London Assembly Call for Evidence Relating to Taxi and Private Hire Services: LPHCA Written Response

On 30^th November 2018 the LPHCA sent our written response to the London Assembly call for evidence relating to Taxi and Private Hire Services. The submission can be seen below:

Caroline Pidgeon MBE, AM
Chair of the Transport Committee
London Assembly
City Hall
The Queens Walk
London
SE12AA

30^th November 2018

Dear Caroline,

London Assembly Call for Evidence – Taxi and Private Hire Services – LPHCA Written Response

The LPHCA has over 200 operators as members currently with three-quarters of them based in London.  Our London membership works with, by employment or agency arrangements, between 15,000 and 20,000 licensed drivers.

At our recent Road Show and AGM, we received an unopposed mandate from members to make a significant response to calls for evidence and consultations.  So, whilst this response comes from the LPHCA, it includes viewpoints from many hundreds of operators and drivers in the capital, hence the lengthy responses on key matters.

As previously advised, I would like to thank you for inviting me to once again address the London Assembly Transport Committee on October 9^th; something that I have been privileged to do on several occasions dating right back to the very early Assembly days at Marsham Street.

As also advised in my last communication, being invited to give evidence is essential for the transparency, fairness and scrutiny of Transport for London Taxi & Private Hire (TfL TPH).

In my oral evidence, I mentioned that things have greatly improved recently in terms of communication, which it has radically, however throughout the traditional private hire industry (operators with staffed operating and call centres) in London, there is absolute despair and, in fact, little confidence in TfL TPH, its policy making and licensing management of the private hire vehicle (PHV) industry.

Engagement with TfL TPH
The LPHCA has for many years been meeting with TfL TPH alongside other Private Hire Trade Bodies on the regulation, standards and safety aspects necessary to deliver a fair and sensible regulatory process,which is ‘fit for purpose’ for the Private Hire industry in the capital.  During that period the LPHCA, other Trade Representatives and the wider industry has been wholly supportive of TfL TPH.

The current licensing and policy making regimes have however badly lost their way. As LPHCA Chairman and as someone who has campaigned for and led the industry into a regulatory framework since the early seventies,it is my duty to compile a lengthy and rather negative report on the current situation at TfL TPH.

The arrival, and in our view the mismanagement of, ‘App Only’ based companies by TfL TPH, has produced inappropriate policy decisions for the efficient regulation of our industry.  TfL TPH in recent times has produced ‘knee-jerk’ policies, that in many cases originate from calls by our direct competitors in the London taxi industry.

Policy Shaped by our Competitors and GLA’s Future Proof Inquiry

There is now significant evidence that fierce lobbying and blockades of the capitals streets by our competitors in the Taxi trade has been shaping TfL TPH policy, which is subsequently inflicted upon the PHV industry, but in many cases is not considered necessary for our competitors in the Taxi trade.  Some of these flawed policies and the inconsistency in which the Taxi and PHV industry is regulated in London, will be highlighted throughout this response to your call for evidence in this document.

Over the past few years and significantly this year the LPHCA has been contacted by many drivers and operators to say there are substantial issues at TfL TPH, alleging unacceptable delays, poor service levels and many unnecessary problems.

The root-cause of these problems is poor policy and in our considered view it started with the mis-management of ‘App-only’ PHV operators,some of whom have operated and conducted themselves in an entirely different way from London’s traditional PHV operators.

Rules about bookings and metering, which the traditional PHV industry had followed since the inception of licensing in London, were re-interpreted by TfL TPH to give ‘App-only’ PHV operators the ability to act in our view more like London Taxis than PHVs.  We broadly share the London licensed Taxi industry’s views on this.

Whilst TfL utilised the courts to determine metering on a legal basis, it u-turned on previous policy, that had been in place since the commencement of licensing in London, the same applied to the booking requirements for PHVs.

The GLA’s Future Proof – Taxi and Private Hire Services in London inquiry in 2014 did however bring some good policy decisions and outcomes, which have been implemented, however recent policy has been thrust upon the industry without the necessary dialogue with trade representatives and the wider industry.

Poor policy and the lack of dialogue has seriously damaged the licensed PHV industry’s traditional private hire businesses, which deliver essential service provision to local communities, businesses, hospital trusts,local authorities and those unable to easily use public transport.

Below is a list of the primary problems and challenges facing traditional private hire operators and their drivers, all of which in our considered view emanate from lack of dialogue and engagement.  This produces policy that as a consequence, is not fit for purpose, as it has in many cases been driven by protests from our competitors in the licensed taxi trade.

As a trade body the LPHCA generally supports London’s taxi trade and has total respect for the knowledge tested drivers.  We share their concerns about problems that some ‘App only operators’ and their working practices have brought into being, but bringing in one-sided regulations that are damaging the traditional private hire operators, who have been extremely compliant since licensing began, is not the way forward.

Current/Imminent Serious Problem Areas

• English Language Tests
• Operator Fees
• Sections of the ULEZ proposals

Future Damaging Proposals

• Congestion Charging PHVs
• Restricting PHV Work Areas
• Capping PHV Numbers

English Language Tests

TfL TPH’s policy on English language tests for PHV drivers is a classic example of policy being developed following a serious lack of proper engagement with Private Hire trade representatives.  The current English language requirements were introduced following claims by the licensed taxi industry that there was a problem with the English language skills of PHV drivers.

The bias of this policy is exposed by TfL TPH not requiring London’s licensed taxi drivers to undertake an English test.  If there was a wide-ranging problem (and we have seen no evidence that there ever was) insisting that over 100,000 PHV drivers undertake a test and 25,000 taxis drivers don’t need to do one demonstrates serious bias towards London’s taxi drivers.

As all London licensed PHV drivers have been subject to a topographical test, administered and audited by TfL TPH or have been working for at least ten years in the industry as a licensed driver, retrospectively testing licensed PHV drivers should have never happened.

Source GLA ‘Future Proof’ December 2014

5.26 Topographical testing for private hire vehicles is outsourced to a number of centres across London, many of which offer a same-day service. The test requires a candidate to demonstrate a competent level of English, the ability to look up and plan routes using a Greater London A-Z, and basic map reading skills.

Apart from the complaints from the taxi industry, we have seen no unbiased evidence of a problem regarding the English Language standards of London’s PHV drivers.  We have been unable to establish or source a single complaint to member operators regarding PHV drivers alleged poor English since licensing began.  We estimate that LPHCA member’s drivers alone undertook approximately 100 million journeys in the first ten years of licensing.

The LPHCA has always accepted that a licensed PHV driver should be able to communicate in a level of English that is appropriate to the job they do, the same principle of course, should apply to licensed taxi drivers.

The current testing regime is expensive, unnecessary and in our view discriminatory on ethnicity, age and disability grounds.

Given all PHV drivers would have undertaken a topographical test (as referenced above) or have been working for at least ten years in the industry as a licensed driver, the level of English language testing and the the failure to deliver what little was discussed with trade representatives (eg. grandfather rights and exemptions) has meant that we now have very serious issues to face.

The LPHCA estimates that around 20,000 perfectly good drivers, who comprise predominantly of older, ethnic and disabled drivers (many of them long-serving) will be lost to the PHV industry early next year.  The British Dyslexia Association (BDA) are amongst those seriously concerned.

Whilst this may please the London taxi industry and those who advocate restrictive practices, it will have a catastrophic affect on the many traditional private pire businesses, which deliver essential service provision to local communities, businesses, hospital trusts, local authorities and those unable to easily use public transport.

The potential consequences of persisting with this inappropriate English Language test will be unemployment, significant fare increases, lack of availability and the serious risk of safety being compromised due to lack of supply.

The GLA Transport Committee will be aware that the LPHCA organised a dignified protest at City Hall in December 2016, which did not inconvenience Londoners or others in the capital. Many Assembly members subsequently supported our call to scrap the current tests, for which we are very grateful.

Further lobbying by Assembly members, who have magnanimously put aside party politics, has led to the LPHCA bringing the GMB, the Private Hire Board and the Chauffeur & Executive Committee to discuss the issues directly with the Mayor, whom has kindly now met with us twice.

On each occasion the Mayor has wisely delayed the requirement date, however the English Language test problem will not go away,so we will be writing to the Mayor shortly to ask him to stop the flawed test, rather than tinker with or delay it again.

The primary issues are the retrospective testing of drivers and the inappropriate level of the testing, which as a consequence brings expensive costs alongside the completely unnecessary testing of drivers who are absolutely competent, many of whom have worked in the industry for a very long time.

Recommendation 28 of Professor Mohammed Abdel-Haq’s Task and Finish Group recent report on Taxi and Private Hire Vehicle Licensing commissioned by Government, which is currently with the Secretary of State for consideration states:

‘Licensing authorities must require that all drivers are able to communicate in English orally and in writing to a standard that is required to fulfil their duties, including in emergency and other challenging situations’.

The LPHCA concurs with this viewpoint, which will enable a standard of English language to be established for both taxi and PHV drivers. We have responded to the report by saying ‘We also feel that for certain recommendations like English Language an absolute standard should be put in place (nationally).

We would therefore like the GLA Transport Committee to recommend that TfL TPH engages with the PHV trade representatives to prevent a catastrophe next year and scraps the current requirements, which are not fit for purpose.

Operator Fees

The introduction of astounding fee increases for PHV Operators following a short duration consultation and no prior dialogue with PHV trade representatives, once again demonstrates poor policy being inflicted upon the PHV industry in a fait-accompli manner.

Dialogue, Consultation and Feedback

Whilst an eight-week consultation took place, the LPHCA and other trade representatives learned of the proposed fees after the consultation was published, having had no prior warning or discussion whatsoever.

Given the excruciating increases and structure of the fees, it was no surprise that TfL TPH had not discussed the proposals with trade representatives.

The consultation process took place during the 2017 general election and the associated period of Purdah and three bank holidays, so there were extremely limited opportunities to lobby key politicians. There were also technical flaws with the consultation website that erroneously on random occasions stated when the web form was submitted that the consultation period had ended and views submitted would not be taken into account.

In spite of the above, the private hire industry managed to respond, absolutely rejecting the proposals with an overwhelming majority.  Most of the pro responses came from the licensed taxi trade or commercial entities connected to it.

These matters were brought to the attention of the TfL Board by the LPHCA and the GMB Union as TfL TPH had recommended adopting the unprecedented and inflation busting rises for PHV operator fees.  The Board delayed making a decision until 15^th September 2017 but agreed to the increases in spite of the massive opposition from the PHV trade, with just very minor amendments to the original proposal.

The Board were shown a selected list of responders and their responses.  The quoted comments from responders were not proportionate to the majority of responses and several were from entities that would either commercial benefit from the proposals or they were from the London taxi trade.  Outside of the operator fee increases, PHV driver fees were not increased considerably and taxi driver fees were increased even less.

The LPHCA said this would damage the London PHV industry and we have sadly been proven right with many operators closing, or planning to close, many of which are family run, locally based and predominantly ethnic minority businesses.

Prior to these increases, operator fees had been frozen for many of the previous years and were £1,488 for operators of two or less PHVs or £2,826 for three or above PHVs, this for five-year licenses.

The table below shows in detail the staggering new Operator Fees and Increases

Anyone can see that very few businesses could be subject to such increases and survive or expand.

The first three bands for operators with less than 20 vehicles range from a decrease in percentage cost of 29.23% to a percentage increase of 112.31%.  It is fair to say that whilst not ideal this is tolerable.

The 21 to 50 vehicles operators are however subject to a percentage increase of 572.33%, an annual increase of £3,234.80.  For low turnover businesses this, at best, is harsh.

The 51 to 100 vehicle operators are subject to a percentage increase of 961.57%,an annual increase of £5,434.80.  For medium turnover businesses, for some this is at best burdensome but for others itis impossible to survive.

The 101 to 500 vehicle operators are subject to a percentage increase of 5561.71%, an annual increase of £31,434.80.  It has been estimated that companies in this band would need to increase turnover by around £275,000 to generate enough money to sustain such fees.

The 501 to 1,000 vehicle operators are subject to a percentage increase of 12285.00%, an annual increase of £69,434.80.  It has been estimated that companies in this band would need to increase turnover by around £500,000 to generate enough money to sustain such fees.  Our judgement is that only seriously well-funded companies could meet such costs.

In the 1001 plus tiers there are just a few companies and they have not complained about these rises.

The reason is simple and one of the many things that has been lost on those who proposed these fees.  Proportionally companies well above the baseline are paying far less per driver and their backers will probably believe that the rest of the industry will be seriously damaged by much higher fees per vehicle, which ultimately helps their businesses.

We will example the two companies that have declared around 5,000 and 40,000 vehicles respectively.

The circa 5,000 vehicle company will be paying £28 per vehicle per annum and the circa 40,000 vehicle company will be paying £14.50 per vehicle per annum.  An even bigger irony is that if these companies doubled their numbers to 10,000 and 80,000 the cost per vehicle would half!

When you look on a per annum basis, an operator with 1 vehicle would be paying £400 per vehicle, an operator with 11 vehicles would be paying £110 per vehicle, an operator with 21 vehicles would be paying £181 per vehicle, an operator with 51 vehicles would be paying £117 per vehicle, an operator with 101 vehicles would be paying £316 per vehicle and an operator with 501 vehicles would be paying £139 per vehicle.

From this you can easily see what a nonsense the new system is and sadly, this is not the end of the story of this wholly unacceptable operator fees saga.

Impossible Bureaucracy and Unnecessary Costs

Incredulously, as well as the staggering fees, the associated bureaucracy is also disastrous.

If you are trying to get a first-time licence, applicants are required to state the number of PHVs they will have available at any onetime and this should be for the duration of the five years (or shorter period) from the point of the licence being granted.

Nobody starting a PHV business is capable of answering this question accurately, which they are using to determine the level of fees.

TfL TPH guidance notes say:

Once licensed, it is a condition of the licence for operators not to have more vehicles available to them than the maximum permitted within their tier.

If an operator who holds a licence expects to have more vehicles available than the permitted maximum, they will need to apply for a new licence, although they may be entitled to a refund for their existing licence (see below). Having more vehicles available than are permitted by your licence is a breach of the licence condition that could result in the licence being suspended or revoked.

Moving between Tiers

As well as the above causing chaos, as it requires the need to apply for a new licence to move between tiers, operators are now constrained from running their businesses effectively. 

Operators can no longer expand without the onerous process of being re-licensed, with the massive overhead of all the bureaucracy and associated re-licensing costs.   

We now have a situation with LPHCA member operators who want to expand for the Christmas rush being sent letters telling them they will have to re-apply for their licence, even if a licence was issued just months ago and go through the whole licensing process again with the need to be re-inspected.  Not only is this futile and costly to both TfL TPH and the operator, it is a constraint on business.

Regulatory Impact

As a direct result of the regulatory impact assessment being undertaken ‘in-house’ and no meaningful engagement being undertaken with the PHV industry or trade representatives, the consequences (unforeseen by TfL TPH) of the new operator fees system are now being revealed.

Last Christmas a South London Operator, who had been trading for around 50 years, found themselves in the situation of not being able to take on drivers for the Christmas and New Year period when annual demand for PHVs peaks.

The company would average 80 to 90 vehicles throughout the year but take on an extra 20 or 30 drivers for the Christmas and New Year period.  Under the new tiered operator fee system they would firstly have to apply for a new licence, with all the associated bureaucracy and need to be re-inspected.  That in itself is unnecessary, however they then realised if they went into a higher tier, they would need to pay a £30,000 application fee, as well as a £24,000 instalment for a new five-year licence!

In simple terms a 100-vehicle company would have to make a £54,000 payment to increase their fleet by just one vehicle.  The member advised us that they would need to double their turnover and vehicles to around 200 drivers to make enough revenue to cover this.

They took the horrendously sad decision not to take on seasonal drivers because they would have become insolvent overnight.  The consequence was that regular customers could not be taken, which in turn potentially compromised passenger safety as they simply could not provide their usual level of seasonal service.

All of this and many more problems are a direct consequence of failing to engage properly with the industry, woeful policy and management decisions and putting in place a fees system that is simply not fit for purpose.

A Better Solution

The LPHCA accepts that operator licensing fees should cover operator licensing and enforcement, but the system introduced should be scrapped as soon as possible. We are not convinced that the funds obtained are solely being used for operator compliance.  We have asked TfL TPH to give us a clear breakdown of what operator fees are being used for to no avail.

A far fairer, less bureaucratic and simpler system that would enable TfL TPH operator licensing in London to be appropriately funded would be along the following lines.

There should be a fixed cost to apply for a licence, which would completely cover the application, inspection and issue of licence. All companies start-up with no drivers, so trying to base application fees on future numbers is irrational.

TfL TPH already take weekly uploads of the numbers of drivers available to operators.  This, of course, directly correlates to the size of any company at any given time, as well as matching the number of records that Compliance and Enforcement need to check at inspection visits.

We do not know why weekly uploads are required, but the fact that they are means there is already a better basis for operator licensing fees.

Licence continuation fees could be paid monthly, quarterly or even annually by variable direct debit based upon the number of drivers available, so companies with Apps would need to pay proportionately for all drivers that have their App.  This system would also completely negate the need to re-apply for licenses when vehicle numbers fluctuate seasonally.

In the case of the biggest ‘App-only’ PHV Operator, who claim they have 40,000 vehicles active in London, they would pay the licence continuation fees based on that number of vehicles.

The Private Hire Board and others are advocating a similar variant and the advantages include:

• A constant revenue stream for TfL TPH
• Far less administration and associated costs for operators and TfL TPH
• A system that is easily understood so operators can plan financially
• A system that is fair and proportionate to the number of vehicles being used
• Continuity of licences
• No further damage to operators

In addition to the above TfL TPH should seriously consider that operators who are subject to constant additional compliance activity, should pay for it by surcharge.

There would also be a considerable revenue stream available by licensing the large taxi operators who are currently not licensed but undertake millions of pre-booked journeys and this is something that needs urgently addressing.

The LPHCA has already engaged with the Competition and Marketing Authority, the National Audit Office and others regarding the damage that is being done to competition and effective business management by the current TfL TPH operator fees system.

We are also engaging with TfL TPH, but we want the GLA Transport Committee to actively look at what we have presented above as a basis for future operator fees.

ULEZ Proposals

The LPHCA has spent several years and had dozens of meetings with TfL’s ULEZ team, their engagement with us has been excellent.  The association also arranged and brokered meetings with vehicle manufacturers for the ULEZ team and we invited them to address, present to and meet operators and drivers at our Roadshows and other events, which many hundreds on average attended.

In addition to this we provided free space to the ULEZ team several times in our Roadshow’s Information Zone.  So the engagement has been significant and as a consequence far more workable outcomes and plans were agreed in a structured way to aid and assist the industry’s transition from generally green vehicles to extremely green vehicles.

Recent changes to what was originally agreed, will however, cause serious problems for drivers who purchased vehicles believing they would meet ULEZ requirements going forward.

Once again, we have to flag the different way that PHVs are being treated compared to our competitors in the London taxi trade.

Currently licensed London PHVs that are Euro 5 will face a £10 per day fine from April 2019, whilst a London Taxi that is Euro 5 can work without a fine until 2032.

During our many discussions with ULEZ it was an expectation that a licensed vehicle would be allowed to work out its full ten years.  For example, a brand-new Euro 5 London PHV purchased in 2015 will now face a punitive fine every time it enters the ULEZ zone.

Far more polluting London taxis however with far older vehicles will be able to work until 2032.

We are not calling for any extension to age limits,however we feel it is reasonable that PHV drivers that bought their vehicles with the expectation that they would be able to use them in compliance with ULEZ now have a serious problem.  We believe that Euro 5 London PHVs and Taxis should be treated equally.

Drivers tied into finance deals will also have great difficulty selling a vehicle that is no longer ULEZ compliant, so they need to run it until the working life of their vehicle or the ten-year age limit is reached.

The inconsistency in the way the PHV industry is treated is unacceptable and we appeal to Assembly members to review this and other matters in due course.

Congestion Charging PHVs

On the next page we have replicated our response to the TfL Consultation on Congestion Charging PHVs but before that is read, we must expose how once again the PHV industry is faced with disparity with the Licensed taxi trade. 

TfL’s Congestion Charge Team is at odds with the Acting General Manager at TfL TPH’s recent contradictory statement in edition 19 of their ‘On Route’ magazine, which unbelievably says:

“Like the Mayor I am very committed to ensuring we retain the two-tier system between Taxi and private hire and would like to see Taxi numbers start to increase”.

This statement absolutely contradicts the whole essence of the feeble argument for Congestion Charging PHVs.

The Mayor has stated:

‘There is an urgent need to tackle increasing congestion and toxic air in central London. Congestion causes delays to vital bus services, pushes air pollution to critical levels and makes too many places unpleasant for walking and cycling.Appropriate interventions are required to address these issues’.

The Congestion Charge Consultation pre-amble stated:

‘The Mayor’s Transport Strategy, published in March 2018, uses the Healthy Streets Approach to plan our streets and transport networks, which encourages people to use active, efficient and sustainable modes of transport, and reduce car use.

As part of this, we need to keep the Congestion Charge under review, to ensure it remains effective in reducing the use of cars in central London and helps create streets where people choose to walk, cycle and use public transport. 

We have found that average delays to journeys within the zone have been increasing.  This is partly because there are an increasing number of vehicles entering the zone which are exempt from the charge or which receive a 100 per cent discount.  Currently, only around 50 per cent of the vehicles entering the zone during charging hours are liable to pay the full amount.

As a result, we believe that it is necessary to make two changes to the discounts and exemptions available for the Congestion Charge. These changes are designed to reduce traffic and congestion which is expected to have a consequential beneficial impact on air quality and, in the case of updating the ‘green discount’, incentivise the use of low emission vehicles in the zone’. 

LPHCA Apolitical Declaration

Before going further, we wish to place on the record that the LPHCA is politically neutral and has always worked on an apolitical basis with all London Mayors and all mainstream political parties.

The above statements absolutely expose flaws in TfL policy,as on one hand a senior official is stating that the Mayor and he would ‘like to see Taxi numbers start to increase’.  Yet the Mayor stated ‘There is an urgent need to tackle increasing congestion and toxic air in central London’.

The Congestion Charge Consultation pre-amble stated ‘Average delays to journeys within the zone have been increasing.  This is partly because there are an increasing number of vehicles entering the zone which are exempt from the charge or which receive a 100 per cent discount’.

So here is the Dichotomy

PHVs are generally far cheaper and greener than London taxis, PHVs also do not cruise the streets for work, so in every sense they are far more environmentally friendly than around 96% of London taxis.  PHVs create far less congestion and by a long way their environmental credentials are therefore way ahead of London taxis.

Different parts of TfL can’t be saying different things to different audiences.

Calls to congestion charge and cap the number of PHVs, alongside wanting to see taxi numbers start to increase for our industry exposes two things: unfair bias towards taxis and hypocrisy towards our industry.

The proposal that London Private Hire Vehicles (PHVs) should have the congestion charge exemption removed but London Taxis would remain exempt and not required to pay anything is not fit for purpose.

Proposals and statements from TfL say they believe that it is necessary to make two changes to the discounts and exemptions available for the Congestion Charge. It is alleged that ‘these changes are designed to reduce traffic and congestion,which is expected to have a consequential beneficial impact on air quality and,in the case of updating the ‘green discount’, incentivise the use of low emission vehicles in the zone’.  We completely disagree with the exemption removal and set out some of the reasoning below.

TfL say that in recent years, they have seen a substantial increase in the number of PHVs in London and that more than 18,000 different PHVs now operate in the Congestion Charge zone each day during charging hours.  The LPHCA however believes that more PHVs means less private car movements.  TfL state they are proposing PHV Congestion Charging to help tackle the congestion challenge facing London.  The above assertions and assumptions are misleading as there is little credible research or evidence to support them. On the contrary, evidence we have had sight of, finds major flaws in the proposals, which seem to be based on many assumptions and a great deal of speculation, rather than hard facts, evidence or proof.

The LPHCA and others are very concerned with the potential removal of the PHV exemption, which we feel would be a measure that will harm, many individuals and businesses, increase costs and will not, in our considered view, meet any of the very few positive outcomes alluded to.

As the principal body that secured the exemption in the first place, alongside Trade Unions, the Private Hire Board and the Chauffeur & Executive Association, the LPHCA outlined why the exemption was needed at the time, to the then Mayor of London, Ken Livingstone.  We also spoke to his Transport Advisor Mark Watts (who heavily influenced the first ever Mayor’s Transport Strategy) and the then Chair of the Greater London Assembly (GLA) Transport Committee John Biggs.  We also attended meetings with the team that assessed who should be exempted from the Congestion Charge and set out the reasoning as to why licensed PHVs must be exempted.

Removing the Congestion Charging exemption would be extremely damaging to the London PHV Industry and would add extreme costs.  Such costs would initially need to be paid by registered keepers, drivers, vehicle hirers, replacement vehicle providers,in some cases by operators or in other cases combinations of all of these.  The bottom line is ultimately that the extra cost would need to be passed onto consumers. The administration and management of PHVs losing Congestion Charge Exemption in isolation would be very costly and time consuming.

PHVs are the main‘door-to-door’ element of the transport system that reduces car ownership and the number of vehicles in crowded towns and cities, therefore the concept of congestion charging a primary mode of essential transport is completely flawed.  PHVs are also the most affordable and available mode of‘door-to-door’ Transport in London and are widely used by disabled people, the elderly and the most vulnerable in society. 

Whilst new technology has seen an increase in the number of PHVs in Central London, technological innovation has been used to more dynamically allocate vehicles, which has massively reduced dead mileage and as a consequence reduced emissions too.

London’s PHVs are far more environmentally friendly, being on average 3 years younger than London Taxisand unlike Taxis, PHVs do not drive around the capital’s road network seeking work.  As PHVs are currently considerably cheaper than Taxis, the difference between the price of a London Taxi and a London PHV will close dramatically if the London PHV Exemption is removed.  Some journeys could increase by around 300% if they were subject to the congestion charge,with fares varying widely from company to company, based on where their primary operating area is.

Whilst it is being proposed that wheelchair accessible PHVs would retain their Congestion Charge exemption,the vast majority of disabled passengers are not wheelchair bound and Sir Bert Massie of the Royal Association for Disability Rights (RADAR) stated to the government’s Transport Select Committee circa 1994 that many disabled passengers prefer ordinary PHVs to purpose built wheelchair accessible vehicles.

London Taxis, under these proposals, would not pay any Congestion Charge, so there is significant evidence to support the assertion that the PHV sector is being unfairly discriminated against in several ways.  

Firstly, these proposals would create a market distortion that we believe could and would be challenged under competition laws and state aid regulations.  Secondly, because of the diversity of PHV drivers being predominantly ethnic and from lower socio-economic groups, there would be serious equality and discrimination issues.  Thirdly, the impact on many elderly, vulnerable, disabled* and‘less mobile’ passengers could be considerable, not only in cost but also availability if PHV drivers did view the congestion charge zone as a ‘no-go’area due to cost.

* Except for purpose built wheelchair accessible PHVs

The regulatory Impact Assessment by Mott MacDonald (which can be viewed via the URL below) shows few potential benefits, alongside a host of potential negative impacts on PHV Operators, Drivers, Vehicle Owners and consumers.

https://consultations.tfl.gov.uk/policy/private-hire-charge-exemption/user_uploads/changes-to-congestion-charge-scheme-integrated-impact-assessment.pdf

There is little or no hard evidence to support anything other than ‘a very minor at best’ reduction in congestion.  As industry experts the LPHCA cannot foresee any reductions in congestion and a comparable modal switch would simply mean using the far more polluting (on average) London licensed Taxis.  People often use PHVs because they do not have a car, they need to make a‘door-to-door’ journey or because they are unable to use public transport for a variety of good reasons.

As PHVs reduce congestion and are far more environmentally friendly than the vast majority of London Taxis, we can only conclude that this measure would discriminate in favour of London Taxis and that TfL would be using regulation to raise money and / or change market share by stealth.

There are a number of very questionable assumptions throughout the impact assessments.  For example Cambridge Economic Policy Associates (CEPA) have suggested that ‘those operators who are able to specialise their fleet will be able to minimise the costs associated with the removal of the exemption’.  We do not believe this is possible.

It is assumed by CEPA that ‘only larger operators with over 500 PHVs will be able to do this’.  The larger operators we have spoken to say it isn’t possible and we agree because PHV drivers rarely have predictable or the same journey patterns.>

CEPA analysis also assumes that ‘The cost of the charge will be spread between PHV passengers(across multiple passenger trips), PHV drivers and PHV operators’.  This poor assumption implies that passengers who don’t go into the congestion charge should subsidise those who do, which we consider extremely unethical.

Prior to, and during the Olympic and Paralympic Games, TfL and the Olympic Delivery Authority engaged with the PHV industry to understand how the industry works and how best PHV operators could prevent problems and provide solutions to help deliver trouble-free transport for the Games. 

This engagement gave those in the respective organisations the ability to put forward proposals that contributed to delivering the best Olympic Transport provision ever in the 2012 Games.  The LPHCA and PHV operators went to dozens of meetings and gave many constructive ideas that were taken up.

By contrast, the industry found out about the proposals to remove the congestion charge in the media. The engagement with the trade on this matter by comparison was miniscule and came mainly in the form of eleventh-hour work by Mott MacDonald and Cambridge Economic Policy Associates (CEPA).  The PHV industry and its wealth of expertise has simply not been engaged with properly.

It is therefore not surprising that congestion charge exemption removal proposal is not fit for purpose.  There are many ways to improve congestion in London and to improve air quality, which the PHV Industry has done ‘year-on-year’ since it has been licensed.  Not engaging with us in the considered way that took place prior to the Olympics, shows serious flaws in the policy making hierarchy who are pushing for this proposal to happen.  It is no surprise that London Assembly Members have recently supported a motion that got cross-party backing not to remove the PHV Congestion Charge exemption by a massive majority.

The PHV Industry in London,is an exemplary example of a regulated industry that has risen to the challenges of becoming greener and more environmentally friendly.  At our 2018 Road Show on 27^th September 2018, we had on display the very latest electric, hybrid and fuel cell vehicles.  We also had representatives of TfL’s ULEZ team present, as well as Source London who are a London-wide electric vehicle charge point network and both were key-note speakers.

The LPHCA demonstrates with actions and words its commitment to environmental improvements, but the Congestion Charge exemption removal proposal flies in the face of the clean and green PHV industry’s ambition for these aims.

If the industry is subjected to the additional costs that it would need to meet by removing its congestion charge exemption, its move to even more environmentally friendly vehicles will be seriously inhibited, so the proposal is self-defeating.

We hope that this consultation response is listened to, otherwise London’s PHV industry will have no choice but to challenge these proposals should they move forward.  As a trade body we have already had dialogue with the Competition and Marketing Authority (CMA) on the competition aspects and we are also in communication with disabled groups and their key representatives to make them aware of the cost and supply implications.

We sincerely hope that we are listened to and these potential extremely damaging proposals are dropped,so we can engage on how we can actually reduce congestion and improve the air quality in London, which we believe will be compromised if these flawed proposals progress any further.

[END of LPHCA Congestion Charge Consultation Submission]

Restricting PHV Work Areas

A policy document was put forward by TfL TPH to address so called ‘cross border hiring’ to deal with licensed drivers working via Apps travelling into areas they are not licensed in to show themselves for work.

The proposal for drivers dropping out of area to return empty to the area they are licensed in after completing a job, is not the solution.  This will reduce earnings, cause much dead mileage and is not the way to deal with drivers showing themselves as available for instant work outside the area they are licensed in, which is the real problem.

As with matters mentioned previously, no dialogue was held whatsoever by TfL TPH with PHV trade representatives before this policy was put forward and once again the policy is one that the taxi industry has advocated for us, its competitor private hire.

A far simpler solution is to not allow PHVs to show themselves as available on apps for instant bookings outside of the area they are licensed in.

Traditional PHV operators have always taken pre-bookings from areas that are well outside the areas they are licensed in.  The cross-border issue is really about PHVs showing themselves via Apps for instant bookings anywhere they want to, which we agree is wrong.

Simple technological solutions are available to solve this problem, as App-using PHV operators can geofence their Apps, so that their drivers can only show themselves as available in the area they are licensed in.

The extremely ill-thought through proposal to restrict where PHVs can pick up and drop, is anti-competitive, protectionist, un-environmentally friendly and safety compromising, furthermore it would be extremely costly, as well as difficult to enforce and regulate.

The proposal would also increase dead mileage, make the industry far less efficient, increase costs and potentially lead to demand outstripping supply,which has serious safety implications.

Capping PHV Numbers and Driver Shortages

As predicted by the LPHCA, PHV driver numbers are now dropping in London and we are confident they will continue to do so. When ‘App-only’ PHV operators arrived with significant sign up payments for drivers and free or cheap travel vouchers for the public, the act of ‘buying market share’ took place. This, of course, is not something that is sustainable and others that have tried similar business models in London have fallen by the wayside.

Buying market share comes at a price and when earnings inevitably went down and commissions went up, drivers naturally reconsidered what they were doing, particularly new drivers.

Some are toughing it out, but it remains our judgement that that the decline in numbers will continue.  What is clear is that many of the drivers who entered the PHV industry in London have another job or are simply drivers who work minimal hours.

The spurious and misleading numbers that are banded about by some in recent times of 120,000 ‘active drivers’ is absolutely misleading because for a great deal of time ‘active’ actually meant ‘licensed’and ‘licensed’ of course did not mean ‘working’.  We believe ‘active drivers’ should mean ‘working drivers’.

As of 17^th October 2018, there were 109,192 licensed PHV drivers in London and these are no longer being referred to as ‘active’ by TfL TPH thank goodness. There were also 87,485 Private Hire Vehicles licensed but only 70% of those were owned by drivers, so the driver-owned vehicles figure is around 61,000.  The remaining vehicles licensed,around 26,000, were rental.

You don’t have to be a mathematician to work out that if every available vehicle was being used only 87,485 drivers would be working but years of running a PHV company and dealing with hundreds of operators has given me the knowledge that around 20% of drivers are inactive across the sector at any one period of time. We can confidently say that the true average number of drivers currently working in any given week is around 60,000 to 70,000, with the likelihood that its nearer to the bottom end of that wide estimate.

At a recent meeting of LPHCA member operators,around 150 London operators were asked to raise their hands if they had enough drivers.  Not a single operator raised their hand.

As a trade body we know that the industry cannot meet the demand for PHV services.  The call for a cap on PHV driver numbers is therefore not justified.

The public have chosen PHVs as a preferable choice of transportation because it is affordable, door-to-door, reliable and much cleaner than many other modes of transport.

Capping the number of PHVs if adopted, could bring about shortage of supply and make it very difficult for hire and replacement vehicle companies to operate.  This in turn could leave consumers at risk of being stranded because of volatile and unpredictable demand factors, such as the weather and seasonal demands (eg. during Diwali, Christmas and New Year periods).

Local communities, businesses, hospital trusts,local authorities, those unable to easily use public transport and many non-car owners are absolutely dependent on affordable PHVs for a host of reasons.

Summary

The LPHCA would like to thank the GLA Transport Committee for inviting me to give oral evidence and for the LPHCA to submit this document, which is a lengthy but important response to your call for evidence because of the sheer number of London operators we directly represent as well as the high numbers of drivers we indirectly speak for.

I am also grateful to your Chair Caroline Pidgeon MBE for the time and consideration that is always given, alongside the objective assistance given by the Transport Committee and more widely Assembly members.

The industry has also got several challenges to deal with such as electric vehicles, training needs and other matters, which we would like to engage with the GLA Transport Committee on in the near future.

We will also be undertaking a forensic study of allegations of serious inconsistencies between the requirements for private hire against the requirements for Taxis, following many complaints from members.

Yours sincerely,

Steve Wright MBE, Chairman LPHCA