seeks to address some of those challenges, which have been neglected for far too long.

The debate about the future of London’s taxi industry has been unfairly characterised as a debate between those who support competition and innovation on the one hand and those who want to cling to the past on the other. That is lazy analysis. It is true that London’s iconic black taxi trade is at risk; indeed, I would go as far as to say that the threat to it is existential—but the cabbies I represent are not afraid of change and innovation, they are not afraid of new technology and they are not afraid of competition. However, they are finding it increasingly hard to compete in a changing marketplace with both hands tied behind their backs. [Interruption.] It is great to see even the Chancellor taking an interest in their plight. [Hon. Members: “Taxi?”] The Chancellor may need a taxi.

I represent many black taxi drivers; indeed, Ilford North was once known as “Green Badge valley”, and it is still not unusual to see taxis parked on the driveways of Gants Hill, Clayhall, Barkingside and Woodford. I also represent hundreds of minicab drivers and drivers who work for new market entrants such as Uber. Like many Londoners, I use black taxis, particularly in central London. I also use minicabs and apps such as Uber locally. I welcome the choice and enjoy the benefits of competition, but I also recognise that the explosion in the number of private hire vehicles in London presents regulatory challenges and risks for passengers.

An investigation for LBC by Theo Usherwood exposed the ease with which individuals can access a private hire licence without adequate insurance. We know that a number of vehicles are already on the road without appropriate insurance. Last year, The Guardian was able to demonstrate how easy it was for an Uber driver to pick up a customer, having provided fake insurance paperwork via the company’s operating system. Some private hire vehicles are illegally plying for hire and touting, increasing the risk of passengers getting into cars driven by unlicensed and unknown drivers, with considerable risk to their safety. This is an illegal practice that the regulators ought to be acting a lot harder on. Guide Dogs UK found in a survey of assistance dog owners that 43.5% of respondents had been refused access to private hire vehicles, and it is all too common for lesbian, gay, bisexual and transgender passengers to experience discrimination.

Though I enjoy price competition as much as anyone else, is it really fair to expect cabbies to compete on fares while Transport for London continues to put up regulated fares for black taxis and apps such as Uber are able to drive their prices down, as profit-shifting allows them to avoid paying their fair share of taxes here in the UK? If we fail to act, London’s iconic black taxis will be driven off our streets. This is bad for competition, bad for passengers, and bad for London.

The Bill proposes action in three areas to improve passenger safety and make competition fairer so that our black taxi industry can continue to survive and thrive alongside minicabs and other private hire operators. First, on the issue of training, private hire vehicle drivers undertake only a rudimentary topographical test and in many cases do not undergo formal training. This sees many relying on sat-nav, which means that the risk of collision is increased owing to sharp braking or not focusing on the road ahead. The Bill proposes that in order to obtain a PHV—private hire vehicle—licence all drivers should complete an enhanced Driver and Vehicle Licensing Agency assessment, requiring additional skills such as how to drop off and pick up passengers and wheelchair exercises to learn how to support the disabled. PHV drivers should also undertake an assessment on the principle of plying for hire and touting regulations, so that there can be no excuses for breaching regulations. PHV drivers should be properly and fully trained and assessed in their obligations under the Equality Act 2010, so that protected groups such as LGBT people and disabled people can travel with confidence.

The second issue that the Bill seeks to address is insurance. The current system requires “hire and reward” insurance for all drivers where the responsibility for insurance rests with individual drivers. There is a higher cost for this insurance, which means that many private hire vehicle drivers can be tempted to opt for a cheaper form of insurance when accepted by a licensed operator. In order to resolve this issue, I propose moving to a system of operators’ insurance that places the responsibility on operators as a prerequisite for obtaining their licence. This will deliver three key benefits for passengers and the industry: guaranteeing that cars managed by the operator are insured so that customers have confidence that they are safe; reducing the cost of insurance through bulk purchasing, thereby delivering better value for money; and making the regulators’ task easier because checking a few thousand operators is easier than checking over 100,000 individual policies. Some companies, such as Addison Lee, already do this voluntarily, meaning that customers and businesses can book with the confidence that is sometimes lacking around private hire operators.

Finally, my Bill makes provision for the tax liabilities of taxi and private hire vehicle companies. It cannot be right that some companies in this industry are making huge profits but not paying their fair share of taxes. Lower fares are great, but some operators are frankly trying to drive their competition off the road through new apps by offering lower fares made possible by offshore tax arrangements, in effect robbing Peter to pay Paul. I pay particular tribute to my right hon. Friend the Member for Don Valley (Caroline Flint), who a week ago today brought forward her own ten-minute rule Bill on transparency for multinationals. Her proposals would be a refreshing step in the right direction.

This Bill would introduce a requirement for the Chancellor or the Financial Secretary to the Treasury to make an annual statement to this House on the progress of the OECD’s base erosion and profit-shifting project and the action that Her Majesty’s Government are taking to ensure that there is proper scrutiny in this area—though I hope that the Chancellor might be better at making progress there than on his own targets. It is a small measure, but it would indicate the view of this House that the Government need to do much more to tackle tax avoidance. These changes collectively would go some way towards levelling the playing field. TfL needs to go further than it currently proposes, and, in any event, these challenges also exist in towns and cities across our country.

Gwyneth Paltrow once said:

“Brits are far more intelligent and civilised than Americans. I love the fact that you can hail a taxi and just pick up your pram and put it in the back of the cab without having to collapse it.”

Perhaps more profoundly, Professor John O’Keefe, a Nobel prize-winning neuroscientist, said:

“Some of the best navigators in the world are London taxi cab drivers. They have to learn 25,000 streets and how to get from one to the other.”

I am sure that the whole House will agree that Brits are more intelligent and taxi cab drivers are the best navigators in the world. They are also small businessmen and women providing a world-famous service and struggling to make their families a good living. We owe them a chance to compete fairly, and we owe it to our great capital city to ensure that the iconic black taxi industry and the great iconic black taxi itself are not consigned to London’s history books. For these reasons, and so many more, I commend this Bill to the House.

Question put and agreed to.

Ordered,

That Wes Streeting, Lyn Brown, Neil Coyle, John Cryer, Clive Efford, Mr David Lammy, Kate Osamor, Joan Ryan, Mr Virendra Sharma, Mr Gareth Thomas and Mr Charles Walker present the Bill.

Wes Streeting accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 22 April and to be printed (Bill 154).