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CAPPED NUMBERS: New research briefing outlines argument for and against capping of PHV numbers

A new parliament led research briefing outlines why there can be no capping of minicab numbers… for now.

The Frequently Asked Questions research briefing was produced for the House of Commons Library and covers hot topics from bus, taxi and private hire vehicle (PHV) sectors.

In the taxi section of the report it looks at a number of key issues facing the industry, including regulation of taxis and PHVs, limits on taxi numbers, ‘cross-border’ taxis, minibuses and complaints.

Can councils limit PHV numbers?

This is great question and was included in the research paper. There are several licensing authorities looking for localised power to limit the number of taxis and PHVs that can cover the demand of the area.

One example includes the Mayor of London calling on the Government to provide further legislative powers for Transport for London (TfL), so that they can cap the total number of PHVs in London.

However, at the moment, local authorities in England and Wales only have the power to restrict the number of taxis, but crucially, NOT the number of minicabs licensed in their area.

According to the report: “This power can only be exercised where it can be shown that there is no significant unmet demand for taxis in the area. There is no power to limit the number of taxis or PHVs working in London.”

In a bid to control the number of PHV drivers licensed in the capital they have tried altering the structure of licence fees paid by operators of different sizes to reflect the costs of compliance and enforcement activity. It was hoped that this would provide further financial incentive for operators to maximise the efficiency of their operations and minimise the number of vehicles they use across London as a whole.

Despite these licensing changes in the capital the number of PHV drivers is at a mammoth 98,892.

The report highlights why licensing regions may wish to have new powers saying: “Those who want to see local authorities given powers to restrict PHV numbers argue that the market, particularly in London, has been over-saturated and enables bigger operators to use their pricing to drive out smaller operators. However, taxi and PHV numbers have both declined across the UK since the onset of the Covid pandemic. Unless numbers recover, calls for a cap may be less urgent.

“There are other reasons why some have called for a cap. For example, in 2017 the All Party Parliamentary Group (APPG) on Taxis cited grounds of increased congestion and pollution in London. To address this, its July 2017 report called for TfL and the Mayor of London to have the power to cap PHV numbers (and for the same powers to be available to other mayors and Combined Authorities should they request it).

“In contrast, the Institute of Economic Affairs’ October 2016 report on the taxi industry argued that there “was never a sound justification” for quantity restrictions and that not only should there be no restrictions imposed on PHVs but that taxi caps should be abolished.”


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