Proposed changes to private hire operator licence fees

• Increased operator licence fees would contribute to funding the 250 additional Compliance Officers, many of whom are now in post with the remainder in place by summer this year

Transport for London (TfL) has today opened a consultation on proposals to change the fees private hire operators are charged for the costs of licensing, compliance and enforcement activity. This would ensure that operators pay a fee according to the resources required to regulate their operations.

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.

Close to half of all operators have 10 vehicles or fewer, with just five per cent of companies in charge of fleets of over 100 vehicles. TfL is also asking for views on whether there should be an option for operators in the top three tiers to pay their fees in annual instalments.

As set out in the Mayor's Taxi and Private Hire Action Plan, income from operator licensing fees will be used to contribute to funding the extra 250 Compliance Officers who are currently being recruited with a number of them now in post and the remainder being recruited by the summer. The team plays a pivotal role in keeping Londoners safe. They also provide reassurance to those travelling at night through a highly visible, uniformed presence in the West End, City and other areas across London.

Helen Chapman, General Manager of Taxi & Private Hire, said:

'The operator fees system is no longer fit for purpose. It is only fair that licence fees for private hire operators accurately reflect the costs of enforcement and regulating the trade. The changes to fees would also enable us to fund additional compliance officers to help crackdown on illegal and dangerous activity.'

The consultation closes on 16 June 2017. Customers and stakeholders can respond by visiting: consultations.tfl.gov.uk/tph/private-hire-proposals/

Notes to Editors:

• The current fee for a small operator (up to 2 vehicles) is £1,488 for five years. The current fee for a large operator (3 or more vehicles) is £2,826 for five years
• The Mayor outlined in the Taxi and Private Hire Action Plan that he would review operator compliance costs to ensure the licence fee structure for private hire operators reflects the costs of compliance activity: taxi-and-private-hire-action-plan-2016.pdf
• The proposed fees will be broken down as follows: