Taxi and Private Hire Vehicle Licensing: Best Practice Guidance

October 2006


1. This Guidance is issued with the aim of assisting those local authorities in England and Wales that have responsibility for the regulation of the taxi and private hire vehicle (PHV) trades.

2. The Guidance follows the publication in November 2003 by the Office of Fair Trading of a market study of the regulation of taxis and PHVs in the UK. One of the recommendations of that study was that the Department for Transport (DfT) should produce guidance on best practice for the local licensing authorities concerned. The Guidance is issued in fulfilment of that recommendation.

3. However, it will be appreciated that it is for individual licensing authorities to reach their own decisions both on overall policies and on individual licensing matters, in the light of their own views of the relevant considerations.

4. The Department consulted on a draft version of the guidance in the autumn of 2005. We are grateful for all the views expressed on that draft. A summary of the consultation responses and our reaction to them is available on the DfT web-site. Some respondents to the consultation draft felt that the document should be made more prescriptive whilst others felt that the draft struck the right balance in this respect. Taxi and private hire vehicle legislation makes it clear that it is primarily for local licensing authorities to make decisions on the matters covered in this guidance. Furthermore, it is right that local circumstances and requirements are taken into account in making these decisions in each licensing area. So we have in general resisted the calls for the guidance to be more prescriptive. The key purpose of the guidance remains, as proposed in the draft version, to assist local decision-making by setting out the main considerations authorities might wish to take into account in reaching the right balance between costs and benefits in determining the licensing policies for their area.

The Role of Taxis and PHVs

5. Taxis (more formally known as hackney carriages) and PHVs (or minicabs as some of them are known) play an important part in local transport. In 2003 some 650 million journeys were made by taxi and PHV in Great Britain, and households spent around £3 billion on taxi and PHV journeys; spending by businesses and foreign visitors was a substantial extra figure. Taxis and PHVs are used by all social groups; low-income young women (amongst whom car ownership is low) are one of the largest groups of users.

6. Taxis and PHVs are also increasingly used in innovative ways - for example as taxi-buses - to provide innovative local transport services (see paras 63-66).

The Role of Licensing: Policy Justification

7. The aim of local authority licensing of the taxi and PHV trades is to protect the public. Local licensing authorities will also be aware that the public should have reasonable access to taxi and PHV services, because of the part they play in local transport provision. Licensing requirements which are unduly stringent will tend unreasonably to restrict the supply of taxi and PHV services, by putting up the cost of operation or otherwise restricting entry to the trade. Local licensing authorities should recognise that too restrictive an approach can work against the public interest - and can, indeed, have safety implications.

8. For example, it is clearly important that somebody using a taxi or PHV to go home alone late at night should be confident that the driver does not have a criminal record for assault and that the vehicle is safe. But on the other hand, if the supply of taxis or PHVs has been unduly constrained by onerous licensing conditions, then that person's safety might be put at risk by having to wait on late-night streets for a taxi or PHV to arrive; he or she might even be tempted to enter an unlicensed vehicle with an unlicensed driver illegally plying for hire.

9. Local licensing authorities will, therefore, want to be sure that each of their various licensing requirements is in proportion to the risk it aims to address; or, to put it another way, whether the cost of a requirement in terms of its effect on the availability of transport to the public is at least matched by the benefit to the public, for example through increased safety. This is not to propose that a detailed, quantitative, cost-benefit assessment should be made in each case; but it is to urge local licensing authorities to look carefully at the costs - financial or otherwise - imposed by each of their licensing policies. It is suggested they should ask themselves whether those costs are really commensurate with the benefits a policy is meant to achieve.

For related documents, pages and internet links, see the column on the right.

Back to contents

Back to top