A trade meeting chaired by Barry Sheerman MP highlighted the technological and regulative challenges faced by the 21st century cab industry and the need to persuade the licensing authorities to enforce the current taxi and private hire regulations
BARRY SHEERMAN MP hosted the meeting at Portcullis House, opposite the Houses of Parliament, and although not arranged to talk solely about hi-tech firms like Uber, it soon became clear that the ‘disruptive’ Californian app company is causing problems to the established taxi and private hire trade up and down the country. Not least it’s alleged willingness to thumb its nose at long established licensing regulations and use global finace investors to attempt city-wide cab monopolies throughout the UK.
WHAT ARE THE MAIN ISSUES FACING THE UK CAB TRADE?
FAILURE OF THE AUTHORITIES TO ENFORCE TAXI & PRIVATE HIRE LICENCE REGULATIONS
At the moment we are sitting here with a serious competitive disadvantage, because of the weak level of regulation from Transport for London (TfL).
When I hear things about ‘disruptive’ hi-tech firms, I don’t consider drivers driving without any insurance as just ‘disruption’. It is illegal, plain and simple.
“And it is about time that the regulator woke up to this fact and took the same view.”
The fundamental legislation that was put in place to protect the travelling public is just being completely ignored.
And the way in which the regulator has allowed this to happen is quite appalling. I don’t accept that the regulation is not able to handle the new technology.
It’s not exactly rocket science. Every man and his dog has got an app. It’s about regulation and enforcement and at the moment, this is not happening.
Shared apps are potentially a huge risk and the authorities are simply doing nothing about it. Drivers using these are more or less plying for hire.
Not only are unidentified drivers and vehicles a risk to the public, but they also steal work from the legitimate trade who obey the licensing rules.
Licensed Private Hire Car Association
We have a two tier cab system in this country, which used to work really well. But now the regulators, including TfL, have folded in fear of the big judicial review.
Uber, is the first company to have been prosecuted in London for taking passengers without insurance.
“This is shocking and nothing is being done about it.”
The two tier system that we have works perfectly well.
We can’t have de-regulated companies burning up good regulations.
We need to fine-tune them and the licensing authorities need to enforce them. We mustn’t let big money companies get away with blue murder.
Licensed Taxi Drivers Association
We maintain that the 1998 Private Hire Vehicles (London) Act is clear and concise and that the following offences have been committed.
Uber vehicles are illegally plying for hire, taking bookings without an operator’s licence and accepting bookings otherwise than at a licensed operations centre.
“Uber London Ltd is also failing to keep a record of the prescribed details of each journey.”
Our lawyers have written to TfL on many occasions over the past 18 months, pointing out all of these offences and more, but, as with the meter issue, TfL is refusing steadfastly to take any action at all.
Wall Street finance in America is Uber’s biggest competitive advantage. And I think they have used it quite effectively.
Very simply put, they go into a city, and they make sure that the drivers that work for them earn 15-20 per cent more than if they worked for their old taxi or private hire company.
That’s it, regardless of the amount of work that they have for them.
“Uber just make sure that at the end of the week, their drivers earn 15-20 per cent more.”
And the money that is used to fund this, comes directly from Wall Street.
To emphasize this point, Uber has raised over $3 billion over the last few years.
But it doesn’t take anywhere close to that to develop the technology that they have, $80m tops to do all that they have done.
So, why does Uber need $3billion to run, what is in effect, a global taxi company?
What it is for, in my opinion, is to fund these operations at city level, in such a way to cripple the existing taxi industry.
Those competitors then have less and less capacity to deliver the work to keep their drivers.
And when you can’t deliver the vehicles, you have disappointed customers who go to Uber, who now have all the drivers.
Star Cars / Birmingham
Not only can they buy the drivers, which is what they do in Birmingham, they have also paid each driver £1,000 up front, with a £10-an-hour minimum guarantee and no fees for three months.
“So from Valentine’s day till now, Uber has taken 20 per cent of our fleet.”
And that reduces our availability to be able to respond at peak times. And this isn’t about companies saying they don’t want competition.
Uber aren’t just competitive, they are beyond competitive and are actually creating a dangerous outcome for the travelling public.
They are backed by Google and the money comes from Wall Street.
And that is the most frustrating thing. The fact that they have the amount of money that they need to ‘buy the market’ is to me the most unfair thing about all this.
SO WHAT IS THE SOLUTION?
Quite simply, the licensing authorities have to enforce the regulations that are already in existence.
I’m married and have got daughters and I want to have the assurance, that if they want to come home from a party, or a function at night, in safety, that when they use an app on their smartphone to book a vehicle to take them home, that the vehicle that turns up is safe, that the driver is properly licenced (and that his details haven’t just been sent over the internet) and my daughter or wife has got a fair chance of getting home unblemished. I don’t think that is too much to ask.
The authorities simply need to apply the existing regulations.
Now, Uber and other ‘disruptive firms’ are very proud of the fact that they link the customer with the driver. But private hire licensing requires an operator.
And I rather suspect that the licences they do hold are just somewhere where a licensing inspector can go and look at the booking records, which have passed directly from the server, or wherever they have got it hidden, to the driver, completely circumventing the operator.
“I would bet money that the app is not passing the bookings to the operator, who is then dispatching the jobs.”
But no one is looking, or think it is too complicated to look, because it is new technology and regulators don’t understand technology.
It seems to me, that if, as a regulator, they went in and said to Uber, ‘do you mind turning your equipment off in your office, would the work continue to flow?’.
If the work was still flowing to the driver, then it could not be passing through an operator.
EDUCATION AND SERVICE
I think, from the customer’s point of view, it’s a very likeable product.
But there are limits to their app, which I would always promote to our customers and our drivers, who might be thinking of going to drive for them.
The app can’t book jobs in advance and there are many limits to the service they offer.
And we also need to look after our drivers. Some companies are already experimenting with ‘fluid’ pricing schemes, to try and meet the demand for when more drivers are needed on the road.
To pay them more and compete with Uber’s surge pricing.
Steve McNamara (LTDA)
In order to pay for private prosecutions, defend our members and assume the role of regulator that the mayor and TfL have vacated, the LTDA has approved the use of £1million to fight the battle as far as it needs to go.
In the absence of a mayor or regulator that will enforce the law, the only option is for someone else to take up the challenge on behalf of hackney drivers and Londoners generally.
Protecting our livelihoods against this illegal activity is, in my opinion, the biggest challenge we have ever faced.
ALERT THE COMPETITION & MARKETS AUTHORITY
It’s only my opinion, it’s not a legal opinion, but it seems to me, that Uber’s way of doing business is anti-competitive.
Uber is using Wall Street money to make the cab market anti-competitive, with the explicit intent, in my opinion, of damaging the existing taxi and private hire market in the UK. So then they have a monopoly going forward.
They really do need to be stopped somehow.
WHAT WILL HAPPEN IF NOTHING IS DONE?
In five year’s time, Uber could have a driverless brand on the streets of Birmingham, London, Liverpool etc and it will all be incorporated into Google Maps.
You will have driverless vehicles with no operator, being controlled from San Francisco going around picking everyone up and suddenly there is no British cab industry anymore.
Once they have destroyed all the cab companies in a city, they have their monopoly and they can do whatever they want.