Transport for London (TfL) has opened a consultation on proposals to change the fees private hire operators are charged for the costs of licensing, compliance and enforcement activity.
The proposals would see an end to the current system where ‘small’ operators, with no more than two vehicles, pay £1,488 for a five-year licence. ‘Standard’ operators, which have more than two vehicles, regardless of the size of their fleet, currently pay £2,826.
The Capital’s private hire industry has grown dramatically, from 65,000 licensed drivers in 2013/14, to more than 117,000 today. The number of vehicles has increased from 50,000 to 87,000 over the same period. With this growth, there has been a substantial increase in the cost of ensuring private hire operators fulfil their licensing obligations and in tackling illegal activity to keep passengers safe. It is estimated that over the next five years enforcement costs alone will reach £30 million from a previous estimate of £4m.
The total projected cost for licensing, enforcement and compliance for the taxi and private hire trades over the next five years is £209m.
The proposed new fee structure will replace the existing two ‘tiers’ with five; with charges ranging from around £2,000 for a five year licence for those with 10 vehicles or fewer, to £167,000 plus £68 per car for large operators with more than 1,000 vehicles. This would ensure the licence fee structure for private hire operators reflects the costs of compliance activity according to the scale of each operator.