ALL THINGS LICENSING
Hence, there is a suggestion in the consultation that the only way to put beyond doubt that a PHV driver can contract with a passenger would to be to remove the role of licensed operators, which would effectively replicate the current taxi licensing structure. Consequently, those previously licensed as operators would take on the role of “intermediaries”, as is currently the situation for pre- booked taxis. However, removing the requirement for bookings to be made with an operator would be a fundamental change and would have implications for the taxi sector as well and would effectively create a one-tier system.
The consultation refers back to the previous Law Commission report, published in 2014, to which, let us not forget, the government has not responded. The report carried out an extensive review of the legal framework for taxis and PHVs. It considered the two- tier system of taxis and PHVs and whether it should be retained, or moved to a one-tier system, concluding that the two-tier system should be retained as it promotes consumer choice and a single system would lead to over or under-regulation.
Subsequent difficulties with a one-tier system include how there could be a differentiation between taxis and PHVs and questions about how to apply and regulate fare structures synonymous with taxis but not part of the PHV model. There are also potential risks of drivers leaving the trade due to differing standards, or an influx of PHV drivers into the taxi sector which may over provide taxis and under provide PHVs thus creating problems for both drivers and passengers leading to potential safety issues.
There is a suggestion in the document about the concern from licensing authorities about a loss of revenue received from no longer needing to license operators. For councils, this is not the biggest concern as fees would be passed to drivers and vehicles, resulting in higher fees for these licences which are likely to be of more concern to licence holders. However the greater issue would be undermining the objective in licensing private hire operators, which is the safety of the public, who will be using operators’ premises, vehicles and drivers arranged through them.
Operators also hold a considerable amount of information about customers, and as such operators
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and their staff must not use their position to take advantage of this information. This control and public protection would be lost by “simply” removing reference to contracts in the legislation.
If operators were no longer required to be licensed, councils would not have to check their suitability not only leading to potentially unsuitable persons entering the field, but if drivers were permitted to take bookings themselves it is possible that many operators in the role of intermediaries would see decline in bookings leading to potential viability issues for many.
Luckily, paragraph 6.14 of the consultation suggests that this is not the government’s preferred option. However, by including it in the first place and not targeting the consultation at local authorities, this has got to raise a number of questions.
The consultation concludes by looking at either amending VAT legislation or mitigation options which include how the government could broaden existing transport schemes to support vulnerable customers, which again could potentially impact on the sector if for example more people are eligible for bus passes.
Clearly, there are many different views on the subject of VAT and PHVs and with the consultation closing after the general election, will be for the winning party to consider, together with the many other wider issues which are likely to form the basis of campaigning. However I do hope that the backwards step of removing operator licensing is not where we end up.
The consultation, closing on 8 August, is available at:
www.gov.uk/government/consultations/consultation -on-the-vat-treatment-of-private-hire-vehicles
With the election and potential for a new government to look at the VAT issue, and possibly the wider sector, there is no more important time to be ‘in the know’ about licensing issues affecting the trade and I would again encourage members of the trade to join the Institute of Licensing.
In the meantime, full details of the IoL are available at:
www.instituteoflicensing.org
JUNE 2024 PHTM
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