Private Hire Taxi Rules

As of April 1, 2014, the CMA became the UK's leading competitive and retail association. CMA has merged the Office of Fair Trading and the Commission's Office of Fair Trading activities in the areas of Fair Trading and Fair Trading. CMA has a legal obligation to encourage fair trade for the good of its customers.

CMA has a lobbying role, which consists of informing or advising the relevant authority on the effects of law and order on fair trading. In this work, HM Treasury has asked the CMA to examine how best to encourage domestic government to compete and to encourage it if it does not.

Within the framework of our work on the effects of regional government on competitiveness, the CMA has carried out a revision of the license terms for taxis and private rental cars (PHV). CMA acknowledges that the licence terms for taxis and PHVs are critical to guaranteeing passenger security. There is a clear need for rules on car security and drivers' fitness for driving for security reasons.

The purpose of this guidance is to help public administrations better understanding the effects of certain licence terms on the consumer and to strike the right balance between guaranteeing passengers' security and preventing higher fares or lower consumer standards of services. CMA has found that some licence terms may limit or distort effective competitive behaviour in a way that may lead to higher pricing and/or poorer services to the consumer.

CMA acknowledges that regulatory agencies are under competitive stress and have to make difficult choices on how to find the right equilibrium. Competitiveness is a business to business competitive environment that favours the consumer. Competitive forces can put price down and price up, and qualitative up, because more competitive forces mean that companies have to struggle more to win and keep clients.

According to the CMA, regulation should only restrict effective consumer protection to the degree necessary to restrict it. These guidelines illustrate how some licence terms can influence consumer interests in order to make sure that they are specific and proportional. CMA' s comprehension of the markets for Wagons and Wagons is influenced by the 2003 OFT Marktstudie and the ensuing 2007 IA, the assessment of a fusion between private rental companies in Sheffield and our recent evidentiary assessment and license terms analyses.

In addition, we have taken into account the Law Commission 2014 reports on taxi and private rental as well. Travelers are in a relatively vulnerable situation to be able to compare quotes and bargain fares in the hailstorm and taxi rankings. Therefore a tariff arrangement for taxi is necessary. It also justifies a stronger regulatory approach to the standard isation of taxi servicing in comparison to the PHV.

Quantitative requirements for cabs are not necessary to guarantee the security or standard of taxi services or to charge appropriate fare to travellers. Volume regulation can, however, be detrimental to the protection of consumers by decreasing availabilities and extending taxi delays. In our revision of the license terms, the CMA has sent letters to several license agencies, such as Transport for London and Sheffield City Council, highlighting where the terms may limit effective competitive opportunities and adversely affect consumers.

The right of taxi to work for rent requires a different arrangement for taxi and PHV. Consumers are in a vulnerable situation to assess the qualities or price of taxi services; it is therefore necessary to set taxi tariffs (and services standards). With the advent of app-based modelling, increased rivalry between taxi and PHVs can bring advantages to people.

In order to make this easier, the differences in regulation between cabs and PHEAs should not go beyond what is legally prescribed or necessary to ensure passenger protection. Customers are better able to judge the level of service and price of private landlords than with taxi drivers. In general, private sector competitors can function well.

The security of passengers must be guaranteed, but licence terms that go beyond this may limit the number of passengers and raise costs and fares. Certain circumstances may also lead to market entrance barriers decreasing the number of incumbents and thus decreasing competition pressures on incumbents in order to lower tariffs or enhance levels of customer satisfaction.

It is necessary, as mentioned above, to adjust the price and standard of services of taxi cabs, as they have a singular right to rental contracts. It is also necessary, as with the private landlord, to guarantee the security of customers. Quantitative limits are not necessary to guarantee the security of travellers or to guarantee that tariffs are commensurate.

They can, however, damage the passenger by decreasing flight availabilities, prolonging queuing periods and decreasing the margin for reduced fare competitiveness. CMA considers that concern about the cost of congestion, atmospheric contamination and enforced penalties in general can be tackled through actions that are less damaging to passengers' interests than quantitative limits. The fact that the lifting of quantitative limits results in longer delays for taxi riders between trips indicates that there is no pricing restraint to the advantage of customers.

Authorising bodies should supervise queuing periods and consider the adjustment of the price ceiling in order to eliminate imbalances between offer and request. Such discrepancies should be addressed to the advantage of users. CMA' s guidance on assessing the effects on competitiveness can help those drafting policies or rules to evaluate their effects on competitiveness and consumer interests.

There are four test types in these guidance documents that help political decision-makers judge whether their suggestions will restrict competition: Taking these issues into account will help to make awareness of possible restraints of trade among LAs and may motivate them to consider alternatives where possible. Limitation of the number or size of supplier Quantitative limits for taxi cabs Quantitative limits may be detrimental to passenger traffic by reducing airport accessibility, lengthening wait time, reducing the margin for manoeuvre to reduce tariff pressures and reducing selection.

It can also enhance the risks to passengers' security by encouraging the use of unauthorised illegitimate drivers/vehicles. - Licensing terms that make it harder for the driver to work for more than one operatorSuch terms make it harder for companies to penetrate or grow the markets by hiring current operators on a part-time contract base.

As a result, the number of companies can be reduced, thus alleviating competition to lower costs or enhance customer intimacy. The limitation of the capacity and incentive of providers to participate in competing services is governed by rules that go beyond passengers' needs: - Comprehensive assessment of navigation capabilities for private hire PPP driver is a place where users are likely to be in a good situation to balance pricing and qualitative standards that best meet their needs.

It is likely that if a satisfactory number of customers want a high level of passenger services, some carriers will provide them. Overburdening services is likely to result in higher prices for users, especially those who would most appreciate a low-cost one. Restricting competitiveness and supplier inducements Restricting or unnecessarily distinguishing between PHV s and taxis: - Approval needed for any changes to the operational mode Limits to the functioning of PHVs should help to cut innovations, lower prices or enhance the overall level of passenger services.

Terms that are applicable to POs and not to cabs can relatively raise the running cost of POs. Therefore, these terms may make it more difficult for PFT providers to draw customers who might otherwise use cabs, which could result in higher fare or lower levels of customer inferiority. Limitation of the choice and information available to consumersRestriction of passenger values of aspect of the service: - Binding minima between reservation and departureRestriction of aspect of the services that could be of value to the passenger is likely to be directly detrimental to their well-being.

Make sure that your suggested actions are necessary to reach your goals. Take into account the issues raised in the CMA's Guidance on Competitive Assessment. Wherever action is likely to reduce distortion of the market and damage consumers' protection, consider whether other, less limiting action could be taken to reach your goals, and if not, whether the goals actually require the limitation.

CMA' s brief summary containing further details and information on our views on taxi and phpv permit terms is available upon enquiry.