Friday, 22 September 2017

"Uber London loses licence to operate"

Same old, same old, one bunch of monopolists fighting another.

I use public transport in London (which is excellent and far faster than cabs), so I'm not too bothered, but on behalf of all the people who like using Uber (and all the drivers who have registered with them) I hope that Uber can bounce back from this - like they always seem to do.

The interesting bit in the original version of the article (since removed) was a reference to TfL's recent changes to licensing fees.

TfL explain here:

The Capital's private hire industry has grown dramatically, from 65,000 licensed drivers in 2013/14, to more than 116,000 today. The number of vehicles has increased from 50,000 to 88,000 over the same period. With this growth, there has been a substantial increase in the cost of ensuring private hire operators fulfil their licensing obligations and in tackling illegal activity to keep passengers safe...

The total projected cost for licensing, enforcement and compliance for the taxi and private hire trades over the next five years is £209m. The law allows the recovery of costs incurred for licensing, regulatory and enforcement activity through the licence fee process. All money generated through the process has to be spent on such activity...

Previously a 'small' operator, with no more than two vehicles, would pay £1,488 and a 'standard' operator - those with more than two vehicles, regardless of the size of its fleet - would pay £2,826 for a licence lasting five years.

The new fee structure, approved by the TfL Finance Committee, will replace the existing two 'tiers' with eight; with charges ranging from around £2,000 for a five year licence for those with 10 vehicles or fewer, to £464,000 per year for the largest operator. This would ensure the licence fee structure for private hire operators reflects the costs of compliance activity according to the scale of each operator.

Point 1. How inefficient is TfL? They've got to do about 204,000 checks a year (total drivers plus cars). £209 million ÷ by 5 years ÷ 204,000 checks = £200 per check. How long can it take to check that a car has MOT, is taxed and insured? How long can it take to do check that a driver doesn't have a criminal conviction for a violent offence (about the only thing that can possibly be relevant)? How does that cost £200 a pop?

Point 2. What sort of maniac designed the charges to be a barrier to entry like that? A small operator pays a considerably higher fee per driver/per car than a large one. It's not quite as extreme under the new system as the old system, but what's wrong with a flat charge per car or per driver?

Point 3. If TfL wants money from taxi drivers, how about imposing a charge to reflect all the privileges they get, like parking in front of stations and being able to use bus lanes?

Final point, and I've no hard evidence for this, but I've noticed that if you see a London taxi going at full tilt, it is usually empty; if you see one dawdling along, it is usually carrying passengers. Could this be because they can charge for time spent (in addition to charging for distance)? They've every incentive to behave like this i.e. provide a poorer service.


Bayard said...

When I heard this bit of news, I thought "that will sort out all those Uber drivers who were claiming that they were employees and should be getting minimum wage and holiday pay: they can now go and work for a company that will give them what they want. Right.

"What sort of maniac designed the charges to be a barrier to entry like that?"

Someone who wants to protect the big boys from small competition muscling in?

Mark Wadsworth said...

B, first comment, cynical but spot on.

Second comment, as the Uber story shows, it's about protecting the middle tier against (taxi drivers and owners of mini cab businesses) against the little guys (mini cab drivers) and the big guy (Uber).