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When you swim with the sharks don’t be surprised if you get eaten
By
The Reiver
It would ordinarily be quite difficult to predict the outcome of the Law Commission (LC) plans in respect of legalising cross border licensing for private hire, however, there are a few genuine fears that need addressed.
Within days of the LC interim statement a few strange things happened, the government, presumably upset with the LC turnaround of views in respect of taxi deregulation, wrote to MP’s assuring them that the LC report was “just an interim statement” and was “not a formal document”. They also attached their response to the LC consultation which some foolish individuals are actually mistaking (possibly in malice) for a government response to the LC interim report.
Of course, we should not forget the government response – whilst it showed their cards so to speak, it also demonstrated the influence they wished to have over the LC. I mean, they gave the LC one third of a million pounds and then responded to a consultation that they instigated in the first place. In choosing a couple words to best describe the government response, I would use “utterly clueless”. Indeed, if I were a gambling man, I would actually place a firm amount of cash on the government response written on the advice of the inmates of the nearest lunatic asylum.
It is also a sheer co-incidence that within days of the LC interim statement, a large minicab firm from London, whom incidentally made quite a large donation to the Conservative Party, advised that they had sold a majority stake in their business to the Carlyle Group for £300 million. Carlyle Europe Partners managing director Andrew Burgess said he was “keen to roll out to other cities in the UK”.
What the LC plan for private-hire is more or less private hire deregulation. There will be no local control of either vehicle or driver standards – if there is a localised problem, the local authority will not be able to instigate localised rules in an attempt to rectify it. This type of approach seemingly has the blessing of the government, whom are seemingly as clueless as those they wish to see driving licensed minicabs, the government state;
“On the subject of topographical knowledge testing, the Government accepts that the whole thrust of the fresh approach to PHV licensing militates against the imposition of such a test on the basis that operators will attract custom if their drivers know where they are going and vice versa.”
If you believe the hyperbole, you would be led to believe current licensing rules are seriously affecting small family businesses; the emphasis is built upon creating the image of a little firm. Yet, as the takeover of the London minicab firm suggests, the propaganda doesn’t actually fit with the facts. It takes a huge stretch of the imagination to consider a company involved in a £300million takeover as “a small family run firm”. London isn’t the only example, a large minicab firm on Merseyside recently posted a very eco-friendly turnover of £7.25 million, whilst the cross-border turnover in the North East of some minicab firms run into the millions.
Of course, its all part of a huge facade giving the impression of over bearing councils picking on plucky little family run businesses who are battling on, only trying to serve their customers, against all the stacked odds the local council can throw up against them. I am highly surprised they don’t add a picture of someone suffering from cancer in their advertisements, “if private hire rules aren’t changed – Janet won’t get her minicab......she won’t get her chemotherapy, and Janet will die” – well between that and those adverts each afternoon between Jeremy Kyle shows displaying poor African children with flies in their eyes.
Nothing (unsurprisingly) is said about drivers working dangerously long shifts or the pseudo self-employed status of the family tax credit claiming serfs.
Currently provincial private hire law describes ‘operate as "in the course of business to make provision for the invitation or acceptance of bookings for a private hire vehicle", the key word being “provision”. Over the years, there have been numerous court cases where this word is mentioned.
A case in Windsor it was decided that an advertisement wasn’t a provision and that ‘operate’ meant where the booking was received.
A case from Bromsgrove, where a dedicated freephone was installed in an adjoining borough, decided the freephone was ‘ making provision’ and therefore an operator’s license would have to be obtained from the district where the freephone was situated. By law once an operator’s license is obtained then all drivers and vehicles would also have to be licensed by the same authority.
One of the presiding judges (Kennedy LJ) stated in summing up;
“In 1999 it is absurd that a licensed operator who operates in the area of one district council in a large conurbation commits a criminal offence if he installs a small sub-office, or perhaps even a dedicated telephone line, in an area controlled by an adjoining district council because he thereby makes provision for the invitation of bookings in the second area. To keep within the law he must then obtain a whole series of fresh licences - an operator's licence, drivers' licences and vehicle licences - for the second area.
This cannot be what Parliament originally envisaged. As the cost of licences varies, we understand, from one district to another, it is not easy to see precisely how the problems should be resolved, but clearly if operators, their drivers and their cars are properly licensed in respect of one area which is responsible for overseeing their activities, they should not have to be re-licensed elsewhere. The problem is to some extent the result of improved technology since the statute was passed, but the law needs to reflect the current state of technology and not be 23 years behind it.”
Not many supermarkets give away freephones to minicab firms free gratis– the majority of freephones have to be tendered for – to this end it is highly likely any private hire firm, knowing legislation, know perfectly well they may be infringing licensing laws if they tender beyond their district. Of course, if they win the tender they then cry foul – overbearing local regulations and all that stuff.
However, the words of Kennedy LJ do, to a degree, still ring true.
Having stated the above, if minicab empires expand with new legislation, and this is almost certainly their intention, what chance do smaller local firms stand? They face much larger firms with (by comparison) virtually limitless resources in terms of funding and advertising. Technology dictates these minicab empires can run limitless numbers of vehicles across the country, from a single dispatch office located many miles away. Ironically, the likely result of liberalising private hire law, with a goal of opening up competition, could through the growth of empire, effectively stifle the very competition it was originally intended to stimulate.
Good intentions do not always result in generated good – capitalism is like that – the much-vaunted trickle-down effect of wealth rarely happens, just because the boss lives in a tax free haven, doesn’t mean the serf can afford a ‘two up two down’ terraced house.
In a white paper presented to Parliament in 1984 the government of the day announced;
“The free and fair competition in road passenger transport which the Government proposes will bring great benefit to many travellers and to the community at large. The main network of services will continue and will better meet the needs of the traveller. On many well used services fares will go down. Other services may change to match peoples' requirements more closely. In rural and urban areas alike, there will be potential for new services. Most important of all, the measures proposed by the Government should slow or halt the seemingly inevitable decline in service to the travelling public. The total market for public transport should expand.”
We all know the results, indeed the Competition commission were involved last year, almost 30 years later, one particular recommendation stated;
“Introducing restrictions on bus operators making changes to service frequency—to discourage ‘over-bussing’ and other short-term actions to destabilize competitors. Recommending that Traffic Commissioners introduce and enforce a Code of Conduct to prevent unacceptable behaviour. We have also recommended that Traffic Commissioners be given powers to introduce temporary restrictions on service changes when municipal operators are subject to a sales process to preserve future opportunities for competition”.
The 1985 Transport Act was intended to introduce competition in local bus services, and whilst this did happen at first, it subsequently led to ‘bus wars’ and an eventual monopoly, where essentially most areas have a single bus company – three large bus companies now effectively run across the UK. There is little to suggest what happened with buses will not happen with private-hire.
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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin
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