Taxi services

25 October 2007

The OFT has published an independent evaluation of the impact of the 2003 taxis market study.

Download Evaluating the impact of the taxis market study (pdf 580 kb)

3 August 2005

Taxi numbers increased since OFT report. Department for Transport consultation document on taxis licensing was welcomed by the OFT. See press release.

18 March 2004

The Government publishes its response to the Office of Fair Trading report on the regulation of Licensed Taxi and PHV services in the UK. See the response on the Department for Business, Enterprise and Regulatory Reform website.

See the OFT response to the Government announcement.

5 March 2004

The OFT has published its full response to the Transport Select Committee report 'The regulation of taxis and private hire vehicles in the UK'.

Download OFT response (pdf 181 kb).

11 November 2003

The overall quality of taxi services could be enhanced by reforming elements of the regulatory framework, the OFT has concluded in its study of taxi services.

Download The regulation of licensed taxi and PHV services in the UK (pdf 537 kb).  See below to download the annexes.

While some aspects of regulation are entirely sound, other aspects can be improved, and in particular quantity regulation should be removed:

• quantity regulation – limiting the number of taxis reduces availability and lowers the quality of service to the public. These restrictions should therefore be lifted
• quality and safety regulation – there are compelling reasons to regulate to safeguard driver and vehicle standards. But there are questions about whether quality regulation always achieves its goals proportionately
• fare regulation – there are sound reasons to regulate taxi fares, for example, to protect consumers in vulnerable situations. But there could be greater freedom for beneficial price competition below regulated fare caps.

If the OFT's recommendations are acted on, it will benefit consumers by:

• putting more taxis on the road – removing quantity restrictions could increase the number of taxis in affected areas by 30 per cent
• making journeys safer – removing quantity restrictions and increasing the number of licensed taxis will reduce the need for illegal taxis where neither the driver or vehicle have been subject to appropriate quality and safety checks. Last year around 1.8 million people used an illegal taxi, exposing themselves to potentially serious safety risks
• reducing passenger waiting times – removing quantity restrictions will save an overall 2.5 million hours across the UK
• creating more choice – removing quantity restrictions could put an extra 15,000 taxis on the road. This will substantially increase peoples' choice of transport modes when deciding how to reach their destination
• promoting best practice in licensing authorities' application of quality and safety controls to ensure the needs of local people are met and that individuals and businesses are not deterred from supplying taxi services
• protecting people in vulnerable situations from overcharging, while encouraging the benefits of fare competition.

See press release.

Downloads

The regulation of licensed taxi and PHV services in the UK (pdf 537 kb)
A market study looking at the regulatory framework affecting licensed taxis and private hire vehicles (PHVs).

The annexes can be downloaded seperately:

Annexe A: Legal framework of taxi and PHV licensing in the UK (pdf 236 kb)
Annexe B: Statistical background (pdf 226 kb)
Annexe C: Impact of regulation on taxi markets - consumer survey (pdf 190 kb)
Annexe D: Impact of regulation on taxi markets - case study analysis (pdf 204 kb)
Annexe E: Valuation of Hackney carriage licence premiums (pdf 206 kb)
Annexe F: The consumer welfare impact of regulations on the UK licensed taxi markets (pdf 108 kb)
Annexe G: Taxi markets literature review (pdf 193 kb)
Annexe H: Modelling the effects of taxi regulation (pdf 374 kb)
Annexe I: Consumer survey report (pdf 385 kb)
Annexe J: Impact of taxi market regulation - an international comparison (pdf 549 kb)
Annexe K: Results of taxi Omnibus Survey: July 2003 (pdf 129 kb)
Annexe L: List of consultees and consultants used (pdf 50 kb)

Background

The study looked at existing regulations on the market for licensed taxis, examined the effectiveness of competition in the market, and how well the market is working for consumers. Its scope was widened to include licensed mini-cabs (otherwise known as private hire vehicles).

It compared experiences between local areas where regulations differ, to help assess the affect on the overall quality of service available to passengers.

The main focus of the inquiry was the effects of licence restrictions imposed by many local authorities on the supply of licensed taxis.

Download background paper (pdf 63kb)

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