Report on taxi licencing

A report examining whether consumers are best served by the current regulatory regime under which taxis and private hire vehicles are licenced has been received by the Executive.

The study by the Office of Fair Trading (OFT) into the UK market for taxis and private hire vehicles was sent to Executive Ministers and the UK Secretaries of State for Trade and Industry and Transport.

Responsibility for legislation on taxis and private hire vehicles in Scotland is devolved.

The three main recommendations of the report are:

• quantity restrictions should be lifted – limiting the number of taxis reduces availability and lowers the quality of service to the public
• quality and safety should be regulated – there are compelling reasons to regulate to safeguard driver and vehicle standards, but there are questions about whether quality regulation always achieves its goals proportionately
• fares should be regulated – there are sound reasons to regulate taxi fares, for example, to protect consumers in vulnerable situations, but there could be greater freedom for beneficial price competition below regulated fare caps

The OFT has undertaken this investigation under Section 2 of the Fair Trading Act 1973, which gives the OFT broad powers to report on commercial activities in the UK.

Finance and Public Services Minister Andy Kerr said:

"The regulation of taxis and private hire cars are devolved to the Scottish Parliament but we plan to invite views in order to determine whether any of these recommendations should be implemented in Scotland ."

The Department of Trade and Industry (DTI) has a general interest in OFT's market studies (and co-ordinates Government responses where those studies make regulatory recommendations). DTI is responsible for delivering the competitive framework for the growth of successful businesses and a fair deal for consumers.

DTI Competition Minister, Gerry Sutcliffe said:

"I welcome publication of this report, which results from OFT's new role in considering the impact of regulation in markets on competition. We will be considering carefully the report and its recommendations.

"The DTI is responsible for co-ordinating a response across Government and will be working closely with other departments and the devolved administrations. Views are welcome and should the Government decide to make regulatory changes, there will be consultation on draft proposals."

Comments on OFT's findings with regard to Scotland can be sent to:

Ann Callaghan
email: OFTtaxireport@scotland.gsi.gov.uk