Driving Transactions
Thursday, July 18, 2024


The last time I visited the Holy Grail of the world’s taxicab system—London—I discussed the many issues the city has in common with New York City and the marble of the famous "Knowledge" examination for black cab drivers. Little did I know that, at the same time, Uber was preparing to take London by storm, capitalizing on the lack of clarity in some Transport for London (TfL) rules and regulations. I have provided advice to both TfL and the London Assembly on best practices and transportation technology issues over the past few years, and things are now starting to move and change in London.

Back in 2012, Uber introduced its service in London and flooded the roads with drivers who substituted smartphones for taximeters—much to the dismay of black cab drivers who spent more than four years studying the Knowledge in order to drive a cab. Initially, TfL noted that “after a careful consideration of the factual and legal position of the use of smartphones to receive fare information, [they] were not unlawful for the purpose of the private hire legislation”. However, the industry fought back with a strike that brought Central London to a standstill, in part playing right to the hands of Uber, which saw a 400 percent spike in downloads of its app. TfL yielded to the appropriate request by the industry, pursuing the matter through the courts and requesting that Her Majesty’s High Court of Justice in England once and for all declare the correct interpretation of TfL’s rules regarding the use of smartphone apps in Uber vehicles, and if such apps are the equivalent of a taximeter.

cd0415 Uber Effect London Matt Daus

Industry trade group Licensed Taxi Drivers Association (LTDA) brought a private criminal proceeding at the magistrate’s court (lower first instance courts) against a small number of Uber drivers, alleging breach of the taximeter prohibition by Uber drivers as a result of their use of smartphones in their vehicles to determine fares. As such, LTDA derailed the TfL’s application for determination by the High Court, as it lacks jurisdiction to consider applications for determinations where there is ongoing prosecution in the criminal courts for the same legal issue. LTDA was unwilling to withdraw its proceeding in the fear that if TfL later failed to take action, or if the High Court failed to hear the application, it would be “time bared” and unable to bring the cases back to court. After reviewing the allegation by LTDA, the magistrate court concluded that the matter should be considered by the High Court and adjourned the case indefinitely, which means the case remains outstanding and precludes TfL from seeking declaration from the High Court. Following the magistrate court’s adjournment, the TfL has requested that LTDA withdraw its case; as it stands, LTDA has yet to respond to this request, which is delaying the process and allowing Uber to expand its service unabated.

I returned to London around the time of the strike and legal wrangling to testify before the London Assembly Transport Committee at its request, and discussed various issues that could help London maintain its much-celebrated taxi-service standard. I was invited by Caroline Pidgeon MBE, the Chairwoman of the Transport Committee, to address the committee on issues such as: the impact of taxi drivers’ strike and the controversy surrounding TfL’s management of the trade groups; potential benefits and pitfalls of new transportation technologies; supply-and-demand issues of availability and accessibility of taxi and private hire services across different parts of London and at different times of day; areas of improvement based on the best regulatory practices of other jurisdictions; integrating taxi and private hire services with other transport options (e.g., Tube and bus); the role of pedicabs in transport systems; and the different payment options for taxi and private hire services including lessons to learn from New York City’s installation of credit card readers. The webcast of the hearing can be accessed at bit.ly/1eihgbm. The committee was tasked with preparing a report and publishing a recommendation to the mayor and TfL to improve the service quality of both taxis and private hire services in London, to further improve its much acclaimed “gold standard” service.

The committee members had raised many legitimate concerns about the advent of transportation technology companies and their impact on the London black cab industry. I indicated to the committee that the London black cab service has been the gold standard for many years, and to maintain this standard, now is a good time to take a fresh look at things. The rules that govern the industry date back almost 400 years, and I applauded the committee and the London Assembly’s efforts to take a fresh look at the system holistically and to revamp areas of the law that are outdated to make sure that the industry does not fall behind the times.

I also reiterated to committee members that London should mandate credit card processing machines in all black cabs. For a world-class city with nearly 16 million visitors every year, there should be no regulatory tolerance for driver resistance to processing passenger credit cards. When I was the commissioner/chair of the New York City Taxi and Limousine Commission, I faced the same resistance before we prevailed and mandated that all taxicabs would be equipped with credit card processing units. I told committee members that they should mandate credit cards in every black cab to maintain the quality and service standards, as well as to increase passenger satisfaction. Once this is done and drivers’ tips and earnings begin to increase, resistance should fade—like it did in NYC.

While I was in London, I had a chance to meet with the media to discuss various issues I raised at the committee hearing. The full interview can be accessed at bit.ly/1rTTwSV. In December 2014, the Transport Committee published its report on the future of the taxi and private hire industry, taking into account some of the issues and guidance that I provided in my testimony before the committee. The full report can be accessed at bit.ly/1E7yS4s. The report called on both the mayor of London and TfL to maintain the existing distinction between black cabs and the private hire industry to meet the differing passenger service requirements, and emphasized the need for a clear strategy that will ensure the survival and prosperity of both services, while guaranteeing safety, availability, and accessibility of service to passengers. In regard to new transportation technology entrants, the report, while acknowledging their immense potential to increase service quality and availability, highlighted that they may also cause unbalanced blurring of the lines between the taxi and private hire industries, which ultimately may reduce passenger choice.

Some of the specific recommendations include:
• The mayor of London publishes a long-term strategy clearly establishing the actions that will improve passenger and driver safety, guaranteeing a sufficient number of high quality drivers and vehicles across the city, and ensuring that all services meet the highest possible standards for accessibility

• TfL develops a database that links drivers to vehicle and operator information with a tool that will enable passengers to check the status of their driver, vehicle, or operator

• TfL produces a signage strategy for the licensed taxi and private hire industries, including plans to commence a pilot program for new specialized license plates for black cabs and private hire vehicles

• The mayor and TfL introduce options to incentivize the uptake of cashless payment options, for both the taxi and private hire industries

It remains to be seen how London will move forward on transportation technology regulatory issues. While movement may be tied up in the courts right now, the London Assembly is determined to forge ahead; technology disruptors are not waiting for the governmental authorities, and are seeking to transform the system and move forward on their own. I believe that the mayor and the Assembly will reach a middle ground and that we will soon be looking at many improvements to the system to make it stay at the top of the regulatory world. The gold of the London regulatory system may have some fingerprints and smudges on it right now, but I am confident that the results of these ongoing conflicts will cause it to become shiny and brilliant once again. [CD0415]

Matt Daus is a partner with the law firm Windels Marx, President of IATR, and a leading authority on ridesharng apps. He can be reached at mdaus@windelsmarx.com.