Hail traditional benefits of licensed taxi services

Tony Kenmuir, CILT Scotland - Scottish Committee Member

A public hire taxi operates under license conditions that exist primarily to protect public safety. The driver and vehicle are tested for their knowledge and reliability respectively, and there are special insurance and other conditions in place to regulate their numbers and make sure they’re accessible to those with special or particular needs. People can link up or complete any journey on public transport, whether it’s bus, train, tram or aeroplane by filling in the gaps with an on-demand taxi.

Most big taxi firms now have an app, take contactless or mobile payments and have all the benefits of training, knowledge, insurance and regulation to protect safety. There could be advantages to apps that will find taxis in any city anywhere in the world, but beyond linking taxi services globally, do ride sharing apps have any other advantages?

Uber cars can undercut taxis by exploiting gaps in current UK legislation. Taxi meters are heavily regulated for the benefit of the travelling public but Uber cars don’t have them. People who want a ride at a quiet time when there are willing drivers in abundance may find the fare a percentage lower than a metered taxi fare.

However, at busy times, when demand increases, taxi fares don’t go up – but Uber fares do. It’s called “surge charging” and is a cause of controversy in many cities. Uber drivers tend to be part-time workers who focus on working at peak times of demand. Prices reflect the commercial realities of supply and demand but if all taxis operated like this, vulnerable people might pay over the odds for getting home from hospital and nobody wants that. That’s why the 24/7/365 operation of the traditional taxi trade could even become unsustainable if the peaks get higher and the troughs get lower. Taxi regulation helps to smooth out the peaks. People would not contemplate only allowing buses and trains to operate when it is most profitable. Taxis, buses and trains all need to provide a consistent service for all who need them at all times.

Uber and other similar apps are surviving on huge speculative investments that allow them to buy market share by subsidising the drivers and passengers in the short term. They’re losing billions in the process, possibly faster than any company has lost money in history, but they have billions (of other people’s money) to lose. These companies are prepared to lose money in the short term as they seek to gain market dominance. If the only way to book a taxi anywhere in the world is through Uber, would safety, service and prices really improve in the long term? What of the employment of drivers and their income? Uber is steadily increasing the percentage of fares that it retains, up to 25 per cent now in some cities. This has caused global protests from their drivers and litigation over employment status. CILT has highlighted the need for government to review its regulation of these companies, and has welcomed the UK Government’s new commission on modern employment, but this is only one small step in the right direction.

Traditional taxi operators convey passengers from one place to another safely, efficiently, at a regulated price and offering accessible public transport for everyone. The taxi trade is modernising its thinking, but given the global hype there’s a surprising lack of understanding from the travelling public about the new apps and their implications for the sector. Operating at peak times only and unregulated pricing could be the brave new world to which this “innovation” in public transport is leading – but with questionable benefits.

Tony Kenmuir, CILT Scotland – Scottish Committee Member