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PHV drivers urged to ‘check the small print’ after insurer EXCLUDES working outside of licensed area

Updated: Jan 23, 2023

Taxi and private hire vehicle (PHV) drivers have been urged to check the small print of their insurance policies as one insurer EXCLUDES the working of vehicles outside of the driver's licensed area.

One of the industry's biggest insurance firms, Tradex, have added a clause to policies that could cause problems for drivers that predominantly work outside of their licensed area using the controversial 'cross-border hiring' rule.

On page 11 of the Tradex Taxi Policy it highlights a list of ‘use exclusions’. The points listed are not covered in taxi related policies unless specifically included in the policy holder's motor insurance certificate or schedule.

Crucially in the list it excludes ‘the use of your vehicle as a taxi, PHV or PSV outside the area in which you are licensed to operate’.

Cross border hiring is a common term used to describe when a taxi is lawfully used for PHV purposes in a district outside which it has been licensed to operate. This is a problem in many areas because there are disparities in conditions on licences; a prospective driver in one council 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.

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.

Some local authorities have attracted thousands of out-of-area PHV drivers to licence with them by enticing them with cheap licensing fees and quicker processing times.

Many local authorities have long called for the Government to listen to concerns on the topic of cross-border.

In 2022, after a long wait and much lobbying, the Government closed a 12-week consultation to update vital Taxi and PHV guidance supplied to local authorities to better cope with new digital ways of working following the boom in ride-hailing services.

A raft of new recommendations were made, covering pretty much every hot topic impacting the taxi and PHV sector right now, except that on the topic of cross-border.

Minicab publication PHTM warned private hire drivers of the policy on social media: “Calling all Private Hire / Taxi Drivers - we suggest you all check the small print of your insurance policy.”


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