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TfLTPH Notice 07/14: Taxi and Private Hire smartphone apps in London Letter to all drivers and private hire operators

21/07/2014

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This notice provides an update to all taxi and private hire drivers and private hire
operators regarding the use of smartphone apps in London. The content of this notice
has also been sent directly to all licensed drivers and operators.
The taxi and private hire trades play a vital role in London’s transport system, carrying
over half a million passengers around the Capital every day.
I am conscious that the growth in the use of smart phones is changing the way many
of us organise our lives, with passengers and drivers increasingly using apps that
serve London’s taxi and private hire market. While apps offer tremendous potential
benefits, TfL as the regulator has a duty to ensure that the way in which they operate
complies with the licensing and regulatory framework in London. Over the last few
months you will have seen a lot in the media about this, in particular about the Uber
app, and I this note explains our current position on the use of smart phone
technology.

Taximeters
As you will know, private hire vehicles in London are prohibited from being equipped
with taximeters. However, it is not unlawful for a private hire operator to charge its
customers on the basis of time taken and distance travelled in respect of journeys.
TfL’s view is that smartphones that transmit location information (based on GPS data)
between vehicles and operators, have no operational connection with the vehicles,
and receive information about fares which are calculated remotely from the vehicle,
are not taximeters within the meaning of the legislation (section 11 of the Private Hire
Vehicles (London) Act 1998).
The main taxi and private hire trade organisations fundamentally disagree with how
the law should be applied to the use of smart phones in this way. TfL has no specific
vested interest in which interpretation is correct, other than that we would like clarity
so we can regulate the industry and enforce effectively where necessary and
appropriate.
In order for us to resolve this issue as quickly and fairly as possible, allowing all
interested parties to make representations, we consider the most appropriate way
forward is to invite the High Court to issue a declaration as to how the law should be
applied in this area.
However, we are now aware that the Licensed Taxi Drivers Association (LTDA) has
commenced private prosecutions in the Magistrates’ Court against a number of
individual drivers who use the Uber app. These cases will delay the resolution of this
issue as the High Court cannot be invited to issue a declaration while there are
ongoing criminal proceedings. Nor will the private prosecutions provide a definitive
legal position on this issue, as the decisions of one Magistrates’ Court are not binding
on another.

Rather than resolving this issue quickly and fairly, we believe that the LTDA actions
are prolonging the inherent uncertainty on this issue and are unfairly pursuing a small
number of licensed private hire drivers which we are of the view is not in the public
interest. It would be preferable for the LTDA to withdraw their private prosecutions and
work with us to get the issues before the High Court as soon as possible in order to
get a definitive resolution.

Record keeping and recording of destination
The Licensed Private Hire Car Association (LPHCA) assert that the regulations
relating to record keeping for private hire operators require a destination to be
recorded before the commencement of a journey on all occasions.
TfL is of the view that the law as it currently stands only requires operators to record a
destination if a passenger specifies one at the time of booking and not otherwise. We
do however agree that these regulations are unclear on this point. The power to make
the regulations is now vested in TfL. We therefore intend to consult on potential
revisions to the regulations to provide clarity and help ensure the highest standards of
public safety and customer service are maintained. More details of this consultation
will be publicised later this year.

Uber’s operating model
Concerns have been raised regarding the nature of Uber’s business operating model
in London. While it is right that TfL takes into account the reasoned views of others as
to how the law should be applied, our role as regulator is to reach an independent
view of the law, without improper influence, taking into account all relevant
considerations. In April we carried out TfL’s largest ever compliance inspection and at
the time of that inspection Uber met all requirements for a private hire operation in
relation to record keeping. We have also been in extensive correspondence with Uber
to understand precisely how their business model operates in London.
Following this review, we have reached the conclusion that the way Uber operates in
London is in accordance with the law as it applies to private hire operators and
specifically in the way bookings are accepted and invited. However, TfL is aware of
one incidence where it appears that a driver may have carried out private hire
bookings for Uber using a vehicle without insurance and that matter is being dealt with
appropriately.
Technology continues to advance quickly and we will continue to monitor
developments in way that the market develops in London to ensure that operators and
drivers remain compliant.
I would like to emphasise that TfL continues to recognise, and defend, the important
distinction between the services provided by taxis and private hire vehicles. TfL is
therefore continuing to defend the right of taxis to utilise bus lanes in the ongoing
litigation including at the European Court of Justice.

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Leon Daniels
Managing Director – Surface Transport
Transport for London
17 July 2014

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