Policy Exchange - Mayor can make Uber pay more tax and operate more safely, says think tank, as it calls for black cab shake up
Uber London paid same tax in 2013 and 2014 as three black cabbies. Steep rise in accidents involving cabs, but black cabs need to change too, think tank report says
Uber should be made to impose a maximum 12-hour day on its drivers – as it already does in New York – amid evidence that its arrival has coincided with a steep rise in overall London cab accidents.
The company, which paid almost no UK tax in 2013 and 2014, should also be forced to contribute its fair share to the roads it depends on.
The Mayor, Sadiq Khan, has powers to require Uber to do both things under a little-known act of parliament.
Black cabbies, for their part, must cut their “prohibitive” night fares, adopt a universal Uber-like booking app, and disown an “ultra-conservative minority” who damage the trade’s image with “counterproductive” protests and blockages.
The recommendations come in a hard-hitting new study of the London taxi trade by the Capital City Foundation, a unit of the centre-right think tank Policy Exchange.
The study, Saving The Black Cab, is authored by the LBC presenter Nick Ferrari, who said: “London risks losing yet another thing which makes it different, special, and civilised: the world’s best taxis. But to survive, cabbies must change. They need to out-compete Uber, not just demand that someone else makes the competition go away.
“Uber in London is popular and here to stay. Yet as we show, it also has a dark side. Letting it control the taxi market wouldn’t be good for Uber users, black cab users, or the vast majority of Londoners who seldom use either.”
Andrew Gilligan, head of the Capital City Foundation, said: “The rise of Uber and other ride-sharing services has brought both benefits and costs. But the costs, such as congestion, are felt by more people than the benefits.
“We must tackle those costs, and Uber’s principal unfair advantage, of paying less than the normal UK tax:
a completely indefensible position, given its total dependence on roads provided by the UK taxpayer. It has chosen to pay more tax last year than it did before, but the payment of tax should not be a matter of corporate choice.”
The report finds:
- In 2013 and 2014, Uber London had a total turnover of £12.4 million and paid a total of £28,796 in UK tax. In 2015, it had a turnover of £23.3 million and paid £411,000 in UK tax. It does not pay UK VAT. The report calculates that its fair share of the cost of using London’s roads over the three years would have been £8 million (page 60.)
- The rise of Uber has coincided with a significant rise in taxi or minicab accidents. There has been a 39 per cent rise in the number of casualties involving taxis or minicabs in London in the last year for which figures are available (page 42).
- Casualties involving taxis or minicabs in London are now 102 per cent higher than the 2005-9 average (page 42).
- The figures are not broken down between taxis and minicabs. However, it appears likely that this very substantial rise is due more to minicabs than to black taxis. The number of black cabs in London has not changed substantially since 2005–9. The number of private hire vehicles has risen by about 40 per cent. Yet the accident rate is also rising much faster than the number of vehicles is rising (page 42).
- There are eight times more reported incidents in London involving Uber drivers than black taxi drivers, according to a trawl of databases and media reports over a 12-month period (pages 44-5).
- Uber London until recently encouraged drivers to work up to a 65-hour week, nine hours more than the legal maximum for bus or lorry drivers (there is no limit for minicabs.) (page 47).
- Uber is pressing for an end to TfL background checks on minicab drivers, raising the risk of a return to the days when cab sexual assault was common (page 45).
- Many claims made by Uber about its UK drivers’ incomes and its impact on London congestion are wrong (pages 55, 62-3).
- During the day, black taxis’ main disadvantage is on predictability and convenience, not price. For short journeys in inner London, the most common black taxi ride, fares are not much more expensive than Uber’s. According to surveys conducted for the report, what Uber customers preferred over black taxis was the predictability of the fare and the car’s arrival, and the fact that no cash had to change hands (page 26).
- At night, and on longer journeys at all times, black taxi fares are much less competitive – typically double the Uber fare. Even 48 per cent of taxi drivers themselves thought they were too high (page 31).
- Only two-thirds of black cabs are bookable through any app. The largest single app, Gett, only covers about half of cabs and an estimated 8,500 vehicles are not on any app at all (page 28).
- The Knowledge continues to have real practical value. It delivers faster journeys than GPS and has also proved its worth in weeding out unsuitable individuals from the profession of taxi-driving (pages 19-21).
The report recommends:
- Tariff 3, the premium night (10pm- 5am) black taxi tariff, which is up to 60% higher than daytime fares, should be abolished. Tariff 4, the premium tariff for all journeys over six miles, should apply only over 12 miles. Consideration should also be given to abolishing the shoulder Tariff 2, about 25% higher than daytime fares, which applies mid-evening and all day at weekends.
- Weekday daytime fares (Tariff 1) do not need to be reduced. But there should be more compulsory flat fares, including from Heathrow to central London, and guaranteed maximum fares.
- A universal black taxi app should be created and all black cabs should take part. They could still accept street hails or phone bookings in the current way.
- The Knowledge and the standards of vehicle should not be diluted.
- Black cabs should recognise that the aggressive lobbying by an “ultra-conservative minority” for everything to stay exactly as it was is unrealistic and alienates potential users.
- Uber London’s five-year private hire operator’s licence expires in May 2017. The Mayor should renew it only on condition that Uber London agrees to pay either full UK tax, including VAT, or a contribution to TfL equivalent to its share of the cost of using the capital’s roads.
- The Mayor should also impose a requirement that Uber limit its drivers’ hours to 12 a day, as Uber in New York already has done.
- The legislation allowing this is sections 3 (3) (b) and 3 (4) of the Private Hire Vehicles (London) Act 1998, which gives the licensing authority, TfL, power to impose “such conditions as may be prescribed and such other conditions as the licensing authority may think fit” before granting a London operator’s licence.
- The reference in the original 1998 Act is to the Secretary of State, but following the establishment of the London mayoralty this was changed to the licensing authority, TfL, by the Greater London Authority Act 1999, see http://www.legislation.gov.uk/ukpga/1998/34/section/3#commentary-c952118
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