This is a long document but it highlights the broad balanced approach which chief licensing officer Dawn French submitted to a Licensing meeting in July 2004.
Some members will immeidately notice the contrast between this balanced report and that of the bias reports submitted by some other councils of whom Brighton readily springs to mind.
Meeting: HACKNEY CARRIAGE LICENSING POLICY PANEL
Date of Meeting: 5 July 2004
Item Heading: THE REVIEW OF HACKNEY CARRIAGE VEHICLE LICENSING
POLICY
Contact Details: Dawn French Tel. (01245) 606940, Fax. (01245) 606681
Email (int./ext.)
dawn.french@chelmsfordbc.gov.uk
Recommendation
Taking into account the responses received during the consultation exercise relating to the quantity and quality of hackney carriage vehicles and the Government’s stated position on the removal of quantity limits, unless there is a strong justification that removal of the restrictions
would lead to significant consumer detriment as a result of local conditions, members are requested to make recommendations to the Cabinet, having regard to the options set out in the report.
1.0 Purpose
1.1
The purpose of this report is to set out the context for the review of policy regarding hackney carriage vehicle licensing and to identify key areas for members’ consideration and the matters requiring a recommendation to the Cabinet.
2.0 Introduction
2.1 (M6.1 CAB3 2004) At its meeting on the 16 June 2004, the Cabinet resolved to establish a policy panel ‘to consider in detail the responses to the public consultation on quantity and quality of hackney carriages in the Borough and to report back to the Cabinet at the earliest opportunity’.
2.2 The limitation on the number of licences is often referred to as ‘regulation’ of the trade; in those local authorities where there is no limit on the number of vehicle licences, they are often referred to as ‘deregulated’. This terminology is misleading as it implies that no regulations apply to hackney carriages. In all areas, whether the
number of hackney carriage vehicle licences is limited or not, quality controls are applied to licensed vehicles in the form of both pre-licence conditions and licence conditions. In this report the terms ‘limited and ‘delimited’ are used in relation to the controls on the quantity of hackney carriage vehicles.
3.0 Consultation Process
3.1 Members of the Executive resolved at their meeting on 7 April 2004 ‘that consultation be carried out on delimiting hackney carriage licenses issued in the borough and the quality of the service generally, the results and any recommendations to be reported to the June meeting of the Executive.’
3.2 A list of questions was sent to Hackney Carriage and Private Hire Operators. It was also sent to those with an interest in the subject; this group of people is collectively referred to as ‘Interested Groups’ throughout the report. The questions were intended to guide responses not to confine comments. Responses were invited by 21 May 2004.
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3.3 In order to assess public opinion on the topic, independent market research was commissioned by the Council’s Corporate Strategy and Communications Service. This consisted of 50 interviews with members of the Council’s Citizens’ Panel. An item was also placed on the Council’s website inviting responses from the public.
3.4 In addition to individual responses received from hackney carriage proprietors, the Chelmsford Taxi Association (CTA) responded on behalf of their members. The CTA represents all hackney carriage proprietors currently licensed by the Council.
3.5 A summary of the responses received during the consultation exercise relating to this subject is contained within this report. A list of those parties who responded is attached at appendix 2; however, the full responses will be made available for members via the Council’s Intranet, in the Group Rooms and during the meeting.
3.6 It should be noted that the consultation exercise was not intended to gather quantitative data but qualitative data on the issues. The number of responses from the various groups of interested parties has been indicated in appendix 2, but members are asked not to draw conclusions from those numbers.
4.0 Background
4.1 Section 37 of the Town Police Clauses Act 1847, as amended by section 16 of the Transport Act 1985, enables local authorities to licence taxis within their areas and to restrict the number of licences issued only if they are satisfied that there is no significant unmet demand for taxi services in their area.
4.2 Any person who is refused a licence on these grounds has a right of appeal to the Crown Court.
4.3 The current policy of the Council is to limit the number of hackney carriage vehicle licences. The current number of licences issued by Chelmsford Borough Council is 82. This resulted from a survey of unmet demand in 1997, which recommended the issue of six licences (minute M5 LS2 1998 refers). A survey in 1993 found no unmet demand; the survey conducted in 1990 recommended the issue of 10, but was increased to 16 on appeal.
4.4 A survey carried out in 2003 indicated that the current provision is inadequate to meet unmet demand and indicated that a minimum of 16 further licences are required to satisfy unmet demand.
4.5 45% of local authorities in England and Wales currently limit the number of vehicle licences granted; this represents 52% of vehicles outside of London. All local authorities in Essex limit the number of taxi vehicles licensed except Brentwood, Castle Point, Epping Forest, Harlow and Rochford.
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4.6 The issue of ranks has been raised by various parties during the consultation process. It is recognised that the current provision of rank space is inadequate for the existing hackney carriage fleet. A report identifying future options for the provision of ranks was made to the Licensing and Regulatory Committee in May 2002 (minute M9 LR3 2002 refers). There has been difficulty in progressing the feasibility studies but work is ongoing. It may be argued that any further release of vehicle licences will place additional pressure on those ranks. However, it is
unrealistic to expect provision of rank space to match the number of vehicles licensed and indeed unnecessary, as at any one time, some vehicles will be plying for hire, hired or not working.
4.7 In 2002, the Office of Fair Trading began an enquiry into the regulation of hackney carriages (taxis); this was extended to include regulation of private hire vehicles and the report ‘The Regulation of Licensed Taxi and Private Hire Vehicle (PHV) Services in the UK’ was published in November 2003. Its conclusions and the subsequent responses of the Transport Select Committee and the Government are reproduced at appendix 1.
4.8 In summary, the Government is ‘strongly encouraging all those local authorities who still maintain quantity restrictions to remove restrictions as soon as possible. Restrictions should only be retained if there is a strong justification that removal of the restrictions would lead to significant consumer detriment as a result of local
conditions.
4.9 The Department of Transport has now written to authorities that limit the number of hackney carriage (taxi) licences, requesting those authorities to review that policy and to publish the outcome by 31 March 2005. The letter is reproduced for members at appendix 3, together with annex C to the letter, which provides some questions that highlight the issues that will need to be taken into consideration. Any continuation of a policy of limitation will, in future, need to be justified in the Local Transport Plan.
5.0
Does the Current Restriction Show Clear Benefit for the Consumer?
Arguments that Restrictions Benefit Consumers
5.1 As stated, the Government is ‘strongly encouraging all those authorities who still maintain a quantity restriction to remove restrictions as soon as possible. Restrictions should only be retained if there is a strong justification that removal of the restrictions would lead to significant consumer detriment as a result of local conditions.
5.2 The views of Chelmsford hackney carriage proprietors, who responded to the consultation exercise, and that of the Chelmsford Taxi Association are that it would not be in the consumers’ interest if the limit were removed. This view was supported by one response from a Borough Councillor and the Chelmsford Chamber of Commerce. Some of the responses did not directly address the issue of consumer benefit, however, their views in this context have been deduced as follows.
5.3 These respondents argue that additional congestion in traffic caused by the extra vehicles would add delays to the time customers wait at a rank. In addition, many proprietors would feel pressured into driving at peak times, such as late at night, leaving the day time trade unserved.
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5.4 The Chelmsford Taxi Association believe that their organisation would not be able to continue if a policy of delimitation were introduced and therefore the benefits to the public which they believe it offers, would be lost; these benefits include collective negotiation for the rights for members of the association to use the Chelmsford station rank, a code of conduct for drivers and an agreement amongst association members on fare tariffs for longer journeys.
5.5 Another argument against an increase in the number of licences to be issued is that the standard of vehicles would decline, due to proprietors having less income to invest in the proper maintenance and repair of vehicles. In addition, it is suggested that the Council could not adequately ensure that all drivers were properly licensed.
5.6 All vehicles currently undergo a vehicle examination, as part of the licensing process; this is in addition to the MOT. Further, the Council operates a system of calling vehicles in for inspection, at random. The Licensing and Regulatory Committee agreed an enhanced vehicle inspection policy in March 2004, which sets out the enforcement approach to vehicles that are found to be defective. This policy will continue to apply to all vehicles, however many are licensed by the Council.
5.7 In respect of drivers, again the existing conditions will continue to apply to all drivers, irrespective of how many are licensed.
5.8 Many proprietors expressed concern that larger companies may enter the taxi market and force out the independent operators by competitive practices. Once a monopoly is achieved, there would be no pressure for that provider to continue to meet all the needs of the travelling public. (This matter is further discussed in section 7.22)
5.9 Some proprietors expressed concern that private hire operators may ‘convert’ their licences to hackney carriage licences, so reducing the number of vehicles available to be pre-booked. This could only happen if members did not impose additional criteria for any new licences made available. However, hackney carriages can also be pre-booked for journeys. Arguments that Restrictions Do Not Benefit Consumers
5.10 Hackney carriage operators from outside of the Borough and some Private Hire Operators from within the Borough do not support the view that restrictions benefit the consumer; these respondents consider that consumers are very poorly served by the existing hackney carriage trade. They cite many of the same points as the Office of Fair Trading, such as queues. Some have conducted their own market research and believe that there is sufficient unmet demand for them to invest significant amounts of money expanding their existing businesses, to include providing taxis in
Chelmsford.
5.11 They also consider that more taxis in and around the town would cause a change in behaviour of customers, who would become more used to hailing taxis rather than walking to ranks. This would have personal safety advantage, both in respect of reducing the potential for incidents of disorder in queues and would eliminate the need for those less familiar with the town to walk away from populated areas, looking for ranks.
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5.12 Most of the ‘interested groups’ who responded to the consultation exercise and the findings of the independently commissioned public opinion research considered that, providing the quality of both the vehicles and drivers can be assured, it would not be in the consumers’ interests to retain restrictions, (see paragraphs 5.6 and 5.7). Their support for delimitation centred around issues related to queues, community safety
and choice in public transport.
5.13 Evidence in both the unmet demand survey and the independent market research indicated that there is a significant demand for vehicles, particularly in the evening, which is currently being met by other transport options (such as private hire vehicles, people driving themselves or being collected) despite many people wanting to use taxis.
5.14 There is evidence that the provision of additional, readily accessible taxis late at night is one essential part of any strategy for improving community safety in town centres, thus reducing crime and people’s fear of crime. Evidence to the Office of the Deputy Prime Minister’s enquiry into Urban Renaissance indicated that where patrons can leave town centres readily, without queuing for long periods or mixing with patrons of other establishments, then the levels of crime, disorder or anti-social behaviour decrease. This is not to imply that taxi drivers are expected to act as
policemen’ or to accept fares from any person who poses a risk to the health and safety of the driver. It is as a consequence of the vast majority of law abiding citizens being able to leave the town and avoid getting involved in general disturbances. The Violent Offences Task Group (established under Chelmsford Crime and Disorder Partnership), the Town Centre Manager, the Head of Municipal Engineering and Essex County Council endorse this view.
5.15 In addition to the general level of unmet demand, South Woodham Ferrers receives no taxi services, although provided with a rank and obviously benefiting from a railway connection. (In recognition of the demand in this area, it was suggested during the consultation exercise that a "zone" be created for South Woodham Ferrers, having the effect of limiting certain taxis to trade only in that area. However, there is no statutory power to create zones, (only to amalgamate them where they
exist).)
Decision Area ‘A’
In view of the Government’s position that any retention of quantity limitation must be justified as being in the consumers’ interests and the views submitted during the consultation exercise on this matter, Members must decide whether:
Option 1: They are opposed to removing the quantity limit, on the basis that a specific case can be made that retaining a limit is in the interests of consumers.
Option 2: They are in favour of removing the quantity limit, (or moving to a position of removing quantity limitation). In the case of option 1, members must then decide at what level to retain the restriction. These options are further discussed in section 6. In the case of option 2, members must then decide how they wish to move to a position of delimitation. These options are further discussed in section 7.
6.0 Options Within Maintenance of Quantity Restrictions
6.1 Within the principle of maintaining an overall restriction on the number of licences issued for hackney carriages, members have further options. These are discussed below.
6.2 Retain the status quo of 82 licences: Theoretically, members have the option of maintaining the limit at the existing level of 82 licences. However, such a policy would be successfully challenged in the Crown Court. Such a challenge could result in the Crown Court directing the authority to issue any number of plates that it decided was appropriate, as well as awarding costs against the Council. (The same challenge and outcome would result if members decided to increase the number of licences but by less than the sixteen indicated as being necessary to meet the significant level of unmet demand.)
6.3 On the basis that this option would be over-ruled by the Crown Court, this option is not referred to again.
6.4 Issue a further sixteen (16) licences: the Council’s latest survey of unmet demand concluded that there is significant unmet demand for the services of hackney carriages in the Borough and that an additional sixteen (16) hackney carriage licences would be required to eliminate the significant unmet demand. Any person refused a licence, on the basis of the new limit having being met, could still challenge this policy in the Crown Court. The burden of proof would be on the Council to show that there is no significant unmet demand. Halcrow, who conducted the survey on the Council’s behalf, consider that the last survey, conducted in 2003, would be valid for three years; however, the significant level of economic growth, development and rising population in Chelmsford may be cited as factors which undermine the continued reliance on the 2003 survey.
6.5 It may also be argued that with such a significant level of unmet demand in parts of the Borough, a larger number of licences are required to ensure adequate services to all parts of the Borough are achieved. Many challenges have been made in respect of the interpretation of ‘significant demand for services which is unmet’ and the likely outcome of such a challenge is more difficult to predict. It can also be expected that applications will be received for a greater number of licences than sixteen. In this case, selection criteria will need to be established as a way of distributing the licences equitably.
6.6 The Chelmsford Taxi Association and the Chelmsford hackney carriage
proprietors who responded to the consultation exercise support this option. It was strongly argued that any greater increase in the issue of licences would lead to existing licence holders suffering a significant reduction of earnings.
6.7 In addition, as a consequence of the Council’s policy of restricting the number of licences, the ‘plate’ has acquired a value, as any commodity can in a restricted market. Some existing licensees have invested in ‘the plate’ in the past and place some reliance on their ability to sell it to secure their financial future. Those who are successful in obtaining licences during this release of licences will not have to make such an investment, and therefore the view of existing proprietors is that the number of additional licneces should not exceed sixteen, in order to preserve some value on the plate. However, if members decide to increase the standard for new licensed vehicles, discussed in section X, the initial investment in a suitable vehicle may be higher than that incurred by existing proprietors.
6.8 Proprietors without existing hackney carriage licences state that it is very difficult for those wanting to enter the trade when a limit on numbers is in force. Existing and prospective proprietors have commented that the price of plates not only restricts access to existing licences, it prevents proprietors from being able to plan the growth of their business. It is well known that the value of a plate can be reduced or eliminated at any stage by the decisions of the Council or central government and some proprietors are reluctant to finance an asset that could disappear overnight.
6.9 It should also be noted that individual hardship of proprietors or drivers, as a consequence of loss of income or value of plate, would not be a basis for the Courts to intervene (R v Great Yarmouth Borough Council, ex parte Sawyer 1989).
6.10 Issue a greater number of licences than sixteen whilst still retaining an upper limit: Members may determine to issue more licences than that recommended by the unmet demand survey, on the basis of, amongst other matters, maintaining a level in excess of the identified level of unmet demand and in a legitimate attempt to address the issue of unmet demand in a significant part of the Borough or at particular times of the day. A recent judgement (R (on the application of Johnson) v Reading Council 2004) confirmed that local authorities have a wide discretion to grant additional licences and that the findings of an unmet demand survey did not fetter the Council’s discretion to issue more than that number. The number of additional licences members resolved to issue would determine the likely effectiveness of a challenge in the Crown Court, on the basis that significant unmet demand still remained. As in the option set out in 6.5 above, selection criteria will need to be established as a way of
distributing the licences equitably, in the event that the number of applications for those licences exceeds the number of licences available.
6.11 The Chelmsford Taxi Association and the Chelmsford hackney carriage proprietors who responded to the consultation exercise oppose this option, on the basis that the unmet demand has been established in the survey as 16. Their points of opposition to removing the restriction, set out in paragraphs 5.3-5.5 and 5.8-5.9 are also relevant here, but to a lesser degree.
6.12 Those supporting removal of the restriction oppose this option on the same grounds as they oppose any restriction, set ou in paragraphs 5.10–5.15.
6.13 If members are minded to support this option, they may find the table set out in paragraph 8.2 useful in ascertaining the number of licences to make available over and above sixteen. Decision Area ‘B’
Whilst wanting to retain an overall limit on the number of licences issued to hackney carriage proprietors, Members must decide whether to:
Option 1 Issue a further sixteen (16) licences,
Option 2 Issue a greater number of licences than sixteen whilst still retaining an upper limit.
In the case of either option, members will need to agree the selection criteria for those applying for licences and the process for selection in the event of over subsciption. These issues are further discussed in section 9.
7.0 Options Within Removing Quantity Restrictions
7.1 Within the principle of removing the restriction on the number of licences issued for hackney carriages, members have further options, detailed below.
7.2 Move to a position of delimitation ‘immediately’: Such a policy is totally opposed by the Chelmsford Taxi Assoication and existing Chelmsford hackney carriage proprietors. They express serious concern about the impact on the consumer and their trade, referred to in paragraphs 5.3-5.5 and 5.8-5.9.
7.3 The existing ‘plate values’ on licensed hackney carriage vehicles are very high. Any immediate move to a position of derestriction may have serious financial consequences for existing licence holders.
7.4 The majority of existing licence holders are small, independent operators. The capability and capacity for these businesses to react to sudden change will be limited in most cases. There would be no benefit to the travelling public if there were a sudden loss of some of these operators.
7.5 Those opposed to this option also indicate that an increase in the number of hackney carriages would put pressure on existing ranks. It has already been acknowledged that further rank space does need to be made available and this work is being proactively pursued by the Head of Municipal Engineering Services, but it would be unrealistic to expect all vehicles to require rank space at any one time.
7.6 Many of the Chelmsford hackney carriage proprietors have indicated that the provision of an unlimited number of licences would cause traffic congestion, particularly around Chelmsford railway station, increasing the levels of pollution. The Head of Municipal Engineering Services has advised that an increase in the number of taxis would not significantly add to the current traffic volumes and, in practice, it is unlikely that all taxis would want to operate around the Chelmsford railway station, at the same time.
7.7 This option is supported by those wanting to enter the trade, these being some private hire operators already operating in the Borough, wishing to expand their business to include taxis, some taxi operators from outside of the Borough who see substantial business opportunities in Chelmsford and some drivers, currently licensed in the Borough.
7.8 Their view is that it is very difficult for those wanting to enter the trade when a limit on numbers is in force. Those wanting to enter would need to find an existing proprietor willing to transfer his licensed vehicle; in addition they would need to finance the purchase of the vehicle as well as the high licence premium. Not only does the process restrict access to the market, but the cost of the premium and the uncertainty over the continuing value of such a premium, also prevents most people from entering the trade.
7.9 In respect of rank space, the experience of some respondents is that it becomes less of an issue when vehicles go to where the customers are, rather than wait for the customers to go to the taxis at the ranks.
7.10 In respect of congestion, some respondents claim that the use of technology enables them to predict customer requirements more accurately, which enables them to match passenger and vehicle needs more closely. This prevents excessive taxis driving around when few customers are waiting and conversely ensures a larger number of vehicles are available at a time when customer demand is high.
7.11 Many local authorities, including five in Essex, have no policy for limiting the number of licensed taxis. The experience of most authorities has not been one of excessive demand; indeed, in some authorities that had held a waiting list during limitation, applicants on that list did not proceed with an application, once the limit had been removed.
7.12 Combining an increase in licences issued with raised quality conditions for vehicles, as in the last issue of additional licences, has the effect of improving the quality of the fleet. At the same time an increase in outlay required by a person to enter the trade will deter casual entry, tempering any increase in the number of vehicles. Any new entrants to the hackney carriage market would have to satisfy themselves that there is sufficient trade to sustain the initial investment to provide a satisfactory income. This could have the advantage of new services being operated in response to the demands of the customers.
7.13 Members should be aware that each of the remaining eight Essex authorities, who currently have a policy of limitation, will need to consider their own policies of limitation, prior to March 2005. Any interest in obtaining additional licences in Chelmsford may be tempered by the prospect of the release of any additional licences in neighbouring boroughs.
7.14 The ‘interested bodies’ consulted on this topic are in support of removing the limit on licences but did not express a view on the manner in which such a position should be achieved.
7.15 Move to a position of substantial delimitation in a phased approach: Members have the option of moving to a position of delimitation on the quantity of hackney carriage licences, in a phased approach. To achieve this, it would be necessary to retain a limited regime for a predetermined and transitional period of time, during which the limit is progressively raised by the issue of new plates and at the end of which no limit would be retained. This option was not directly the subject of the consultation exercise, therefore the following views have been drawn from those who did express a view or deduced from the responses.
7.16 This policy would be opposed by the Chelmsford Taxi Assoication and existing hackney carriage proprietors, for the same reasons as detailed in paragraphs 5.3-5.5 and 5.8-5.9.
7.17 Those wanting to enter the trade would agree with this option, but it can be deduced not with the same support as removing the limit altogether. Their views are detailed at paragraphs 5.10-5.15.
7.18 As indicated in 7.14 the ‘interested bodies’ consulted on this topic are in support of removing the restriction but did not express a view on the manner in which such a position should be achieved.
7.19 However, there are a number of local factors that can be extracted from the responses that are pertinent to this option.
7.20 As stated, the existing ‘plate values’ on licensed hackney carriage vehicles are very high. A phased approach to delimitation might give these businesses an opportunity to plan and adapt their business and finance to account for this change.
7.21 As stated, the majority of existing licence holders are small, independent operators with limited capability and capacity to react to sudden change. A phased approach may assist these businesses to undergo a smooth tansition from the existing to a new position.
7.22 On the matter of concern expressed by many proprietors, that larger companies may enter the taxi market and force out the independent operators by competitive practices, a policy could be introduced to initially restrict the number of vehicle licences held by any one operator, during the transitional period mentioned in 7.15 above. Such a policy would again support smaller businesses giving them time to adapt to competition and a new business environment. The total number of hackney carriage vehicle licences held by any one proprietor currently is five (5).
7.23 It is possible that the Borough will be faced by a high demand for hackney carriage licences. This would appear unlikely having regard to the experience of neighbouring authorities and as a consequence of other authorities having to review their position with respect to limits on licence numbers. However, a phased approach to releasing licences would enable members to assess the experience of both the existing and new taxi trade.
7.24 It has been acknowledged that there is a shortage of rank space in the Borough which is being proactively addressed, but which will take time to achieve improvements. A transitional period during which the limit was significantly increased but not removed entirely would provide an opportunity for existing or developing rank issues to be addressed.
Decision Area ‘C’
Whilst wanting to move to a position of derestriction, Members must decide whether Option 1 To remove the restriction on the number of licences available to hackney carriage proprietors, as soon as reasonably practicable,
Option 2 To remove the restriction on the number of licences available to hackney carriage proprietors, in a phased approach, involving a transitional period as outlined. In the case of option 2, members must decide the number, phasing, selection criteria for those applying for licences and the process for selection in the event of over subsciption. The
number and phasing is discussed in section 8; selection criteria and process for selection are discussed in section 9.
8.0 A Phased Approach to Removing Quantity Restrictions
8.1 The ratio of hackney carriage vehicles to Chelmsford’s population is currently 1 hackney carriage per 1914 people (calculation based on 82 licensed vehicles and 157000 population).
8.2 The table below sets out how the number of taxis and private hire vehicles in Chelmsford compares with authorities in the United Kingdom. (Source: OFT Statistical Analysis). The numbers, in bold and brackets within the table, are the number of additional hackney carriage licences that would need to be made avialble to achieve the same ratio.
Type of Authority Unlimited Limited
Taxis only: All 1.22 (109) 0.94 (65)
Mixed Urban/Rural 1.25 (114) 0.75 (36)
Chelmsford -- 0.52 (82 taxi licences currently)
Taxis and Private Hire Vehicles All 2.21 (87) 2.93 (200)
Mixed Urban/Rural 2.47 (128) 2.65 (156)
Chelmsford -- 2.18 (260 vehicle licences currently)
8.3 The calculations in respect of taxis and private hire vehicles assume no
increase or decrease in the overall number of private hire vehicles.
8.4 It has not been possible to take account of the number of ‘O’ licensed vehicles operating in the Borough, within these calculations, as these are not vehicle specific.
8.5 Members can see from these calculations that to compare with the average mixed urban/rural areas that currently have no limitation, the additional number of licences that need to be made available ranges from 114 – 128 and that a minimum of 36 would need to be made available to compare with the average mixed urban/rural area, that still maintains a quantity limit.
8.6 In addition to determining the upper limit on numbers to be retained in the transitional period, members must decide how many licences would be released in each of the transitional years and any limit per operator, either in total or phased over the transitional years, (as well as the selection criteria for those applying for licences and the process for selection in the event of over subsciption, discussed in section 9).
Decision Area "D" Whilst wanting to take a phased approach to a position of delimitation, Members must decide:
• The length of the transitional period
• The total of number of licences to be released, during the transitional period,
• The phasing, by year, of the release of licences
• The number of licences any one operator can obtain each year or in total during the transitional period.
9.0 Selection Criteria and Process for Selection
9.1 As has been stated, the retention of any limit will require members to determine the selection criteria for applicants and the selection process, in the event of over subscription. (On all previous occasions when additional licences have been issued in Chelmsford, the number of applicants has exceeded the number of licences available, resulting in a selection process having to be administered.)
9.2 Quite clearly, any selection criteria must be relevant and the selection process equitable and transparent.
9.3 In respect of selection criteria for applicants, those that have been used in the past by this Council and those used by other councils are listed below. (It should not be implied that all criteria have to be selected, or that other criteria would not be relevant. In addition members do not have to specify any criteria for applicants, other than those that already exist as pre-licence conditions for all hackney carriage proprietors.)
• The applicant’s proposals for optimising the use of vehicles, particularly
at peak times
• Consideration as to whether the new licence will be the main business
and/or source of income
• A statement to the effect that any disabled accessible vehicle will be
used to its full potential
• Information on the applicant’s connections with Chelmsford:
! Address
! Place of current employment
! Length of service in current employment
! Any other connection with the Borough
• Information on applicant’s driving experience
! With hackney carriage vehicles
! With private hire vehicles
• Professional and personal references
• Members will, in the event of over subscription, consider only single
applications for the grant of the new additional licences.
• Financial Services will assess the financial standing of applicants
• 2 years relevant experience in the transport industry, either as an
individual or within the company
9.4 In the event of more applicants meeting the selection criteria than the number of licences available, members must determine a mechanism for allocating the licences.
9.5 On previous occasions, this has been achieved by members interviewing those applicants and selecting appplicants against the criteria descibed in 9.3. However, those who have been unsuccessful in the process have not had the opportunity for feedback as to the reasons for their lack of success; this has resulted in some concern being expressed about the transparency of the process.
9.6 An alternative method could be for the successful applicants to be entered in to a ‘lottery’ process, whereby each applicant who meets the criteria has an equal chance of selection.
9.7 Whichever selection criteria are selected by members and whichever selection process is agreed, members should bear in mind that this application procedure will need to be completed by both applicants and the Council’s Licensing Section, (potentially every year depending on the option chosen.) It would therefore be in the interests of all those involved that the process was as efficient and effective as possible to achieve the overall objectives.
Decision Area ‘E’
Whether the members have decided to retain an overall limit or move, in a phased approach towards delimitation, members must decide
• the selection criteria for applicants
• a selection process, in the event of over subscription must be agreed
10.0 Quality Controls
10.1 During the consultation exercise, respondents were invited to comment on a number of suggestions regarding the quality of vehicles. The use of taxis is an important public transport option. The quality of public transport vehicles is an important factor in the public choosing this option, and therefore is it was considered appropriate to review the vehicle standards at the same time as considering the release of any further licences. Aspects of vehicle quality and the responses during the consultation exercise received are detailed below.
10.2 Disabled Accessible Vehicles: The views of many of the Chelmsford hackney carriage proprietors was that an entire fleet of disabled accessible vehicles would not be appropriate, as many able bodied or those with certain disabilities found the disabled accessible vehicles uncomfortable or difficult to access. Many indicated that any new licences issued should be conditional on the vehicles being disabled accessible, as with the previous issue of licences, leaving the existing vehicles to meet the needs of those with other requirements.
10.3 However, all groups representing the disabled and those with a general interest in public transport expressed the view that all new and existing vehicles should be accessible, either immediately (for new licences) or within a short timescale (for existing licensed vehicles). This is on the basis that those with disabilities should have the same travel choices as those without, that is they should not have to pre-book or wait for long periods for an accessible taxi.
10.4 Regulations due to be made under the Disability Discrimination Act 1995, regarding taxi accessibility, are expected soon and will be introduced in phases. Chelmsford is in the first phase and will result in all taxis being required to be accessible to the disabled between 2010 and 2020.
10.5 It should be noted that when licences were released in 1999, they were conditional on the vehicle being accessible for the disabled.
10.6 Independent of the consultation exercise, a letter has been received from the Spinal Injuries Association, expressing concern over rear loading accessible taxis. It has been the practice of this authority to require side-loading accessible taxis, to address the same concerns as those raised by the Spinal Injuries Association, but this is not a formal policy of the Council. If members are minded to require disabled accessible vehicles, they are requested to specify that they be side-loading vehicles only.
10.7 Vehicle Livery: The majority of respondents either saw no advantage to full livery or were opposed to it on the grounds that it would interfere with their company specific livery. Many companies not only want the public to identify a taxi, but more specifically their company and taxis. However, all respondents were in support of various measures that could be taken to improve taxi identification, such as roof signs of specified sizes and signage on the vehicle identifying it as a licensed taxi.
10.8 Essex County Council, Chelmsford Area Access Group, the Violent Offences Task Group and The Council’s Head of Municipal Engineering Services were all strongly in favour of a standardised livery on the basis of assuring the public that the vehicle was licensed to ply for hire. A livery that strongly identified taxis would also enable them to use bus lanes; this would give advantages to both the fare payer (the waiting time elements of the fare would decrease) and the driver/proprietor (as they would be available sooner for the next hire and more of the public say they would use taxi services if fares were cheaper or more consistent/predictable).
10.9 Licence Requirements regarding Age of Vehicles: The current policy in relation to the age of vehicles is that vehicles be no more than five (5) years old when first licensed and can remain licensed for an indefinite period, subject to compliance with regular vehicle inspection checks. In light of the mileage and general wear and tear to which these vehicles are subject, the proposal put during consultation was that vehicles are no more than three (3) years old when first licensed and can remain licensed until it is no more than six (6) years old, or in the case of a purpose built disabled accessible vehicle, no more than ten (10) years old.
10.10 Most respondents felt that the age of the vehicle was immaterial either for first or subsequent licences. Reliance was placed on the Council’s vehicle inspection policies to ensure that a vehicle continued to be safe to drive. However, some responses indicated that old vehicles did not give the taxi trade a very good image and, even though road worthy, may be less comfortable, with the interior showing excessive wear and tear.
10.11 If an upper age limit were to be introduced, subject to the vehicle passing the vehicle inspection tests, 10 years was suggested as being most appropriate, and the point at which most responsible proprietors change their vehicles, in any event.
10.12 However, the point was made by several respondents that the MOT test and Council’s vehicle inspection should be spread equally during the year, resulting in a test every six months, at no additional cost (rather than at present whereby the MOT and the vehicle inspection are often carried out at the same time).
10.13 No Smoking in Vehicles: The vast majority of respondents supported the view that smoking should not be permitted in a vehicle either by the driver or the passengers, at any time. However, some Chelmsford hackney carriage proprietors considered this would be an unreasonable imposition on drivers, whilst there were no passengers on board, and an unreasonable imposition on passengers undertaking long journeys, to airports for example. The Chelmsford Taxi Association currently imposes a ban on smoking by drivers and passengers, whilst passengers are on board.
10.14 Other Suggestions: Respondents were invited to make any other relevant comments. Suggestions included:
• Advice/training for the carriage of children and/or provision of child seats
• Random drug testing of drivers
• Driver training in respect of improved driving, customer service, first aid,
and/or assisting those with disabilities
• Compulsory maintenance regime
• Reduced licence fees for those with disabled accessible vehicles
• Use of ‘mystery shoppers’ to assess driver and vehicle standards
Decision Area ‘F’
In recognition of the impact of the quality of vehicles on the public confidence in this form of public transport, members must decide whether
• new licences should be conditional on the vehicle being accessible for the disabled, and side-loading only
• existing hackney carriage proprietors be required to provide vehicles accessible for the disabled, and side-loading only, within a determined period
• new licences should be conditional on the vehicle complying with a specified livery, and what that livery specification should be
• existing hackney carriage proprietors be required to ensure vehicles comply with the livery specification, within a determined period
• the current licence conditions regarding the age of the vehicle at first licence and/or subsequent licensing should be amended
• proprietors should be required to apply a smoking ban in the vehicles at all times or when the public are on board
• any other additional conditions, relating to the quality of vehicles should be introduced and applicable to new licences and whether such conditions should be applicable to existing licensed vehicles.
Conclusion.
The provision and availability of high quality hackney carriage vehicles and drivers is an essential element of the Council’s local transport and community safety strategies. Taxis provide a valuable service to a wide variety of the travelling public, whose needs for such transport are many and diverse. They, together with private hire vehicles, are potentially the
only public transport available 24 hours a day. However, the current provision does not appear to be meeting the needs of the public sufficiently and therefore to do nothing is not an option. The consultation exercise has generated a large number of differing views. Any decision by the Council could have a significant impact on those with an interest in the provision of taxis, be they the travelling public, the existing proprietors, prospective
proprietors or transport and safety professionals. In addition, any decision of the Council could be the subject of legal challenge.
Background Papers Hackney Carriage Unmet Demand Study Final Report December 2003 Office of Fair Trading Report ‘The Regulation of Licensed Taxi and Private Hire Vehicle (PHV) Services in the UK’ House of Commons Transport Committee: The Regulation of Taxis and Private Hire Vehicle
(PHV) Services in the UK, Third Report House of Commons Transport Committee: The Office of Fair Trading’s Response to the Third Report of the Committee: The Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK, Fifth Report Government Response to the OFT Report: The Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK
Responses to consultation exercise
Summary of Legislation and National Issues Appendix 1
Legal Position: The primary legislation governing the licensing of hackney carriage vehicles is the Town Police Clauses Act 1847 and the Local Government (Miscellaneous Provisions) Act 1976. Until the Transport Act 1985 came into effect, licensing authorities had an unfettered power
to limit the number of hackney carriage vehicles that it would licence. Section 16 of the Transport Act removed that unrestricted power. Hackney carriage licences may still be limited but only on the following basis:
‘the grant of a licence may be refused, for the purpose of limiting the number of hackney carriages in respect of which licences are granted, if but only if, the person authorised to grant licences is satisfied that there is no significant demand for the services of hackney carriages (within the area to which the licence would apply) which is unmet’. Any person who is refused a licence on these grounds has a right of appeal to the Crown
Court.
Office of Fair Trading Report ‘The Regulation of Licensed Taxi and Private Hire Vehicle (PHV) Services in the UK’
The Office of Fair Trading (OFT) commenced its study in August 2002 and published its report ‘The Regulation of Licensed Taxi and Private Hire Vehicle (PHV) Services in the UK’ in November 2003. In the OFT report the term taxi is used throughout to mean hackney carriages. It contained the results of their study into:
• the nature and structure of the taxi and PHV market
• the regulatory framework and the impact of existing regulations on the market for taxis and PHVs, and
• the effectiveness of competition in the market
The findings of the study into applying quantity controls were that:
• there are fewer taxis per head of population
• people wait longer for taxis
• people often have to use less suitable transportation as an alternative to a taxi; this has safety implications
• a shortage premium on taxi licences is often created
• waiting lists to acquire a taxi vehicle can be long
The OFT concluded that quantity controls do not serve the best interests of consumers and so as well as recommending to the government that legislative provisions that allow licensing authorities to impose quantity controls be repealed, they have also recommended that licensing authorities with quantity controls remove them using existing powers.
House of Commons Transport Committee: The Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK, Third Report
The Committee decided to examine the OFT study and to hold a hearing, to see whether it wished to make comments to the Government. The committee focused on the provision of taxis and private hire service outside of London.
The Transport Select Committee concluded that the ‘OFT report manifestly did not contain the evidence required to support its only proposal for legislative change: the abolition of quantity regulation. Its figures only supported the case with considerable adjustment, its statistical and survey evidence was flawed and it failed to consider the relationship between
the taxi and private hire markets. Nor did the OFT explain why the taxi and PHV market has been the fastest growing form of transport over the past 25 years, and has grown by more than 40% in real terms since 1994, if quantity restrictions have been so detrimental. Its recommendations on quantity control should be rejected.
House of Commons Transport Committee: The Office of Fair Trading’s Response to the Third Report of the Committee: The Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK, Fifth Report
The Office of Fair Trading submitted further evidence and explanation, in defence of its original position, to the Committee, in response to their third report. The Committee concluded that they saw nothing in the OFT’s reply to make them change their views of the OFT’s recommendations, of the information which underlie them and of the OFT’s use of that
material.
Government Response to the OFT Report: The Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK
The Government responded to the OFT report in March 2004; it indicated that its response had regard to the reports of the Transport Select Committee. The Government agreed that consumers should enjoy the benefits of competition in the taxi market and considered that it
was detrimental to those seeking entry to a market if it was restricted. The Government therefore strongly encouraged local authorities that still maintain quantity restrictions to remove such restrictions as soon as possible. ‘Restrictions should only be retained if there is a strong justification that removal of the restrictions would lead to significant consumer detriment as a result of local conditions’.
However, rather than move to a legislative solution, the Government is giving local authorities the opportunity to assess their own needs. Therefore the Government will be writing to those authorities that maintain quantity restrictions, asking them to review by March 2005, the local case for such restrictions and to make their conclusions available to the
public. Guidelines will be issued on quantity restrictions, including the level of service available to consumers and consumer choice, to ensure that decisions to impose restrictions are based on strong up-to-date evidence of benefits to consumers locally. If restrictions are not shown to be delivering clear benefits to consumers, it is the view of Government that
local authorities should remove them. The Government indicate that such a review should be undertaken at least every three years thereafter, but also indicate that they, together with the OFT, will review progress made towards the lifting of controls in three year’s time.
The Government is also intending to produce best practice guidance relating to quality issues and fares, to be published by the end of 2004.
Government Response to the Transport Committee’s Report on the Regulation of Taxis and Private Hire Vehicle (PHV) Services in the UK
The Government have published their response to the Transport Select Committee’s two reports. In summary, it acknowledges some of the criticisms that the Committee had of the OFT report, whilst still fundamentally supporting the recommendations of the OFT. It
considers that its response, encouraging local authorities to remove the limit or evidence the consumer benefit of retaining that limit, will enable consideration of local circumstances to prevail.
Breakdown of Respondents to Consultation Exercise Appendix 2
In no order of priority, the following summarises the breakdown of respondents to the consultation exercise, conducted to obtain qualitative views on the matters of quantity and quality controls, in respect of hackney carriage vehicle licensing:
• 28 taxi proprietors, from within the Borough (joint responses counted as one response)
• 1 taxi proprietor from outside the Borough
• 6 proprietors, who identified themselves as being joint hackney carriage and private hire proprietors from within the Borough
• 4 private hire proprietors from within the Borough
• 1 private hire and bus operator from within the Borough
• 3 drivers
• 1 councillor
• 4 members of the public
• Chelmsford Taxi Association
• Essex County Council, Passenger Transport Section
• Chair of the Chelmsford Youth Council
• Essex Coalition of Disabled People
• Chelmsford Area Access Group
• Essex Police, Road Police Training
• Chairman of the Violent Offences Task Group, established under the Chelmsford Crime and Disorder Partnership
• Chelmsford Borough Council, Municipal Engineering Services
• Chelmsford Borough Council, Road Safety Officer
• Chelmsford Chamber of Commerce
• Chelmsford Town Centre Manager
Responses were received by letter, electronic mail or by personal discussions with the Commercial Services Manager. 50 interviews were also conducted with members of the Chelmsford Citizens’ Panel, by Marketing Assistance, to obtain views from the travelling public.
3
Dear Sir/Madam,
Government request to all councils restricting the number of taxi licences in England and Wales outside London to review Quantity Control policies
1. I am writing to ask you, following the announcement of a Government Action Plan for taxis (and private hire vehicles), to review your local policy to restrict the number of taxi licences that you grant and to publish the outcome by 31st March 2005. Background to this letter
2. As you will know, the Office of Fair Trading published a market study into the regulation of taxis and private hire vehicles in the UK in November 2003. The Government responded in respect of England and Wales on 18th March by means of a Written Statement in the House of Commons.
3. The Written Statement included an Action Plan for Taxis and Private Hire Vehicles that I attach as annex A to this letter. Paragraphs 1 to 11 of the Action Plan, in particular paragraphs 4 to 8, cover restrictions on the number of taxi licences issued by licensing authorities.
4. As a result, this letter is for the attention of those taxi licensing authorities in England and Wales outside London that restrict the number of taxi licences that they issue. I am addressing this letter to the Chief Executives of the councils listed at Annex B1. For ease, I enclose a further copy for the appropriate taxi licensing officer. I am also copying this letter for information to the Chief Executives of County Councils and Passenger
Transport Executives who will need to include justification of local policies to restrict taxi licences in their Local Transport Plans2.
The power to issue taxi licences
1 Please note this list has been compiled from the latest information that we hold centrally, but some councils may have subsequently changed their local policy with regard to quantity restrictions. In such cases, we should be grateful if you would let us know of the policy change.
2 Those few authorities that will not be required to produce a Local Transport Plan will still be expected to justify their quantity restriction policy if any of the districts in their area have such restrictions.
Rupert Cope Appendix 3
Head of Taxi/PHV Branch
Buses and Taxis Division
3/12
76 Marsham Street
London
SW1P 4DR
Direct line: 020 7944 2291
Fax: 020 7944 2279
GTN: 3533 2291
e-mail:
Rupert.Cope@dft.gsi.gov.uk
Web site:
www.dft.gov.uk
Our Ref: PT2 10/9/30
16 June 2004
5. Section 37 of the Town Police Clauses Act 1847, as amended by section 16 of the Transport Act 1985, enables district/borough councils or unitary authorities to license taxis within their area and to restrict the number of taxi licences issued only if they are satisfied that there is no significant unmet demand for taxi services in their area.
6. In effect, this means that a council can:
• issue a taxi licence to any applicant meeting the local application criteria
• grant at least such number of taxi licences as it considers necessary to ensure that no significant unmet demand remains
• refuse to grant additional taxi licences provided that it is satisfied that there is no significant unmet demand. However
• if a council is unsure of the presence or absence of significant unmet demand it is not in a position to refuse to grant a taxi licence provided the application criteria are met.
The Government's position
7. The Action Plan makes clear that the Government believes restrictions should only be retained where there is shown to be a clear benefit for the consumer, and that councils should publicly justify their reasons for the retention of restrictions and how decisions on numbers have been reached. Thus, the Government considers that, unless a specific case can be made, it is not in the interests of consumers for market entry to be refused to
those who meet the application criteria.
8. However, the Government also makes clear in the Action Plan that local authorities remain best placed to determine local transport needs and to make the decisions about them in the light of local circumstances. So it is not proposing at this time to take away the power to restrict taxi licences from local authorities. What we are asking you to do
9. Accordingly, we ask you to review the case for restricting taxi licences for your area and to make that review public.
10. Though this is a new request, we do not consider that this should be burdensome in the light of what you should already be doing for your licensing area in respect of issuing taxi licences.
11. It is of course for you to make the case for your area in the light of your local knowledge of local needs and circumstances. Inevitably, this will mean that you will need to know whether or not there is any unmet demand for taxi services in your area. For example, if your understanding of (unofficial) taxi plate values in your district is that they are high, this
would seem to indicate that there is significant unmet demand for taxis in your area.
12. Unless you are confident of the situation in this regard in your area, your consideration may therefore necessitate an unmet demand survey. However, such a survey may not be necessary if a recent survey can be demonstrated to have addressed the issues adequately.
13. In those areas that need to undertake a new unmet demand survey, the Action Plan makes clear that for the survey to be effective, latent demand should be taken into account.
14. To help you formulate and carry out a comprehensive review and reach a satisfactory conclusion, we thought it might be useful to provide some questions that highlight the issues that you will almost certainly need to take into consideration.
The checklist of questions is at Annex C. Please note that the checklist is not exhaustive, but is offered in the spirit of aiding local consideration.
15. In reaching your decision, we would also ask you to take into account the advice we issued to all councils about local accessibility policies in September 2002. In particular, if you are lifting restrictions or issuing new taxi licences because you have found unmet demand in your area, we would urge you to consider whether the new licences should be
for accessible vehicles. For ease, that advice is attached at Annex D.
16. We would encourage you to make all the evidence gathered to support the decisionmaking process available for public scrutiny.
17. Those councils who have not undertaken an unmet demand survey for some time and now decide to do so, might find it helpful to consult neighbouring, local councils who have recent experience of such surveys.
18. We would ask you to make your conclusions public by 31st March 2005 and would appreciate a copy of them no later than 30th April 2005.
19. It seems to us that the outcome of your review will be either (i) to deregulate and thereby grant a taxi licence to anyone meeting the application criteria, or (ii) to continue restricting the number of taxi licences issued. In that instance, three scenarios would appear to be possible outcomes:
• maintaining the current limit of taxi licences;
• granting a number of new licences to meet the unmet demand that you have identified by means of a new survey.
• granting a specific number of new taxi licences each year. Future requirements
20. The justification by 31st March 2005 is a one-off requirement for local councils. The Action Plan sets out the following on-going arrangements for councils continuing to restrict taxi licences:
• a three yearly review, with published conclusions
• justification of the local policy for quantity restrictions in the 5 yearly Local Transport Plan process.
21. The Action Plan commits the Government to review the situation regarding quantity controls in three years' time, with a view to further action if necessary.
22. We look forward to hearing from you.
Yours faithfully,
R F Cope
ANNEX C
Useful questions when assessing quantity controls of taxi licences
• Have you taken into account the Government's view that quantity controls should be removed unless a specific case that such controls benefit the consumer can be made?
Questions relating to the policy of controlling numbers
• Have you recently reviewed the need for your policy of quantity controls?
• What form did the review of your policy of quantity controls take?
• Who was involved in the review?
• What decision was reached about retaining or removing quantity controls?
• Are you satisfied that your policy justifies restricting entry to the trade?
• Are you satisfied that quantity controls do not:
- reduce the availability of taxis;
- increase waiting times for consumers;
- reduce choice and safety for consumers?
• What special circumstances justify retention of quantity controls?
• How does your policy benefit consumers, particularly in remote rural areas?
• How does your policy benefit the trade?
• If you have a local accessibility policy, how does this fit with restricting taxi licences?
Questions relating to setting the number of taxi licences
• When last did you assess unmet demand?
• How is your taxi limit assessed?
• Have you taken into account latent demand, ie potential consumers who would use taxis if more were available, but currently do not?
• Are you satisfied that your limit is set at the correct level?
• How does the need for adequate taxi ranks affect your policy of quantity controls?
Questions relating to consultation and other public transport service provision
• When consulting, have you included etc
- all those working in the market;
- consumer and passenger (including disabled) groups;
- groups which represent those passengers with special needs;
- local interest groups, eg hospitals or visitor attractions;
- the police;
- a wide range of transport stakeholders eg rail/bus/coach providers
and traffic managers?
• Do you receive representations about taxi availability?
• What is the level of service currently available to consumers (including other public transport modes)?
JD
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FAQ
well I do, but I wouldnt say so. 
