ITC explores the future for private hire and taxis

What will be the future shape of private hire and taxi services?

The Occasion

Rapid advances in technology and changing behaviours are altering the shape of private hire and taxi services. The number of taxi and private hire vehicles is now at a record high in the UK and more people than ever before are choosing the convenience that these services can offer. This has partly been driven by the development of apps and new platforms for using these services and these are expected to wield a greater influence in the future. What will the future shape of private hire and taxi services look like in the UK, and what are the implications for users, drivers, businesses and the wider public?

To debate this important topic the ITC was delighted to welcome a distinguished panel of experts to our Winter Discussion Evening on 20th February 2018. The panel included Andy Boland, Chief Executive of Addison Lee; Nicolas Andine, Co-Chief Executive of urban mobility platform Karhoo; and Jamie Mackenzie, Business Compliance Officer at Watford Borough Council. The discussion was chaired by ITC Commissioner Kris Beuret OBE: a leading expert on taxi use.

Summary

The future shape of private hire and taxi services in the UK – Key issues raised by the speakers:

  • Andy Boland provided an overview of the trends affecting the private hire industry. He explained that the global car services market was now worth over £100bn and its value was rising faster than GDP. Consumers were increasing their use of these services, he pointed out, and new apps were helping to increase market awareness. However, the industry remained fragmented and suffered from under-investment. In the future, he predicted that the private hire market would consolidate and segment along the lines of quality and price. The entire ecosystem around vehicles was changing, he noted, with vehicle ownership falling, connected car technology improving and a powerful trend towards automation and electrification of cars. Challenges remained around the need to provide user-led services to passengers and to develop the infrastructure necessary to support integrated mobility services. Addison Lee was positioning itself to take advantage of emerging technologies, he concluded, with an operating model that ranged from operator services to customer support.

    Karhoo Chief Executive Nicolas Andine

  • Nicolas Andine explored how private hire and technological innovation could help to address policy objectives. He noted that major cities including London are facing similar policy challenges to reduce congestion and improve air quality. To achieve these objectives major changes in urban mobility would be needed, including better cross-modal connectivity, the use of zero emission vehicles, and increased ride sharing. He pointed to an ITF study demonstrating how autonomous ride sharing in Lisbon could dramatically reduce car use in the city. In the light of these emerging trends, private hire and taxi services could in the future have a different role in the city transport network, acting as a feeder system for public transport and supporting peripheral trips outside the city core. Challenges for the industry included the need for improved co-ordination and for transparent and reliable systems to encourage ride sharing.
  • Jamie Mackenzie explained the regulatory challenges arising from taxi and private hire operations. He observed that rapid changes in taxi and private hire operations had occurred in the last decade, and as a result regulators faced a number of challenges. In particular, the growing trend for private hire services to operate a long way from their licensed location was leading to concerns about local congestion or long driving hours. He explained that licensing was traditionally a local authority issue, but it was becoming harder for authorities to keep up with rapid technological advances. There was a need for greater collaboration across cities and counties to address cross-border issues and maintain standards. Existing legislation was fairly good, he suggested, but could be tweaked to address new technological developments.

Kris Beuret OBE chairs discussion

Key themes raised in the discussion

  1. Do we need stronger regulations on cross-border operations? Guests disagreed about whether cross-border operations were a problem and, if so, how this should be solved. It was noted that some cross-border activity was lawful, but others suggested that this behaviour jeopardised safety, and left local authorities unable to penalise offenders and control services in their jurisdiction. There was also a concern that increased cross-border activity contributed to poor air quality in urban areas with the highest demand. One solution would be to have an agreed set of minimum standards that applied nationally, but some delegates expressed concern that this would leave local authorities unable to respond to local needs. Other options included capping the number of licences issued, but it was noted that this had not always been a success.
  2. We need to be clear about the purposes of taxi & private hire regulation. A discussion arose on the purposes of regulation in this area. Some guests questioned whether private hire was a public or a private good: it was arguable that such services were part of the wider transport network and should be regulated accordingly. Concern was expressed that regulation currently protected private vested interests, and a rethink was required of which public interests needed upholding. It was suggested that the key objectives should be public protection and safety, and regulation should focus on these. However, other guests suggested that the regulatory system in the UK was more open and transparent than in other developed nations.
  3. Private Hire offers opportunities to solve transport challenges. Several guests noted that private hire services could solve transport challenges. This was particularly the case in rural areas, where on-demand services could fill the gap opened by declining bus provision, and for the mobility impaired, for whom car ownership might be uneconomic. Furthermore, private hire was likely to be a key component of developing Mobility as a Service (MaaS) provision. Urban congestion problems could also be alleviated through increased ride sharing and air quality could be addressed by moving towards electric vehicle fleets. The most innovative private hire providers were likely to take advantage of these trends.

    Jamie Mackenzie responds to questions

  4. How can regulations be effectively enforced? The problem of how to enforce regulation of the sector was raised. It was noted that new mobility platforms often required drivers to self-certify with little means of checking credentials. Furthermore, the local system of licensing made it difficult to police drivers who were operating far from their point of origin. Driver education would also be important, to increase awareness of regulations and prevent problems such as drivers refusing guide dogs on taxis. Some guests suggested that technological solutions could be found, such as geo-fencing or the increased use of cameras.
  5. Safety and Quality remain key considerations: In the discussion most people acknowledged that safety and quality would remain crucial issues for taxi and private hire services. While London taxis were disability friendly, this was not yet the case for many private hire services and should be encouraged. Strong regulations should encourage a rise in quality, it was suggested, and could raise barriers to entry thereby restricting dubious operators.