Ubers unfair Competition

New and exciting technological innovations are constantly disrupting existing markets and changing the way we live our lives for the better.

However, in some cases, new players have emerged and refused to play by the rules to the detriment of customers and drivers. The UK’s taxi and private hire vehicle market is a prime example of this.

The Department for Transport asked Professor Mohammad Abdel-Haq to lead an independent investigation into the UK’s taxi and private hire services. His final report made a number of sensible recommendations for reform of how taxis and private hire vehicles are licensed.

Some of the laws governing taxis date back to before the invention of the motor car, and while there were some reforms made in the 2015 Deregulation Act, it’s high time for a comprehensive update to bring legislation into the 21st century.

This is why I and my colleagues on the All-Party Parliamentary Group on Taxis are very disappointed that the Government did not accept all of the recommendations made in Professor Abdel-Haq’s report. There is nothing radical here. They are simply good, common-sense suggestions for long-overdue reform.

I was pleased to see my colleague Nusrat Ghani as the Minister responsible for taxis commit to bringing forward primary legislation.
 As it stands, this is intended to set national minimum licensing standards for taxi and private hire and to introduce a national database of licensing details. However, I believe that this new legislation can and should be more ambitious.

The taxi and private hire market has become unfairly skewed – particularly in London – to the detriment of the world-famous black taxi trade and the livelihood of cab drivers, including many of my constituents.

The rise of app-based private hire services has fundamentally altered the environment in which taxis and minicabs operate, of which Uber has undoubtedly played the most significant role. It has flooded towns and cities across the country, undercutting existing taxi and private hire vehicle operators while flouting regulation and failing to provide a quality service.

Private hire vehicle numbers have spiralled since Uber entered the UK market in 2012, causing increased congestion and pollution in our towns and cities. While London’s black taxi trade complies with strict regulations – they pass the rigorous Knowledge test, use special vehicles, meet enhanced disability requirements and have set fares by TfL – Uber’s business model allows it to operate on a completely different playing field. It arrives in our towns offering unrealistically low prices that local taxi and private hire drivers simply can’t match, and once established, uses its algorithms to hike up prices.

Uber journeys legally must be pre-booked and drivers cannot ‘ply for hire’ on the streets looking for business. Yet this is essentially what the company does via its app. Uber drivers circle around passenger hotspots, taking up road space and polluting towns and cities, while pushing out local taxi drivers and small minicab firms.

The current licensing system also poses significant risks to the safety of passengers which must be urgently addressed. Anyone who reads a newspaper will be well aware of the shocking cases of child sexual exploitation in places like Rotherham, which were exacerbated by the weak licensing system.

Just last month, news reports revealed a number of allegations of sexual assault made against drivers who were licensed by Wolverhampton Council but used these licences to ‘cross border hire’ and work in other areas where they have not been granted a licence. At present, local authorities who want to control which drivers operate in their area cannot do so, because a driver licensed in one authority can work anywhere.

This means that areas such as Rotherham who try to set higher standards for taxi and private hire vehicles in their areas to ensure public safety cannot enforce these in practice. Setting a legal definition of where drivers are allowed to work, under what licence, must form part of new legislation.

So what should this new legislation look like? I support calls from local government that they be given the power to cap private hire numbers as they see fit. New legislation also needs to finally set out in law who is allowed to ‘ply for hire’, and who is not. It must define where drivers are allowed to work to improve accountability and safety.

I believe in strong competitive markets, but competition must be fair. Taxi drivers and private hire operators must be able to compete on a level playing field with companies like Uber.

London’s black cab trade is arguably the most admired in the world; part of the fabric of our heritage and culture. I hope that the Government realises the extent of the consensus across all parties in the House for those recommendations made by Professor Abdel-Haq and rethinks its approach to reform. We need to completely rewrite outdated taxi and private hire laws and make them fit for the future.

Author Iain Duncan -Smith ( former Secretary of State for Work and Pensions)