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IoD urges TfL to choose competition and ignore “luddite tendency” over taxi controls

07 Mar 2016

The Institute of Directors, the UK's leading organisation for business leaders, will today [Monday] call on Transport for London to drop its proposed regulations for private hire vehicles, which the IoD described as “unfriendly to entrepreneurialism, innovation and fair competition”. 

Responding to a consultation conducted by TfL, the IoD heavily criticised proposals including: 

  • Making passengers wait for five minutes to get into their vehicle, which the IoD dismissed as “absolute nonsense”. TfL claims the measure is designed to stop people getting in the wrong taxi, but the IoD said they had not proved this was a frequent occurrence.
  • Forcing all taxi operators to offer booking up to seven days in advance. This may be useful for certain passengers, the IoD agreed, but added that making all firms provide this service could damage competition. 
  • Banning companies from showing nearby vehicles on an app, which was described by the IoD as attempt to “restrain the application of new technology”. Competition works best when consumers have as much information as possible, the IoD insisted, and this proposal would only “restrict that flow of information”.   
  • Obliging firms to set the fare in advance. The IoD argued that this would be likely to increase cost for consumers, as taxi firms would have to price in potential delays, rather than just charging for the actual journey distance and time. 
  • Only allowing drivers to work for one operator at a time; a “backward step” which would reduce flexibility for drivers, the IoD said.

Not all of the proposals met with the IoD’s disapproval. Licenses and insurance of all drivers should be checked regularly to make sure they are up-to-date, and the IoD argued it should be made easier for black cab drivers to compete by setting their own fares.

Andy Silvester, Head of Campaigns at the IoD said that this was a test of how the authorities reacted to technological innovation which was being enthusiastically adopted by consumers:

“Throughout its history, London has been at its most successful when it is open to innovation and to enterprise. How the capital responds to the application of new technology is not just a litmus test of how forward-thinking its politicians are but will set the precedent for other cities and other innovations, and the Luddite tendency evident in the proposals as they stand is deeply concerning. 

"TfL and the Mayor must appreciate the gravity of the situation, and choose competition over protectionism. This is also an opportunity for the candidates in next year’s mayoral contest to show that they stand on the side of consumers against the powerful lobbies of entrenched industries.”

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