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UPHD responds to Addison Lee’s letter to the Mayor on congestion charging

27 Feb 2018

 

 

Dear Mayor Khan (cc. Deputy Mayor Shawcross and members of the London Assembly Transport Committee)

I am writing in response to Addison Lee's open letter to you regarding TfL's decision to revisit the congestion charge exemption for private hire and while we can agree with Addison Lee on some things, the differences are instructive.

Firstly, we agree with Addison Lee that private hire should be recognised as part of the publicly licensed transport system and, as such, removing the exemption from private hire vehicles while leaving it in place for taxis would be unfair and anti-competitive.

However, in his letter to you Mr. Boland, makes some stunning observations about just how dysfunctional the private hire market in London has become and the obvious disastrous implications for workers. I paraphrase:

1. In a race for market dominance some operators are offering fares below the cost of carriage


2. Some operators might choose to absorb the congestion charge so to keep fares artificially low


3. Other operators would pass on the congestion charge to drivers so as to keep fares artificially low


4. In any scenario, where the exemption is lifted, fares are unlikely to increase and demand will not be reduced


In a recent Employment Tribunal Addison Lee was found to be in violation of the law in denying its drivers worker rights including the right to earn, at a minimum, the national living wage for every hour logged on and holiday pay. Evidence submitted showed drivers earning around £5 per hour – less than half of the London Living Wage. The Tribunal also found that drivers must work 25 to 30 hours per week just to pay back Addison Lee the fixed rent on the vehicle and that is even before any other operating costs including fuelling. Even though Addison Lee still has not come into compliance with the Employment Tribunal's ruling they recently further increased the rent it charges to drivers to use their vehicles to carry their customers. Addison Lee is therefore one such firm offering fares below the cost of carriage because it is refusing to comply with the law and accept the costs associated with the worker rights of its drivers.

But what is particularly cynical and offensive about Mr. Boland’s letter is the veiled threat that his already hard-pressed drivers will end up paying the congestion charge while consumers and Addison Lee itself escape unscathed. In his letter to you, Mr. Boland is literally holding to ransom the very workers he has been found at Tribunal to exploit. We say that is reprehensible and totally unacceptable. Mr Boland should accept responsibility for the employment and environmental costs of his enterprise and not pan it off on others. If the congestion charge exemption is to be lifted at all then it should be levied against operators based on the size of their fleet, attached as a surcharge to every fare and payable by the end consumer . Congestion charging cannot possibly reduce congestion unless a market signal is transmitted through to the end consumer so to reduce demand. That is how environmental market instruments are supposed to work - if a congestion charge fails to reduce congestion, what's the point?

Mr. Boland also goes on to mischievously conflate ULEZ charging with congestion charging but a city full of electric vehicles is still a congested city. The only way to really reduce congestion is to reduce the number of vehicles. Given the market distortion and dysfunction described by Mr. Boland, congestion charging alone is unlikely to meet this aim. Instead, you must secure the powers to cap and reduce the number of private hire vehicles in London which in turn might stabilise our incomes and end the terrible exploitation of drivers now prevalent across the industry. Wouldn’t it be great if we could just regulate London’s private hire trade to operate within the environmental and ‘economic norms’ Mr Boland so craves?

Yours Sincerely

James Farrar

Chair of the United Private Hire Drivers branch of the IWGB 

 

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