LCDC RESPONSE

The IIA recognises that “these proposals were aimed at improving passenger safety, maintaining a clear distinction between taxi and private hire trades and improving the quality and accessibility of private hire services.” The taxi trade is directly impacted by any change to the existing distinction between the two trades. Yet, the IIA did not engage with this important stakeholder and as a result, did not consider how this “receptor might be affected by a proposal or impact”.
Thus, it is our opinion that this assessment is fatally flawed as the taxi trade were not invited to participate. This has little bearing on “passenger impacts”. However, the “operator impacts” and “driver impacts” are not mitigated by any impacts on the taxi trade. It is highly likely that any negative impact on PH operators will have a positive impact on the taxi trade.The two-tier regulatory system is intended to provide a highly regulated (taxis) on-demand service to consumers, while a more lightly-regulated (PH) service provides a pre-booked service to consumers. This separation is necessary as regulatory costs imposed by the regulator mean that the taxi trade will be at a disadvantage in direct competition with the less-regulated, less-cost PH trade.
Therefore, we contend that unless a new IIA is be commissioned to include the taxi trade, only “passenger impacts” should be considered as both “driver” and operator” impacts are grossly over-stated by the omission of taxi drivers and operators among the stakeholders.
The IIA finds only two of the proposals among the whole that they assess to have a negative impact on passengers. In one case (Proposal 2) there is a “moderate adverse” on both health and equality; there is a “minor adverse” for passengers in regards of “quality”. With regard to proposal 10, a “minor adverse” to the passenger on “economics and business” is more than compensated by “moderately beneficial” impact on equality.
While we shall respond to specific proposal impacts, our rejection on the validity of the impacts on PH drivers and operators within the IIA stands.
It should also be understood that the LCDC supported and continues to support the TFL proposals in their entirety.
Proposal 1: operators must provide a booking confirmation to passengers containing the driver photo ID and details of the vehicle being used to discharge the booking.
The IIA finds that the adoption of this proposal provides benefits for PH passengers.
The IIA finds that there is an adverse impact on operators. However, this affects phone/office based operators more greatly than digital and part-digital operators. This is largely a cost issue because the former tend to be smaller operations. This should not cause this proposal to fail as safety aspects should be the primary concern of the regulator.
The adverse impact is less on digital and part-digital operators and thus is less about financial cost and more about hampering their ability to operate a near on-demand service. However, this departure from a genuine pre-booked service has a negative impact on the taxi trade.
Therefore, if all stakeholder impacts had been considered, the impact would be clearly beneficial.
PROPOSAL 2: Operators must provide booking confirmation details to the passenger at least five minutes prior to the journey commencing.
Health: The purpose of a time delay to allow a PH driver to pre-establish a route has not been recognised by this IIA. Therefore, the utility to the consumer has been understated as this benefit could possibly outweigh a small increase in waiting time.
There is concern that passengers may have to wait in an operator office, even if the car and driver are immediately available. It should not be beyond the regulator to exempt in-person visits to a booking office from the five minute rule.
Equality: The IIA identify an adverse effect on the grounds of personal safety, particularly when travelling at night. However, they have disregarded that near-immediate vehicle delivery encourages passengers onto the street to both book and wait for a vehicle. Traditionally, the PH customer waits inside homes, offices, nightclubs, etc until the vehicle arrives.
Near-immediate hire has several adverse implications for passengers. It encourages passengers onto the street and this leads to passengers waving smart phones at passing vehicles. This is likely to encourage touting by licensed and unlicensed drivers. It also increases congestion as PHVs drive very slowly along busy streets looking for their customer on the pavement rather than being given a specific address.
As such, the negative impact for passengers has been over-stated by the IIA.
Business and economy: While the negative impact on operators is justified to a degree, the positive impact on the taxi service is ignored. Additionally, the two-tier service did not intend for the pre-booked service to be a near-immediate service. If this had been the case, there would be no justification for a two-tier service.
Proposal 3: Operators will be required to seek approval before changing their operating model.
This IIA appear to have not considered the impact on the regulator of technological advancement. It has been acknowledged that technology moves faster than laws and regulations. While innovation is to be welcomed, the purpose of some recent innovation is to circumvent legislation and as such is akin to rent-seeking. It is then far more difficult for a regulator to correct such innovation than to prevent its use in the first place.
Proposal 4: Security for app based booking platforms.
The IIA has clearly and rightly identified the beneficial aspects of this proposal for the passenger.
Although there are obvious costs to operators, these costs are clearly justified.

Proposal 5: Operator must offer a facility to pre-book up to seven days in advance.
Passenger impacts: The IIA points out the benefits to disabled passengers but most operators already offer an advance booking service. However, this has implications for equality. The largest operator has no advance booking system and actually refuses any but immediate bookings. Almost one in five PH passengers has a disability and this group are more or less barred from using “digital-only” operators, including the largest PH operator. Thus, these passengers are being currently discriminated against by the PH trade. The only way to prevent this discrimination is by either applying this proposal or otherwise requiring medium and large operators to make 25% of their fleet wheel-chair accessible (as per the “future Proof” recommendation).
Proposal 6: TFL proposes to no longer issue licences for in-venue operators or temporary events.
Health: The IIA states there is no data available “about the number of in-venue operators” but TFL make information available that there are in excess of 300 of these operators.
The negative impact on passenger safety has been over-stated. The provision of a taxi rank at these venues would alleviate many of these safety concerns. Additionally, the objections to a “five minute rule” suggest that digital operators can supply a vehicle in significantly less than five minutes and their PHVs (along with all other operators) can be ordered by telephone/Smart Phone while the customer waits inside the venue until they are notified that their PHV is waiting outside.
This negates any proposed safety concerns and is likely to reduce touting by licensed and unlicensed drivers.
Operator impacts: While those operators operating “in-venue” will suffer adverse effects of ending in-venue offices, customer choice is effectively expanded by not having to choose a single supplier. Additionally, most in-venue operators pay rent to the venue and this cost is almost certainly passed to the passenger.
Any negative impact on an in-venue operator presents opportunity to non in-venue operators. Therefore, we reject the conclusion of an overall adverse impact.
Proposal 7: Operator must have a fixed landline telephone which must be available for passenger use at all times.
The IIA clearly identifies the benefits of this proposal to drivers and passenger, particularly disabled passengers.
While adoption of this proposal would add costs to operators, it is justifiable cost. In the case of small operators, we accept that these costs are relatively high. However, the majority of small operators already rely on such a telephone booking service for passengers ordering cars. Therefore, while these costs are high, they are already being incurred by these operators and this proposal is unlikely to increase such costs.

Proposal 8: Operators must not show vehicles being available for immediate hire, either visibly or virtually via an app.
Passenger impacts: The IIA identifies a minor adverse impact on convenience and security. We dispute this conclusion. As noted by the GLA and confirmed by TFL, the vehicles shown as available on a smartphone screen are often not an accurate representation. Therefore, the passenger could well have a false sense of security and be inconvenienced by such misrepresentation.
Operator impacts: It is not disputed that there will be a negative impact on operators but this goes to the heart of the justification of a two-tier regulatory system. Only taxis were intended to offer an on-demand system but smartphone technology effectively enables PH operators to offer an on-demand service. Effectively, viewing the screen is a virtual substitute for looking along a street for a taxi with lit hire light and the push of a button replaces the raised hand to flag down a vehicle.
Added to this, the largest digital operator objects to the “five minute” rule because they can supply a PHV in less than half that time.
Any adverse effect on operators will be negated by a similar positive effect on the taxi trade as a result of re-instatement of the two-tier regulatory system.
Proposal 9: Operators will be required to provide specific information including details of all drivers and vehicles to TFL on a regular basis.
The IIA clearly sets out the positive effects for passenger safety that this proposal would afford.
Ensuring passenger safety is, or should be, the first consideration of the regulator.
Proposal 10: Operators must specify the fare prior to the booking being accepted.
Driver impacts: The adverse effects identified are over-stated. Current regulations assume that a PH driver requires time to plan a route before collecting a passenger. Therefore, a change of destination en route would present a larger problem to a driver than a recalculation of a fare; a fare that in many cases could be determined by the operator rather than the driver. Any contract for hire is between passenger and operator and not between passenger and driver and so any change in fare should be set and agreed between the passenger and the operator.
Passenger impacts: The IIA correctly identifies the benefit to the passenger of fare transparency. This goes to the essence of the PH Act. The intention was for PH passengers to agree a fare in advance, while taxis operate on a tariff based on a hiring charge plus time elapsed/distance travelled. For this reason, taxi fares are set by the regulator and not the driver and also why extensive topographical knowledge is required of the taxi driver.
App technology has allowed the operator to charge in a similar fashion to taxis but without the passenger safeguard of the regulator setting fares. It is thus left to the passenger to provide her own safeguards with regard to reasonable charges. This is made more difficult if a fare cannot be agreed at the point of booking. Currently, the fare can be and is changed by a digital operator mid-journey and this appears grossly unfair on the passenger. This proposal merely adapts regulations to prevent operators utilising technology to circumvent the intentions of the regulations.
Set against the suggested adverse impact on operators, should be the positive impact on the taxi service. The two-tier regulatory system places far greater costs on the taxi service than it does on the PH service. Therefore, the taxi service is extremely disadvantaged in direct competition with the PH service. Operating a similar pricing system brings the PH service into closer competition with the taxi service.

Proposal 11: Operators must record the main destination for each journey which must be specified at the time the booking is made.
The IIA identifies benefits for the passenger and adverse effects for operators. There are clear advantages for passenger safety and minimal costs for operators. The main adverse impact is on digital operators and this is due to operators using technology to operate in ways that original regulation neither took account of, nor intend. This proposal does no more than to correct a reduction in passenger safety created by new technology. The impact on operators is a cost that must be borne in the interest of passengers.

Proposal 12: Harmonise retention periods for records.
The IIA has no comment on this proposal. We support the proposal.

Proposal 13: Limit on the number of business names attached to each operator’s licence.
The IIA identifies this proposal as neutral. There are some passenger benefits. Multi-branding is a well-used tactic to create artificial brand loyalty. A passenger, for various reasons, may not wish to do business with a particular supplier. The use of various names by an operator could confuse a passenger into unwittingly using an operator that they specifically did not wish to use.

Proposal 14: Specific requirement for an English Language test.
The LCDC support this proposal. As the Mayor has already approved this measure, subject to TFL Board approval, and the benefits to passengers is obvious, it appears un-necessary to comment on the IIA.

Proposal 15: Drivers to work for one operator at a time.
We agree with the findings of the IIA. However, at least one safety consideration has been ignored and this concerns the general public as well as passengers. It has in the past been general practice for a PH driver to operate a means of communication with the operator, be this two-way radio, mobile date unit or smartphone.
However, there are two new considerations. The first is direct communication now exists between driver and passenger. The second is that many drivers will have not one device for receiving fares and communicating with an operator and/or passenger, but as many as five different devices at any one time. Add to this, a reliance on satellite navigation, as opposed to a pre-planned route. These are not passive devices and each will demand some of a driver’s attention and this clearly present safety issues.
The danger lies not in being tied to multiple operators at any one time as much as being “logged on” to more than one operator at any one time. Restricting the driver to one operator would be far less costly and far more effective to police than trying to enforce that a driver is only “logged on” to one operator at any one time.

Proposal 16: Driver and operator licence applicants to provide National Insurance Numbers and share with the Department of Work and Pensions (DWP).
There appears to be no impact statement on this proposal. This is unsurprising as it is doubtful that there would be any adverse impacts on passengers, or legitimate adverse impacts on drivers or operators.

Proposal 17: Vehicle licence to be revoked if driver licence revoked.
The assessment finds this would be a minor adverse implication for drivers.
In the specific event of a PH drive licence revocation, any hardship imposed on the driver as a result of vehicle revocation will have been brought on the driver by his/her own actions or inactions and any ensuing hardship should not be considered by the regulator.

Proposal 18: Checks on convictions of operator staff.
This proposal makes eminent sense. A chain is only as strong as its weakest link. It appears anomalous that both operators and drivers are checked but not the operating staff. This is of particular relevance with staff involved in operations carried out at “satellite offices” and at “special events”.

Proposal 19: TFL stop accepting payment by PO and cheque.
Once again, there is comment from the assessors. Presumably, this is because there are no impacts on passengers, drivers or operators.

Proposal 20: Hire and reward insurance to be checked at point of licensing and must be in place for duration of vehicle licence.
This is only considered as “minor beneficial” due to lack of data. However, continuous insurance cover must be of great benefit to passengers, rather than “minor beneficial” identified in this report. One can only assume that the assessors have not taken into account the near-impossibility of ensuring that H&R insurance would otherwise be in operation when the driver is transporting passengers.
As to impact on drivers as a result of “seasonal work”, neither a taxi driver and vehicle licence, nor insurance, take account of whether the driver works part or full-time and it would be inequitable for a PH driver to be treated differently.

Proposal 21: Drivers to carry or display a copy of insurance at all times.
There appears to be no assessment of this proposal. This is unsurprising as the law requires this of a driver, irrespective of driving a PHV. However, this should be a specific requirement of the licensing authority, similar to the requirement on taxi drivers and vehicles.

Proposal 22: Hire and reward fleet insurance in place by operators.
While we accept the adverse findings of this assessment, we would point out that many taxis are fleet-owned and therefore are subject to the same adverse conditions.
Weighed against this adverse impact, and not apparently considered by the assessors, is the way in which this assists enforcement. With fleet insurance, this would require only annual production of an insurance certificate and occasional inspections.
The cost of hire and reward insurance (the GLA found this to be 500% higher than domestic insurance at entry) is extremely high. There are recorded failings of digital operators to make adequate checks on vehicle insurance (see The Guardian expose). Drivers have been known to take out hire and reward insurance on instalments and change to a domestic policy after presentation of a certificate to an operator. All of this presents difficulties of compliance and enforcement.
If left to the responsibility of drivers, as per Proposal 20, this would require much greater inspection and as a result, much greater enforcement costs. These costs should be discounted against the additional costs to operators.

Proposal 23: Consideration of additional categories of operator licence type.
The assessment finds it beneficial to offer discounts to encourage zero-emission vehicles. As most PHVs are driver-owned rather than operator-owned, operator licence discounts would be unlikely to have any significant impact.
However, The Mayor’s “air quality” plans intend to make new taxis zero-emission capable by 2018 and provide disincentives for other, older vehicles. Presumably, there is the same intention for new PHVs, in which case there appears no need to encourage such change via licence fee discounts.
Despite the adverse impact on operators, it seems equitable to have at least two tiers of licence fees. It appears grossly inequitable that an operator with 20,000 vehicles and all the additional compliance and enforcement cost entailed, should be paying the same fee level as a single vehicle operator.

Proposal 24: Controls on ridesharing in licensed vehicles
Ridesharing in PHVs should be banned rather than controlled. The law on “pre-booking” supposedly allows a driver to compute a route before picking up passengers. A PHV may carry up to seven passengers. To compute up to seven separate routes before picking up, even with satellite navigation, would be impossible for the driver.
The potential for complaints to the regulator is huge. For example, a situation that brings up to seven strangers, of mixed sex, often late at night and alcohol-fuelled, lends itself to conflict and dispute, both among the passengers and between passengers and drivers.
Ride-sharing has the potential to create serious and costly compliance and enforcement problems for the regulator.

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