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WHY?  Transport for London (TfL) has seen a huge drop in revenue and desperately needs money to help build up its piggy bank. Central government has taken away its £700m annual subsidy and a fall in people using buses and the Tube will, it is estimated, lead to a £400m hole in the budget of the licensing authority.


London bus revenues have dropped

Guess who TfL thinks should pay more to get their finances back into the black? If the private hire trade pays, fantastic.

If not, minicab firms struggle and close down and more people use TfL’s transport options and ticket revenue starts to recover anyway. It truly is win-win – except for the private hire industry of course!


OPERATOR FEES INCREASE  Transport for London hinted in Sadiq Khan’s ‘Taxi & Private Hire Action Plan’ in September 2016 that private hire operator fees would have to go up to pay for 250 new compliance and enforcement officers. But, the amount demanded has shocked most within the capital’s minicab trade.


Mayor Khan’s Action Plan called for higher operator fees

For instance, operators of firms with between 11 and 1,000 vehicles have seen their five year licence fee go up from £2,826 to £6,000 and £350,000 respectively.

Forty London private hire firms have already gone out of business since the new charges started in October 2017 and the number of companies forced to close is likely to grow.

Greyhound Cars of Streatham, South London, has seen its operator licence fee go up to £30,000 over the next five years and could rise to £150,00 if it takes on just one more vehicle.

Boss Tom Leuchter said:

We have been established for 40 years and have been severely affected. And now, we cannot afford to expand more than 100 vehicles. Every year in the three months up to Christmas we increase our fleet by 20 to 30 vehicles, but we were unable to in December 2017 due to these costs.

Diane Kendall of Kendall Cars in Croydon agreed and said: “We had our 50th anniversary in business last year. But, I can’t see us lasting another year.”


Steve Wright & legal team outside the High Court

Commenting on the steep rise in operator licence fees, Steve Wright, chairman of the Licensed Private Hire Car Association (LPHCA) said:

I am shocked and disappointed by the extortionate increase in licensing fees. Many more operators will be forced out of business and jobs will be lost if these fees are not reversed. TfL do not understand our business and are hitting compliant operators that have worked hard to grow their businesses with massive and unjustified compliance costs.

“It is not reasonable or ethical for private hire operators, who in the main have a high level of compliance, to subsidise the enforcement costs of taxis and the on-street enforcement operations against illegal drivers and vehicles.”

Can anything be done? PHC attended the High Court on February 6 as the LPHCA sought permission to challenge TfL’s new operator fee structure and watched as judge Mr Justice James Dingemans agreed to a judicial review hearing in April.

The LPHCA now has to convince the judge that TfL’s increase in operator charges is excessive and illogical and from what PHC saw, Justice Dingemans did appear sympathetic to the plea that TfL’s company licence fee increases were not proportionate to the modest rise in charges proposed for taxi and private hire drivers and their vehicles.

But, Mr Justice Dingemans may not sit at the hearing in April and even if he does, he refused to grant the LPHCA ‘interim relief’ to operators whose five year licences are now coming up for renewal.

Justice Dingemans gave permission for LPHCA judicial review

This means that private hire operators will have to continue to pay the steep rise in licence fees and TfL now has every incentive to drag out the legal battle for as long as possible. Even if the LPHCA win the argument TfL is likely to appeal and drag out the legal challenge for many more years to come.

PRIVATE HIRE VEHICLES TO LOSE CONGESTION CHARGE EXEMPTION  This will happen as surely as night follows day. Not just because TfL wants to turn the financial screws on the capital’s minicab trade but because PHC has also seen written evidence that TfL plans to have private hire vehicle congestion charging up and running in London by April 2019.

In a letter to a GMB member, concerning his vehicle’s status with regards to ULEZ, a TfL contracts and operations manager replied: “Based on the information that you have provided, we can confirm that your vehicle is not subject to the Ultra Low Emission Zone and meets the emission standards. But, from 8 April 2019, you will be charged the standard Congestion Charge when travelling in the Congestion Charge Zone from Monday to Friday 7am to 6pm.”

This is surely proof that TfL intends to remove the congestion charge exemption for private hire vehicles?


David Beamer warns trade of CC exemption removal

David Beamer, managing director of the Brevia Consulting public affairs agency, which advises the Licensed Private Hire Car Association, certainly thinks so.

Speaking at a LPHCA meeting to raise money to fight TfL in court, Mr Beamer said: “I think that (£11.50-a-day) congestion charging for private hire vehicles is an absolute no-brainer for TfL and will be the big hurdle that you face this year.”

ENGLISH LANGUAGE TEST  This is now a done deal and new private hire driver applicants, as well as existing drivers applying to have their licences renewed, will now have to show they have an English language qualification or take a TfL-recommended exam costing between £180 and £300.

TfL and Uber have been locked in a High Court legal battle over the introduction of an English language test since October 2016 but Uber has now halted its opposition and withdrawn its legal appeal.


Uber has dropped English language test appeal

So, what comes next? Tom de la Mare QC, Uber’s defence lawyer at the High Court in March 2017, argued that London could lose up to 70,000 drivers: “If you include those who would be deterred from applying, based on figures from TfL’s own finance department”.

Mr de la Mare also pointed out that statistics from Trinity College in London showed that 45 per cent of private hire applicants were failing the B1 standard of English required by TfL.

Florence-EshalomiLabour Party assembly member Flo Eshalomi voiced her opposition to TfL’s language test in April 2017 and argued for a cheaper, more appropriate alternative:

It is of course vital that cab drivers can communicate with their passengers in English but the estimated £300 to take the test seems a disproportionate cost. Other tests cost just £25 and it’s time for the mayor to look into other options. We don’t want to see people losing their livelihoods.

A spokesman for TfL said the new English test would still be at a similar level to the B1 standard but that it, “Would include bespoke material with language and vocabulary that directly relates to the role and responsibilities of a private hire driver.”

TfL has also said that it is looking to bring in an advanced driving test for PHV drivers, costing around £150, but has so far not said what will be included or when it will be introduced.

WHAT IS THE RESPONSE OF THE LONDON PRIVATE HIRE TRADE?  As expected, the capital’s minicab industry is up in arms over the plans to extort money out of operators and drivers.

Eddie-Townson-2Eddie Townson, boss of Carlton Cars in Bexleyheath, said:

We as a trade have never faced anything like this. We have a licensing authority and a mayor that is clear that they want to destroy us. They are really, really pushing hard to destroy our businesses.

They simply don’t want us here. They want Uber and Addison Lee and a few odd small companies around but Gareth Bacon (London Assembly Conservative member) has made it very clear that the private hire trade will soon be an hourglass business. Some at the top and some at the bottom, but nothing in between.

“We need to get out on the streets and let the authorities know that we will not put up with this and that we will fight for the future of our trade. Let us join this battle and show them that we are not going to walk away from this fight without a struggle.”

The Private Hire Board, an umbrella organisation that represents both operators and drivers, is also seething with rage. A spokesman said: “It is time to stand up and be counted. To stop TfL bullying us all into submission and threatening the very livelihoods of each and every one of us with rules and regulations that are not fit for purpose in a modern private hire industry.

“Down the years we have adhered to every sensible regulation that Transport for London (TfL) has proposed for the trade. Often willingly going beyond what has been required by legislation, for the betterment of the trade and the service it provides to millions of people.”

The Private Hire Board spokesman added:

But, it has now got to the point where regulations are seriously harming our businesses and one can only assume that TfL acts in such a way because it is either too arrogant or just does not care that its haphazard approach to policy is causing misery and hardship to decent, hard-working people.

If this continues to go unchallenged, these policies will create serious hardship and potentially mass unemployment. Not only will the trade be decimated but the safety of the travelling public will also be compromised. We have to act now before it is all very much too late!

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PHC Magazine

PHC Magazine