TFL bully

TfL must end driver subsidy of operator licensing fees

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Last year we exposed the sweetheart deals TfL has with licensed operators which sees Uber and Addison Lee paying just £500 per annum to TfL while sub-minimum wage private hire drivers contribute 68% of combined taxi and private hire driver revenue budget while operators currently only pay in 8%.

While we're glad TfL has gone some way towards evening up the score with its current operator license fees proposals, the plans are still shockingly inequitable. Before, we might have excused the fee structure as a legacy problem but, if the current proposals go ahead, we can say TfL discriminates by design. Private hire drivers will still be paying in far more than their fair share and remain excluded from the TfL TPH stakeholder process.

TfL says an annual audit of Uber's license costs it £500,000 per annum but its current proposal is to collect only £440,000 from Uber and that is before TfL's overhead costs, let alone supporting the cost of compliance for Uber's 30,000 drivers and vehicles. The situation is no better at Addison Lee.

Uber extracts around 50% of driver net operating profits but while TfL has Uber paying just £14.71 per car and driver in license fees (up from just £0.02 before) its drivers will continue to pay TfL £183.40 per annum.

Overall,  if TfL plans are implemented, PH drivers will be paying in twice as much as licensed operators while getting just half of the operating profits from operators.

We are proposing a much simpler and fairer license fee structure for private hire drivers and operators including a 35% reduction in PH driver licensing fees to even the balance.

Read our full submission to TfL here:

TFL operator license fee consultation

And our press release distributed by the IWGB press office:


IWGB recommends fairer private hire licensing rules in TfL consultation

  • Burden of financing TfL's regulatory budget should be shared more evenly between private hire operators and drivers. Drivers, many of whom earn below the minimum wage, cover 68% of the current budget through their licence payments.
  • TfL should recognise private hire drivers as stakeholders for its consultation processes, as it currently does with taxi drivers and private hire operators.
  • TfL must adopt the recommendation made by Frank Field MP, then chair of Work and Pensions Select Committee, that worker rights be made a condition of operator licensing.

19 June: The Independent Workers' Union of Great Britain's (IWGB) United Private Hire Drivers (UPHD) branch has recommended shifting some of the cost of taxi and private hire regulation from private hire drivers to operators, in its submission to Transport for London's (TfL)consultation on private hire fees.

Private hire drivers covered around 68% of the current taxi, private hire operator and private hire driver regulatory estimated budget of £136m through their licence payments.Drivers will still pay around twice as much as operators if TfL implements the changes it is currently proposing.

''These proposals from TfL represent a continuation of the status quo with below minimum wage drivers effectively subsidising the licensing and compliance costs of the same multinational operators who deny them basic worker rights such as the minimum wage and holiday pay,” said UPHD branch chair James Farrar.

We propose a reduction of private hire driver licensing costs from the current £250 per 3 year term to £162.

Operator licence fees should also change to:

  • Small operators of 20 cars or less pay £700 per car for a five year licence
  • Larger operators of 21 cars or more pay £ 900 per car for a five year licence

We have also suggested that TfL adopt the recommendation made by Frank Field MP, then-chair of the Work and Pensions Select Committee, in his report ‘Sweated labour: Uber and the gig economy’ that worker rights be made a condition of operator licensing.

Currently a large proportion of private hire drivers are having their worker rights denied, as operators refuse them holiday pay and a guaranteed minimum wage. A survey conducted by UPHD concluded that 70% of Uber drivers earned below the minimum wage, as do 75% of all private hire drivers

Our submission also asked that private hire drivers be given representation within TfL. Despite the contribution made by London's roughly 117,000 private hire drivers to TfL's budget, the regulator doesn't recognise any body that exclusively represents private hire drivers. Meanwhile, it recognises 5 separate organisations that represent some of the 25,000 taxi drivers based in the capital and multiple bodies for private hire operators.

Other recommendations include:

  • Shifting TfL's enforcement burden from drivers to operators, as increasingly drivers are placed in legal jeopardy of plying for hire offences by operators who assign them the work outside of the licensed area which drivers are contractually bound to accept.
  • Put greater emphasis on compliance, communication, education and training of private hire drivers rather than enforcement alone.
  • TfL should bring taxi booking operators such as MyTaxi and Gett under regulatory control and require that they be licensed.
  • TfL should move to a more transparent funding model that replaces the current licensing system with one that extracts a percentage of the value of each ride payable at point of sale.
  • TfL should invest some of the additional revenue in essential operating infrastructure for private hire drivers such as centrally located rest and waiting areas. This in turn will improve compliance, safety and reduce congestion.

TfL has said that following the consultation changes will be introduced this summer.

For more information:

James Farrar, UPHD branch chair

07530 319 206