The Office of Fair Trading has recommended that local authority limits on taxi license numbers be lifted.

In its long-awaited report the Office of Fair Trading (OFT) has recommended the repeal of UK legislation restricting taxi license numbers.  It also called for local authorities operating such policies to lift restrictions before waiting for legislative change.

The OFT considered that license restrictions increased waiting times for customers and were detrimental to public safety and order as they encouraged the use of illegal taxis and prevented the streets from being cleared late at night.  It also found that controlling numbers prevented potential entrants from setting up taxi businesses and created artificial license premiums of up to £50,000.

Claims that quality and safety would suffer were rejected in favour of qualitative regulation for cars and drivers, and arguments that de-limitation would lead to a lack of service at off-peak times were dismissed as findings showed that the lifting of restrictions increased supply at all times.

The OFT examined the lifting of quantity controls in Bristol, Sheffield and Cambridge and found significant increases in taxi numbers but little movement in combined taxi/private hire numbers.

In an otherwise conservative report that largely endorsed the status quo, the OFT also recommended 'proportionate' qualitative standards and for all LAs to set maximum fares for taxis, but with price competition below the maximums to be encouraged.

The report also recommended the dissemination of best practice to LAs by central government with regard to quality and safety matters.

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