TfL proposes major changes to private hire licence fees

Transport for London opened a consultation on proposals to change the fees private hire operators are charged for the costs of licensing, compliance and enforcement activity on Thursday.

The local government body said the proposed changes would ensure that operators pay a fee according to the resources required to regulate their operations.

It said the proposals would see an end to the current system where so-called “small” operators, with no more than two vehicles, pay £1,488 for a five-year licence, and “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 continued to grow “dramatically” in recent years, TfL claimed, from 65,000 licensed drivers in 2013/14 to more than 117,000 today.

It said the number of vehicles increased from 50,000 to 87,000 over the same period.

With that growth, there was also a “substantial” increase in the cost of ensuring private hire operators fulfilled their licensing obligations and in tackling illegal activity to keep passengers safe, it added.

It estimated that over the next five years enforcement costs alone would reach £30m 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,” Transport for London said in its announcement.

“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 had 10 vehicles or fewer, it said, with just 5% of companies in charge of fleets of over 100 vehicles.

TfL said it was 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 would be used to contribute to funding the extra 250 compliance officers who were currently being recruited, with a number of them now in post and the remainder being recruited by the summer.

TfL said the team played a “pivotal role” in keeping Londoners safe, and also also provided reassurance to those travelling at night through a highly visible, uniformed presence in the West End, City and other areas across London.

“The operator fees system is no longer fit for purpose,” said TfL’s general manager of taxi and private hire Helen Chapman.

“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 would close on on 16 June.