In April of this year London’s taxi and private hire operators learnt of TfL’s intention to dramatically overhaul and increase their licensing fees. Many operators fear that if the new costs are successfully imposed a large number of private hire firms will be unable to continue trading.

For that reason the Licensed Private Hire Car Association (LPHCA) a trade body that represents the interests of private hire vehicle operators, has launched a legal challenge to the measures. The LPHCA’s chairman Steve Wright has described the proposals as being “beyond recognition and rationality” and highlights a “dubious” consultation process.

He believes the consequences of the proposals could be the decimation of the London private hire market. For that reason he describes the judicial review as being “the single biggest thing” that the association ever does. And he is calling on the support of the industry to help fund the cash strapped association’s  legal challenge, which if it fails could run to 200k. That sounds like an awful lot of money but on the flip side, if the proposals go through operators will collectively pay £40 million to their regulator over the next 5 years.

The LPHCA’s stated concern is that their operator fees will be used to fund the salaries of the 250 recently recruited compliance officers. This increase of on-street enforcement from 80 officers was commissioned by Mayor Khan shortly after his election. The association maintains that private hire operators are very compliant and their licence fees should not be used to subsidise the policing of illegal behaviour. Therefore the LPHCA will argue in court that. the fees being proposed do not represent the true cost of operator compliance and licensing.

At Plan we are of the opinion that the main company that stands to benefit from the new fees is Uber (providing their licence application is successful), as a large number of their rivals will be unable to be forced out of business. We agree with the LPHCA that the changes represent a significant threat to the future of the private hire industry in London. For that reason Plan Insurance Brokers made a £5,000 contribution towards the LPHCA’s fighting fund and supports the high court challenge to the legality of the proposed fees.

As outlined in our blog “What’s All Tfl’s Money Going On?”, if the reason that the increased fees are needed, is to fund the additional compliance officers, we believe TfL can operate far more efficiently by utilising modern technology. Additionally, there are numerous flaws in the workings of the new proposals but perhaps the most glaring anomaly is the jump in costs of £120,00 if an operator goes from running 100 vehicles to 101.

Visit the LPHCA website to keep up to date with the LPHCA fighting fund. You can also read more in the Winter issue of Private Hire News.