In the aftermath of Transport for London’s decision not to renew Uber’s licence, a lot has been written about the pros and cons of Uber. But how does the licensing scheme actually work, and what are the implications of the TfL decision for drivers, taxi firms and the public in other parts of the country?
In this post, we answer some commonly asked questions about the Uber situation.
- How are taxis licensed?
There are two types of taxi, Hackney Carriages (which have nothing to do with Uber), and Private Hire vehicles. The main difference between them is that Hackney Carriage drivers can pick up customers who haven’t booked, and Private Hire drivers cannot. In fact, it is a criminal offence for Private Hire drivers to ‘ply for hire’ to attract customers who have not pre-booked.
Local authorities license both the Private Hire companies (‘Operators’) that operate from their area, the drivers, and the individual vehicles. They have a broad discretion about the rules they use to license them.
- Here are Transport for London’s rules relating to operators, drivers and vehicles.
- By way of comparison, here are Birmingham City Council’s rules relating to all three.
What local authorities must do is try to ensure that the public are safe when in a private hire vehicle. The vehicles must be maintained well and meet specified environmental criteria, there must not be any serious concerns about drivers’ character or driving history, and operators must act responsibly towards customers, their drivers, and when taking bookings.
Operator licenses, drivers’ licenses, and vehicle ‘badges’ are granted for fixed periods. They can be revoked or suspended during that period. Or, as we have seen with Uber, a local authority may refuse to renew a license.
- Why has Transport for London suspended Uber’s Operator License?
According to TfL, its decision was taken for the following reasons:
TfL considers that Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications. These include:
- Its approach to reporting serious criminal offences.
- Its approach to how medical certificates are obtained.
- Its approach to how Enhanced Disclosure and Barring Service (DBS) checks are obtained.
- Its approach to explaining the use of Greyball in London – software that could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties.
It is easy to see how these might relate to safety and security.
- What can Uber do now?
Uber can appeal to a Magistrates’ Court within 21 days. Once the notice is lodged, Uber can continue to operate until the appeal hearing. At that hearing, the Magistrates will decide whether TfL’s decision was unreasonable. If it was, then Uber can have its license. If not, then the appeal is lost.
Either party can then appeal to the Crown Court. Again, Uber could continue to operate while this was being heard.
Alternatively, there is a general right of appeal to the High Court, if Uber felt that TfL had acted unlawfully. This method of appeal is rarely used, but will doubtless be considered.
So we can expect this to rumble on for a while.
Many operators will lodge an appeal, and use the time waiting for the full hearing to get their act together. We have already seen the start of this, with Uber offering to meet TfL and the Mayor of London for further discussions.
Appeals must be handled very carefully, and professional advice taken.
- What about the drivers?
Drivers are licensed as individuals, and can switch to other operators.
- How does Uber operate elsewhere?
In much the same way. In each area that the company operates, Uber has Licensed Premises, and nominally operates its drivers from those premises. However, Uber is a global company, which does not easily fit with the local regulation model we have in England & Wales. It is known to deliberately undercut rivals, and attract drivers with incentive schemes, to quickly gain dominance.
- Why is Uber’s presence in Birmingham and the West Midlands controversial?
There is no getting away from the fact that Uber has very many satisfied customers, and drivers who are keen to sing the company’s praises.
The controversy is really to do with the local authorities’ perceived inability to properly regulate Uber. Greyball brings its own problems. But so too does the way in which Uber uses its drivers. For example, many of the Uber drivers who collect passengers in Birmingham are licensed by Wolverhampton City Council. It is generally accepted that it is easier to gain driver and vehicle licenses in Wolverhampton than in Birmingham. These drivers are nominally operating from Uber’s Wolverhampton office, but seem to spend their time in Birmingham. Whether this is a deliberate approach by Uber, or just something it is unwilling or unable to prevent, is not known.
This matters because – to stick with this example – Birmingham City Council is unable to control the private hire industry within its jurisdiction. This undermines the entire system, and is replicated all over the country.
- Will other local authorities follow Transport for London’s lead?
Perhaps. The general view to date has been that there is little that local authorities can do about Uber’s bending of the rules, unless there is a change in the law. However, it is certainly possible that other authorities will be emboldened.
For its part, Birmingham City Council has issued a bland statement pointing out that Uber’s operator licence in Birmingham does not run out until February 2018. This is quite proper, as the Council cannot pre-judge an application that has not yet been made. But the decision will have to be taken quite soon.
- What is likely to happen in the future?
It may well be time for a look at the way in which taxis are licensed. Road haulage companies and drivers are used to a national system of regulation (which includes Scotland, unusually), and for which there is a separate tribunal system. Perhaps it would be sensible to adopt a similar system for taxi licensing.
For more information on all taxi licensing matters, please contact Regan or Gemma by email to firstname.lastname@example.org, or call 0121 201 3765.