Transport for London (TfL) has confirmed that changes will be made to the fees private hire operators are charged for the cost of licensing, compliance and enforcement activity. The new fees more accurately reflect the resources required to regulate firms, based on the size of their operations.
The Capital’s private hire industry has grown dramatically, from 65,000 licensed drivers in 2013/14, to more than 116,000 today. The number of vehicles has increased from 50,000 to 88,000 over the same period. With this growth, there has been a substantial increase in the cost of ensuring private hire operators fulfil their licensing obligations and in tackling illegal activity to keep passengers safe. It is estimated that over the next five years enforcement costs alone will reach £30 million, up from a previous estimate of £4m.
The total projected cost for licensing, enforcement and compliance for the taxi and private hire trades over the next five years is £209m.
The law allows the recovery of costs incurred for licensing, regulatory and enforcement activity through the licence fee process. All money generated through the process has to be spent on such activity.
As set out in the Mayor’s Taxi and Private Hire Action Plan, income from operator licensing fees will be used to contribute to funding an extra 250 Compliance Officers, with most now in post. The team plays a pivotal role in keeping Londoners safe. They also provide reassurance to those travelling at night through a highly visible, uniformed presence in the West End, City and other areas across London.
Previously a ‘small’ operator, with no more than two vehicles, would pay £1,488 and a ‘standard’ operator – those with more than two vehicles, regardless of the size of its fleet - would pay £2,826 for a licence lasting five years.
The new fee structure, approved by the TfL Finance Committee, will replace the existing two ‘tiers’ with eight; with charges ranging from around £2,000 for a five year licence for those with 10 vehicles or fewer, to £464,000 per year for the largest operator. This would ensure the licence fee structure for private hire operators reflects the costs of compliance activity according to the scale of each operator.
TfL recently consulted on the changes and has listened to feedback, which identified that the original proposals penalised small and medium-sized operators and has now created two additional charging bands. To further support successful businesses, TfL has also included provision allowing operators in the largest three categories to pay fees in annual instalments.
There are around 3,000 private hire operators in the Capital. Close to half have 10 vehicles or fewer, with just five per cent of companies in charge of fleets of over 100 vehicles.
Helen Chapman, General Manager of Taxi & Private Hire, said: “There has been a huge growth in the industry in recent years and it is only fair that the licence fee reflects the costs of regulation and enforcement.
“The safety of Londoners is TfL’s top priority, and the changes to fees will help us fund additional compliance officers who do a crucial job cracking down on illegal and dangerous activity.
“We have listened to the views of stakeholders in the consultation and have amended the fees structure to give small and medium-sized operators more flexibility in how they manage the size of their fleets.”
The Finance Committee also approved changes to licence fees for taxi drivers, taxis, private hire drivers and private hire vehicles. These fees were all frozen last year (2016/17).