Put the UK’s Taxi Laws in for an MOT and the Consumer Back in the Driving Seat

Abolish the Knowledge, support Paratransit Light Vehicles and remove barriers for market entrants to get the UK moving, says think tank

• The UK’s licensure regime is inherently exclusionary due to its expensive and overly complicated nature.

• Current TFL guidance for the licensure of taxis is 105 pages long, whilst James Button’s encyclopaedia of the UK’s current taxi regulations comes to almost 3000 pages. 

• The cost of a taxi licence in London can exceed £10,000 after the ‘Knowledge’ test is taken into account.

• Data from End Violence Against Women shows that 1 in 2 women feel unsafe walking near their home at night, and 1 in 2 women feel unsafe walking in a public area at night. Improving access to cheap and safe late-night transport would help to address these concerns. 

A new report, A Fare Shake: Reforming Taxis for the 21st Century, from the Adam Smith Institute (ASI) argues that the Government should move to overhaul current taxi cab legislation, creating a more dynamic and equitable sector to better serve the needs of Britons as they get moving after Covid. Drivers and operators should have a clearer, more liberal licensing system, giving users unprecedented choice at lower costs, better safety, and higher quality. 

Report author, Maxwell Marlow, makes the economic case for streamlining licensure rules. Taxis, PHVs (Private Hire Vehicles) and ride-source suppliers are critical to rebuilding the economy after the pandemic. Personnel Today has found that 40% of people want to use PHVs for their work commute, whilst the hospitality and night-time sectors will benefit from greater consumption of goods and services consumed either side of the rides. Moreover, in London, only 46% of households own a car meaning that, especially for lower income groups who are less likely to own one, travel is increasingly reliant on third-parties. Freedom of travel should be protected for lower-income households, who are at the mercy of restrictive transport regulation and declining TfL services. 

The paper also highlights the need to end the preferential treatment of taxis, which is currently taking place at the expense of PHVs and ride-source providers. PHVs provide a great deal of societal inclusivity for disabled people, who are often excluded from public transport and conventional vehicles, whilst ride-sourcing platforms are the most popular mode of hired transport services, offering rapid and reliable transport across urban areas. 

The report recommends the following policies:

1. Eliminate wasteful duplication and regressive licensing by creating a single, standard licensing regime, enforced by a national licencing authority. 

2. Abolish the ‘Knowledge’ advanced topographical tests, which have become unnecessary due to the advent of reliable GPS and digital maps. 

3. Permit PHVs to be hailed from the pavement and allow all licenced point-to-point operators to use bus lanes in order to make transport fairer. 

4. Support more Paratransit Light Vehicles. These are higher capacity vehicles which run regular services along high-demand routes and which can be summoned by a customer. 

5. Allow drivers nationwide to claim the cost of passenger-facing CCTV back against tax and encourage the use of online safety kits to improve standards of safety.

6. Offer incentives for taxi and PHV drivers to switch to green vehicles through offering discounts on green vehicles, and raising capital through a Green Taxis and PHVs Fund to subsidise faster transition away from combustion engines. 

Maxwell Marlow, report author and Development and Research Officer at the Adam Smith Institute said: 

“Britain operates critical services on last millennium’s laws. It’s time to put the brakes on special interests, who inflate costs and gate-keep with the antiquated and defunct ‘Knowledge’, and give consumers more choice. We need to simplify our licensing system, making it more fair and transparent, whilst ensuring that our fleets are greener, safer, and more efficient than before. The report contains a myriad of policies to give Britons the freedom to travel that they deserve, turbocharge the economy and relieve the cost-of-living crisis for many along the way.”

Greg Smith, Member of Parliament for Buckingham and Transport Select Committee Member, said:

“Reform of the taxi and PHV market is long overdue.  The revolution in consumer choice that services like Uber brought needs to be matched with the way the State sees taxi services, and I welcome the ASI’s recommendations in this regard.  We need to embrace deregulation for better and cheaper choices for all.”

-ENDS- 

Notes to editors:  

For further comments or to arrange an interview, contact Emily Fielder, emily@adamsmith.org | 0758 477 8207.

Maxwell Marlow is a Development and Research Officer at the Adam Smith Institute, an MA candidate at the LSE, and a Don Lavoie Fellow at the Mercatus Center, George Mason University. 

The report is now live on the Adam Smith Institute website here.