ALL THINGS LICENSING
conditions which will reduce competition between operators and choice for consumers, driving up prices.
So, what are the arguments in the debate on minimum fare for private hire vehicle journeys?
Arguments for a minimum fare
no legal mechanism for the regulator, the local licensing authority, to have any involvement in setting a minimum fare for private hire journeys. Local authorities can obviously only act within the legal parameters available to them and therefore arguments for the rationale of minimum fares will come in the form of public safety arguments with authorities presumably imposing conditions on operator licences regarding a minimum fare for reasons of driver welfare and safety.
Certainly the Best Practice Guidance (2023) at paragraph 7.6 discusses that whilst licensing authorities should not be making decisions on employment relationships between drivers and operators, this is for the courts and employment tribunals to decide, where an employment tribunal or a court of law has ruled on the employment status of a driver or drivers working for an operator, whether the operator is complying with that decision in respect of the driver(s) referred to in the ruling, should reasonably be considered by a licensing authority as part of the ‘fit and proper’ test for a private hire vehicle operator.
It is in this vein that local authorities must be keeping a watchful eye on the Uber, Sefton, Delta Veezu etc. case due to be heard in July, as the potential ramifications around contracts between passengers and operators, and by extension drivers and operators, as I have written previously in September 2023’s PHTM about what this case could mean for local authorities; ultimately as the Best Practice Guidance suggests an increased role in determining operator suitability and potential involvement in disputes between driver and operator about working practice on the basis that potential conduct warrants an operator unfit to hold a licence.
However, whilst the Best Practice Guidance advocates a role for local authorities in ensuring operators abide by any employment rulings, the earlier Competition and Markets Authority Briefing Note on Taxi and Private Hire Regulation (2017) very much advocates against local authorities becoming involved in setting
PHTM JUNE 2025
1. Driver welfare: One of the principle arguments in favour of a minimum fare is the potential improvement in driver earnings. Driver earnings can vary widely depending on the type of vehicle, location, and experience level with many private hire vehicle drivers struggling with low wages, especially during off-peak hours. A minimum fare ensures that drivers receive a fair compensation for their services, which can lead to better job satisfaction and reduced turnover rates.
2. The other principle argument linked to the above is one of: public safety. Drivers who have earned a better wage and are not financially struggling will not have to make a choice between paying bills, putting food on the table or maintaining vehicles, leading to better maintained vehicles and reduced risk of accidents due to vehicle malfunctions. There is also the strong argument in a reduced risk of overworking with a minimum fare helping ensure that drivers earn a sustainable income without needing to work excessively long hours. This can reduce fatigue-related accidents, as drivers are less likely to be overworked. There is a strong case for this approach – the PHV licensing regime after all is there to protect the travelling public.
3. Improvements to the quality of service: With guaranteed minimum earnings, drivers may be more motivated to provide higher quality service. This can include maintaining cleaner vehicles, being more punctual, and offering a more pleasant overall experience for passengers.
4. Economic stability: A minimum fare can contribute to the economic stability of the private hire vehicle industry. By ensuring that drivers earn
a
sustainable income, the industry can attract and retain skilled drivers, which is crucial for long-term growth and reliability.
5. Reduction in traffic congestion: Higher fares might discourage unnecessary short trips, which can help reduce traffic congestion in busy urban areas. This can lead to more efficient use of road space and potentially lower pollution levels.
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