A taxi plate holder loses his licenses after illegal hire operation uncovered.

A Cheltenham man who had licenses to operate two taxis has lost control of them following a dispute with his drivers.  John Donoher agreed to rent the licenses to drivers who used them with their own vehicles.  The vehicles, which had been bought by the drivers, were registered in the name of  Mr Donoher so that this concurred with his status as license holder.  However, since Mr Donoher did not properly own and operate the vehicles this arrangement was considered illegal.

The two drivers complained to Cheltenham Borough Council because they were concerned that the arrangement was illegal.  The council's licensing committee agreed and granted the licenses to the two drivers.  It was claimed that the practice had been widespread in Cheltenham for many years.

However, Mr Donohers's representative claimed that the vehicles had been transferred to him by the drivers for nominal sums and to thus he was the proper legal owner of the vehicles despite the apparently one-sided appearance of the agreement.  Mr Donoher said that he would appeal the decision.

The case follows a similar scenario outlined in a local government Ombudsman's ruling where a Bournemouth couple lost their taxi licenses to drivers who had been renting the plates.  The couple claimed that they had lost a valuable investment due to  maladministration by the council.  The Ombudsman ruled that one of the licensees had been benefiting from an unlawful arrangement for years and thus compensation was inappropriate.  However, the Ombudsman ruled that the other licensee had not been properly advised by the council as to the illegality of the arrangement and thus awarded £17,000 for the loss of the license, with the council deemed to be two thirds responsible for the loss.

In Dundee a council report last year claimed that up to half of the city's 500 taxis could have been operating under this sort of arrangement, which also rendered the insurance policy invalid.  However, the report stated that investigations had led to a number of licenses being surrendered, and in one case a driver who had been hiring a plate lost his badge after being deemed not fit and proper, an approach clearly diametrically opposed to that taken in the English cases, where the drivers seemed to benefit significantly subsequent to colluding in an illegal arrangement.

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