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CROSS-BORDER: The elephant sized licensing loophole in the taxi industry room



Safety for both those working in the taxi industry and those using the service provided is said to be at the heart of the Government’s Best Practice Guidance and legislation, but there remains an elephant in the room...

Cross-border hiring.


Government sets the framework to which local licensing authorities must then follow. Many Local Authorities have shared their frustrations around Cross-border hiring. Cross-border hiring is a term used to describe when a taxi is lawfully used for Private Hire Vehicle (PHV) purposes in a district outside of which it has been licensed to operate.

This is seen as a problem in many areas because there are wide disparities in the conditions placed on licences. For example, a driver in one district may apply to be licensed as a driver in another district because there are lower standards in driver testing, cheaper licence fees or less rigorous/fewer pre-licence checks.


A good example is still seen as the City of Wolverhampton Council. PHV drivers see the council as a great authority to work under due mainly to their more liberal licensing standards. People as young as 18-years-old who hold a driver’s licence for at least 12-months are able to apply so long as they also pass medical and DBS Update Service checks. Licences are granted for just £64.

In comparison, Transport for London (TfL) requires an applicant to be at least 21-years-old, have had their driver’s licence for at least three years, complete topographical, speaking and listening tests, and sit a safeguarding course. It is estimated the whole process costs £477 excluding the cost of the medical.

Tell me more about Cross-border hiring

The term cross-border is also used when a PHV in one district picks up a passenger from another district. This is legal, provided either that the driver, vehicle, and operator are all licensed by the first district; or that the operator sub-contracts the booking to an operator licensed in another council area. This practice has become increasingly commonplace with the growth of app-based operator models.


This is problematic, because when a taxi or PHV is being driven for PHV purposes in another district, the local council has no powers to intervene if the driver contravenes any condition of the licence or provides a poor service to the passenger; all that can be done is to write to the authority that issued the licence, where this is known.


This practice is also seen as unfair on the trade in the local area, as they could face competition from drivers who may have paid cheaper licence fees or undergone less rigorous checks elsewhere.


These safeguards are rarely visible to customers, who therefore cannot make an informed decision to use the more heavily checked and therefore safer, albeit more expensive, option.


Who can change cross-border hiring rules?


Ultimately this issue will not be resolved until the Government brings in changes to legislation and gives councils powers to enforce against drivers and vehicles operating in their areas.

But there remains very little appetite from the Government for this, despite the ideal opportunity for reform presenting itself in the guise of the new industry Best Practice Guidance consultation.


Baroness Vere of Norbiton said in the foreword to the open consultation: “The importance of licensing authorities to the safety of the public and the effective functioning of the sector cannot be downplayed, and the intention of the guidance is to help licensing authorities in carrying out this important job.”

The Minister added: “We have a shared vision for a safe and thriving sector and it is key that this is at the heart of the policies of licensing authorities that regulate the sector.”


If safety is at the heart of Government guidance and legislation, why is cross- border continually ignored?

Portsmouth City Council’s licensing committee vice-chairman Scott Payter-Harris said that the number of out-of-area vehicles had increased ‘massively’ in recent years with taxi drivers looking for cheaper and quicker application processes overseen by other councils.


Portsmouth requires PHV drivers to use vehicles no more than four-years-old and also install costly CCTV. Drivers looking to swerve those requirements are going to other authorities with lower standards to then return to Portsmouth to work full-time.


John Garforth JP, Vice Chairman of the Institute of Licensing, and a Council Licensing Manager, told TaxiPoint: “Frustrations amongst licensing officers are growing and the Government seem resistant to change. New powers must be considered by the Government!


“By way of example, Greater Manchester is looking to secure, via Greater Manchester’s Devolution Trailblazer bid, a commitment from Government to devise an appropriate regulatory approach that will legally require that all private hire journeys within the Greater Manchester boundary must be undertaken by a driver and vehicle which are both licensed by one of the ten Greater Manchester local authorities. The effect would be to ensure that private hire operators with a licence to operate in one or more of the ten Greater Manchester local authorities will be required to serve any intra Greater Manchester journey request with a locally licensed driver and locally licensed vehicle.”


In London, more out-of-area PHVs are being noted by cabbies on the streets. Recent additional safety changes have pushed up the costs no-longer making TfL a ‘cheap’ licensing authority.


One London cabbie posted a picture of a City of Wolverhampton licensed PHV and said: “Passenger on board in St Martins Lane. Driver said he was working for Bolt because ‘it was okay’.”

Is it okay though? Or are we looking at an elephant sized loophole that Government do not want to tackle?

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