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I’VE BEEN LIVING ON THE MOON, WHAT’S THIS PRIVATE HIRE OPERATOR FEE LICENCE CONSULTATION ALL ABOUT?  Transport for London (TfL) has launched a consultation on proposals to change the fees paid by private hire operators to cover the cost of licensing, compliance and enforcement activity.

The proposed new fee structure includes a new five ‘tier’ system (see below) which would replace the current two ‘tiers’ where companies with no more than two vehicles pay £1,488 and those with more than two pay £2,826 for a five year operator’s licence.

  • 0 – 10 (vehicles) £1,988
  • 11 – 20 £5,190
  • 21 – 100 £27,014
  • 101 – 1,000 £166,518
  • 1,001+ £166,518 plus £68 per vehicle

WHY IS TFL DOING THIS?  TfL’s general manager of its taxi and private hire directorate Helen Chapman said: “The operator fees system is no longer fit for purpose.”

Helen-Chapman-3Ms Chapman added:

It is only fair that licence fees for private hire operators accurately reflect the costs of enforcement and regulating the trade. The change to licence fees will also enable us to fund additional compliance offices to help crackdown on illegal and dangerous activity.

According to TfL’s figures, the number of licensed private hire drivers has gone up from 65,000 in 2013/14 to more than 117,000 today. The number of vehicles has gone up correspondingly from 50,000 to 87,000 in the same period.

A spokesman for TfL said:

Given the emergence of larger operators in recent years with, in a few cases, many thousands of drivers / vehicles working for them, it is clear that the current structure (where the most an operator pays for a five year licences is just over £2,800) does not now, in any way, reflect the true cost of compliance activity for larger operators.

Smaller operators are subsidising the enforcement and compliance work generated by the larger operators and we do not think this is fair.

“To illustrate the scale of this discrepancy, the largest operator currently pays the equivalent of just £565 per annum (over five years) for a licence which costs over £500,000 per annum to enforce.

“In addition, the current licence fee system has led to the situation where, for example, a medium sized operator with 15-20 vehicles is paying the same licence fee as an operator with several thousand vehicles, despite the fact that compliance activity and consequent costs in checking operator booking, driver and vehicle records for an operator with thousands of vehicles is considerably higher.

PHVS-in-Soho

“Overall, there has been a substantial increase in the cost of ensuring that private hire operators fulfill their licensing obligations and in tackling illegal activity to keep passengers safe. It is estimated that over the next five years, enforcement costs alone will reach £30 million from a previous estimate of £4 million.

“The total projected cost for licensing, enforcement and compliance for the taxi and private hire trades over the next five years is nearly £210 million.”

WHAT DOES THE LONDON PRIVATE HIRE TRADE THINK ABOUT THIS STEEP RISE IN LICENCE FEE COSTS?  PHC asked the two companies who will potentially have to pay out the most – Uber and Addison Lee – and received the following replies.

A spokesman for Uber told PHC: “We have previously supported the principle of larger operators paying higher fees and we are now looking at the detail in the new consultation of how this will be implemented.”

Michael-GalvinAddison Lee’s head of regulatory affairs Dr Michael Galvin said:

Whilst we broadly support the principle of relating fees to company size, we also feel that the TfL proposals need some reworking to ensure that it is equitable and reasonable.

PHC also spoke to a number of smaller operators and the consensus seems to be that the rise in licence fees is disproportionate and that if TfL does go ahead with the planned increase as proposed, the money may have to be recouped from private hire drivers in the form of an additional fee paid.

HOW DO I RESPOND TO THE CONSULTATION? – Anyone interested should visit: https://consultations.tfl.gov.uk /tph/private-hire-proposals and complete the online survey. You can also email TfL at: consultations@tfl.gov.uk or write to the licensing authority at: FREEPOST TFL CONSULTATIONS. All consultation replies must be received by TfL by June 16.

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PHC Magazine

PHC Magazine