History of the London Taxi and Private Hire Industry

Introduction

The London taxi trade is centuries old. The trade originally comprised of individuals who operated horse drawn carriages to tran class = 'article_segment'sport passengers. The taxi trade consists of the provision of drivers (taxi drivers) and cars for hire (taxis) where taxi drivers are permitted to ply for hire from taxi ranks and on the streets. Plying for hire exists is not defined in legislation. In 2014, the Law Commission described plying for hire as picking up passengers at taxi ranks and on the street in response to hailing.¹

The private hire industry was borne from the taxi trade and originated more recently. The private hire trade consists of drivers (private hire drivers) and cars for hire (private hire vehicles) where private hire drivers are precluded from plying for hire. Private hire vehicles must be booked for hire by customers in advance, through a request to private hire operators, who dispatch customer requests to private hire drivers. The private hire industry emerged when drivers circumvented the original ply for hire restrictions by enabling customers to pre-book their services.

Origins of taxi industry regulation

Regulation of the taxi trade may have begun in the seventeenth century, when King Charles forbade that any hired coach be used or suffered in London, but Londoners ignored the King.² In 1635, by proclamation, King Charles I, restricted the the number of hackney coaches to 50 and restricting them from transporting passengers less than 3 miles due to congestion concerns in the City of London.³

In 1637, coachmen commenced lobbying for exclusive rights to “ply for hire” in the streets.⁴ Their petitions offered financial contributions for the exchequer, streets fit for the Queen, and a small army if the King pleased.⁵ The King was persuaded and in 1637, he proclaimed that a few hired coaches were so very requisite for the Nobility that there should be a small competent number allowed for such uses.⁶ Thereafter, King Charles I issued Royal preferences on horse and buggy specifications.⁷

Following the execution of King Charles I in 1649 and the Restoration King Charles II in 1660, Charles II issued more licences and licensing fees and standards with a preference given to “ancient” coachmen or coachmen who provided services to King Charles I or King Charles II.⁸

In 1654 Oliver Cromwell’s Protectorate Parliament legislated to establish the Fellowship of Master Hackney Carriage Coachmen.⁹ The Act was in force for 3 years only, but was the first of all future Acts of Parliament to date, concerning horse drawn cabs, coaches and taxis.¹⁰

Modern regulation of the taxi trade in districts outside Greater London began in 1847.¹¹ District councils are the regulators of the taxi trade within their respective districts.¹²

Modern regulation of the taxi trade in Greater London began by virtue of legislation enacted in 1869,¹³ which came in to force on 01 January 1870.¹⁴ Regulatory provisions of the London taxi industry were further developed in 1934.¹⁵ On 03 July 2000 Transport for London (TFL) became the the regulator of the London taxi trade.¹⁶ Regulation by TFL currently includes the licensing of taxis and taxi drivers,¹⁷ the setting of fare tariffs,¹⁸ and Conditions of Fitness for taxis.¹⁹

Regulation of the private hire industry in London began in 1998.²⁰ Regulation of the private hire trade in outer London districts began in 1976.²¹ Regulatory responsibility of the London private hire industry was transferred from the Secretary of State to TFL in 2000.²² Regulation of the London private hire industry by TFL includes the licensing of private hire vehicles, operator and drivers.²³

Regulations require private hire operators to accept bookings from customers,²⁴ and for accepted bookings to be carried out by private hire vehicles driven by private hire drivers both licensed in London by TFL,²⁵ or a licensed taxi London taxi cab and driver.²⁶ Although the regulations contain no provisions concerning the status of the relationship between private hire operators and drivers in terms of employment, operation of the regulations naturally place private hire drivers in a position of dependency on private hire operators.²⁷

The regulations provide that private hire operators and drivers must be fit and proper persons to hold the respective licences.²⁸ An applicant for a private hire driver licence must also be of good character.²⁹ Guidance issued by TFL provides that to be considered a fit and proper person, applicants for a private hire operator’s licence are expected to demonstrate that they have complied with other legal requirements connected with running a business.³⁰ Applicants for a private hire driver licence must agree to an Enhanced Disclosure and Barring Service search of their convictions in the consideration of whether they are fit and proper persons, and of good character.³¹ TFL may suspend or revoke a private hire operator licence for reasons including new or undeclared convictions, and breaches of health and safety legal obligations.³² TFL may suspend or revoke a private hire driver licence where for reasons including that TFL is no longer satisfied that the licence holder is a fit to hold to hold the licence.³³

Private hire operators have been found by courts and tribunals to have operated unlawfully by misclassifying drivers as independent contractors as opposed to workers. Private hire operators subject to such judicial findings include large operators Uber³⁴ and Addison Lee.³⁵ Where private hire operators employ drivers as workers or employees, they are required to ensure that their drivers are paid at least the national minimum wage,³⁶ holiday pay,³⁷ and that drivers work no more than 48 hours a week without the express written agreement of the driver.³⁸

A private hire operator’s: (a) intentional or reckless failure to pay their workers at least the national minimum wage; and (b) failure to take reasonable steps to prevent workers from working above 48 hours a week without express written agreement of drivers; criminal offences.³⁹ In light of this, issues requiring investigation include whether TFL: (a) assesses whether applicants for private hire operator licences effectively propose to misclassify the employment status of their employees or workers and (b) has suspended or revoked private operator licences, or intends to do so, on ground that such operators are no longer fit and proper persons to hold a licence within the meaning of section 3(3))(a) of the Private Hire Vehicles (London) Act 1998 as a result of judicial confirmation of operators’ misclassification of drivers’ employment status, or breaches of drivers’ employment rights.