(Original edit of article written for Taxi magazine).
With all the fuss over Uber, few commentators have stopped to ask how private hire started in the first place.
On the surface of it, all a taxi driver does is drive a customer from point A to point B for money. A deceptively simple business plan, and one that has been exploited for many years by those unwilling to go through the effort of gaining a proper licence.
From the very beginning, London has led the way in safety, and has stipulated strict licensing rules. As a result, your London cab driver will have had strict background checks, years of testing on his topographical knowledge, and will have passed an enhanced driving test. The cabs are all 100% accessible and are built like tanks. Fares are calculated by a meter that cannot be tampered with. Taxi and private hire laws were developed over time in to keep the public safe. They were generally adequate until the American invasion of Uber.
It’s the way of the world that where exists a successful service; someone will come along and undercut you. Our trade was challenged in 1961 when Welbeck Motors emerged to muscle in on taxi work. Welbeck flooded the streets with a fleet of red Renault Dauphines, and exploited technology by using two-way radios. The company secured financial backing, and lobbied for the support of Members of Parliament to run a “mini-taxi” service. They didn’t receive explicit approval, but they had sections of the press on their side.
There are clearly parallels with modern day Uber, where lower overheads and lax restrictions allowed mini-cab operators to undercut taxis and work to lower standards of safety and driver training. Welbeck Motors and Uber both had money behind them which they used to influence politicians and the media. I’d imagine that Welbeck were seen as trendy and as progressive as Uber when they arrived on our shores.
Although Welbeck Motors went into liquidation in 1965, other interested parties were waiting in the wings to exploit loopholes in stringent Hackney Carriage Laws and create a second tier cab service using two-way radio.
Drivers were recruited to mini-cab firms, typically operating out of doorways. They weren’t officially licensed, but so long as they were pre-booked and their journeys were logged they could operate legally.
Mini-cab drivers and vehicles were eventually licensed by the Public Carriage Office in 2000. Some firms got their acts together and ran their businesses professionally, while other ones folded.
In London, there have been no restrictions on the number of private hire licenses issued. In the case of taxis, numbers have risen very slowly over the years, kept down naturally by the Knowledge process. Suburban taxi licences were suspended for a while due to over-supply, but private hire licences have continued to be issued in huge numbers – despite over-supply! In order to service the Uber organisation, by 2016, several hundred licences a week were being issued (licensing has slowed in 2017).
If hundreds of taxi licences were being issued each week, there would be angry talk about congestion and pollution. Many thousands of extra taxis on the streets would be noticed. You barely notice mini-cabs. London mini-cabs don’t have plates and roof signs as in the rest of the country. Signage is pretty low key if it exists at all, and the private hire licence sticker on the back window is virtually unreadable. It’s often disguised further by the tinted glass that TfL allow private hire vehicles to have, but not taxis.
The private hire industry can always undercut taxis on price because of lower running costs. London taxis have had to be purpose-built in order to conform to stringent safety standards – and the famous twenty-five foot turning circle (I’m unsure if this applied in the days of horse-drawn cabs). Crucially, private hire drivers enjoy a free reign in their choice of vehicle – and they don’t need to spend £55,600 on a new vehicle.
Uber showed that through over-supply they could promise a car within a few minutes of booking. Until Uber’s business model was discussed in the wake of TfL re-licensing refusal, the general public didn’t know how it was done. People now know how badly their drivers are treated. They’ve heard about the dubious criminal records checks, and the covering-up of alleged sexual attacks. People know that foreign operators can choose where to pay their tax, and this is not going to be in the UK.
Uber’s drivers don’t have to reach the earning targets that lured them in as they can claim benefits to top-up their income. The drivers are also now aware of the con. They are dependent on the provision of work, but they have been classed as self-employed. If Uber lose their appeal against the ruling that their drivers are actually employees it could cost the operator tens of thousands of pounds just to pay National Insurance for 50,000 of its British drivers. This is just one of Uber’s current problems.
Traditional private hire companies tick over, but Uber over-reached themselves. Like Welbeck at the start of the 1960s, Uber are finding out that short cuts don’t work. They have failed to retain the goodwill of their drivers, or the confidence of the public. It’s only a matter of time before its investors wash the toxins off their hands and move on to the Next Big Thing.