29 Mar TfL accused of driving out small and medium sized PH firms

Transport for London have been accused of trying to drive out small and medium sized private hire firms with their proposed changes to license costs.

The proposals, which would see minimum costs per vehicle soar for many companies, directly benefit large companies like Uber with over 10,000 vehicles.

Fareed Baloch of Zoom.taxi slammed the proposed operator fee charges and said the industry was “heading towards a model where only a few big players operate,” and said it would “lead to a decline in competition.”

“The company which has 20 drivers will not hire 21st driver, so small operators will not try to grow, even at peak times such as Christmas and New Year. This is bad news for everyone but the owners of those big companies,” he said.

The charges are the subject of a challenge in the High Court where the Licensed Private Hire Car Association (LPHCA) won a judicial review after the proposals were announced after the consultation had started.

At the hearing the High Court Judge decided that “lack of sufficiency of information during the consultation” formed part of one of the groups for a judicial review. The second part was for the “improper purpose” for which the fees would be used for. Fees charged by TfL can only be used to cover the cost of the licensing, compliance and enforcement associated with that license but TfL have yet to explain why the costs of issuing these licenses would increase so dramatically leading to speculation they were using the industry as a cash cow to fill other black holes in its budget.

But it isn’t just the drivers and the company owners who should be concerned about this, adds Baloch.

“TfL have proposed a new series of costs which will cause devastation to the private hire industry in London and have a knock on effect to its many suppliers, from software providers like zoom to insurance companies and garages.

“There are people who will need to use minicabs regardless of the price increases, such as elderly people needing hospital appointments or special needs passengers. By removing competition TfL are allowing a monopoly to take place in London which will push up prices.”

The move has raised questions as to whether TfL really are taking this hard line on Uber which made headlines when it said it would not renew its operator license when the current one expires.

As it stands, the company will see its minimum cost per vehicle drop to £72.50 compared to £380 for a company with 21 to 50 cars. Its maximum price per vehicle would also be only £290 compared to an astonishing £2000 for a sole trader or £1,485.15 for the 21-50 bracket.

“TfL may have portrayed an image that they are somehow ‘at war’ with Uber but the feeling amongst those in the industry is that this is all a front; after all, regulators prefer to have one or two large companies to deal with than a lot of smaller companies who may not want to do as they are told,” said Baloch.

“Should these changes get the go-ahead then consumers can expect to see their local companies go out of business and owner-drivers be priced out of the market altogether.

“It is a fee structure designed for big money schemes like Uber – whose drivers don’t pay VAT and whose European wing is registered in The Netherlands.

“Consequently this makes it a matter for everyone who has ever or will ever use a minicab in the future and anyone connecting with the industry who doesn’t want to see it become a closed shop.”