The Competition and Markets Authority (CMA) is against a proposal to limit the number of minicabs operating in the capital saying it will cause fare hikes for Londoners.
London Mayor Sadiq Khan had last month called for reviews on the current taxi and PHV licensing legislation that doesn’t limit the number of cabs operating in the capital and allows for cross-border hiring. Cross-border hiring allows drivers to obtain licenses from one area and trade it in another area, where regulations may not be as strict.
The Mayor is seeking for the introduction of a controversial cap on the number of PHVs in the capital.
The CMA's head of enforcement Michael Grenfell said: “I am concerned that a numerical cap on the number of providers of taxi/PHV services risks having the effect of artificially and unnecessarily constraining competition, to the detriment of passengers – depriving them of the best prospect of high service standards, value for money and innovation in service provision.”
“Even if there were to be such a cap, the factors taken into account in a public interest test should at least include the effects on competition, including on service standards and affordability of fares, bearing in mind that the absence of affordable fares can induce people to travel by less safe modes of transport.” City A.M reported.
Deputy mayor for transport Heidi Alexander, who supports the introduction of the cap said, “I’m delighted that a group of experts made up of trade union representatives, regulators, politicians and safety campaigners are recommending we get the powers to go further – including putting an end to cross-border hiring, recognising injustices around low pay and exploitation, and giving us the power to cap the number of private hire vehicles.
“The government needs to set out urgently how they are going to respond to these proposals as they could make a real difference - improving safety for passengers, pushing up standards, and making our city a better place for everyone.”
Steve Wright, chairman of the Licensed Private Hire Car Association said, “This proposal, if adopted, could bring about shortage of supply and make it very difficult for hire and replacement vehicle companies to operate. This in turn could leave consumers at risk of being stranded because of volatile and unpredictable demand factors, such as the weather and seasonal demands. This proposal also lacks any tangible safety benefits and in our view, it would compromise rather than enhance safety.”
By Airport Pickups London