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Surge in TfL private hire licences issued fuels wider debate on capping and cross-border regulations


Image credit: DALL.E (AI Generated)

Transport for London (TfL) is experiencing a significant rise in the number of private hire vehicle (PHV) drivers.


In just one week, 304 new licences were issued, bringing the total number of licensed PHV drivers in the capital to 107,515 as of Sunday 23 June 2024. This marks an increase of 211 from the previous week, indicating a strong demand for to work in the private hire sector.

The influx of new licences raises several questions, particularly regarding whether all these newly licensed drivers are actually operating within London. Cross-border regulations allow PHV drivers licensed in one area to work in another, leading to concerns that some drivers may be licensed in London but choosing to operate in different areas. This practice complicates regulatory oversight and affects local traffic and competition dynamics.


The cross-border rules are a point of contention. Essentially, these regulations permit drivers to be licensed in one jurisdiction but accept fares and operate in another. This flexibility can be advantageous for drivers seeking more lucrative or convenient markets, but it poses challenges for regulatory bodies tasked with managing congestion and ensuring fair competition.


TfL's licensing process for PHV drivers involves a fee of £124 for the application and an additional £186 if the licence is granted. The recent surge in applications means TfL generated over £94,000 in licensing revenue from new applicants in just one week.

The rise in licensed PHV drivers comes amid broader discussions about the need for over 100,000 private hire drivers in London's transport ecosystem. While these services provide convenience for passengers requiring the service, they also contribute to increased traffic and saturate the market for their peers. The balance between these factors is crucial for maintaining an efficient and fair transport network.


Industry experts argue that a review of cross-border regulations is necessary to address some of these issues. Ensuring that drivers operate primarily within the area where they are licensed could help manage traffic congestion and ensure that local demand is met appropriately. Additionally, clearer guidelines and stricter enforcement could prevent potential exploitation of the licensing system.


The debate over cross-border operations also touches on the economic aspects of the private hire industry. As more drivers enter the market, the competition for fares intensifies, potentially impacting earnings for individual drivers. There are some calls for the capping of PHV drivers. This scenario calls for a careful examination of how licensing and regulatory policies can balance market growth with sustainable income levels for drivers.


The environmental impact of the increasing number of PHV drivers cannot be overlooked either. More vehicles on the road contribute to higher emissions and congestion, which arguably contradicts London's broader environmental goals.

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