Cab Apps - Stay Legal With Private Hire Apps

Cab Apps - Stay Legal With Private Hire Apps

With the rise of mobile-based private hire apps such as Uber and Curb heralding a national network of taxi drivers, we look at the pros and cons of joining a network and its implications for staying legal and insured.

Like AirBnB, Apple and Amazon have all become famous as disrupters in their respective sectors, it was only a matter of time before the taxi industry underwent a transformation in its business model. Mobile technology has encouraged us to use apps for ordering food deliveries, have secure online banking on the go, listening to music favourites and playing games. Now with the like of companies such as Uber, Gett, Kabbee, Wheely and Bolt, taxi app services have sprung up the length and breadth of the country changing the very landscape of our towns and cities and the customers who use taxis.

Uber is perhaps the most well-known of the rideshare apps. Founded in 2009 it has garnered around 110 million users in 785 different locations worldwide.

The Taxi Market

Figures published by the Department for Transport in 2019, showed that England was home to 291,800 licensed taxis and private hire vehicles (PHVs) – with the latter accounting for 76 percent of all licensed vehicles. In 2019, the total revenue in the UK taxi industry was £9bn, according to data published by IBISWorld. With the average salary for taxi drivers in England standing at £475 per week, (according to figures published by jobsite Indeed) it’s still a rewarding business to be in.

The flip side is a report showing the effects of the COVID 19 pandemic  with 160 cabbies quitting each week and the number of licensed taxis in London alone falling by a fifth from 18,900 in June to 15,000 in November this year. And of those remaining, only 20 per cent of cabbies are still driving their vehicles, according to the Licensed Taxi Drivers’ Association.

Moving to an App-Based Taxi Service

So, might this be a good time to pivot your business into the app-driven private hire sector? Regardless of whether you run a conventional private hire taxi business or one linked to a specific app, you will still need the correct documentation to ensure that you stay legal on the road and protect the lives of other road users and the safety of your customers.

Remember that in order to drive a taxi or a private hire vehicle you need a special licence. Depending on where you’ll be operating, inside London or outside, there are different ways in which you can apply. The information you need on both types of licence can be found on the website.

You need to get a special operator licence from your local authority if you want to run a business as a private hire vehicle (PHV) operator. You’ll also need driver and vehicle licences if you’re working as a one-person operator. You can find out what you need in your area by visiting your local council.

PHV operator licences last for a maximum of five years, driver licences for up to three years and vehicle licences for up to one year. The driver, vehicle and operator must all be licensed by the same authority.

However, if your licence application is refused because the authority is not satisfied you meet its criteria of a ‘fit and proper person’, or if you don’t accept the conditions it sets you can appeal to a magistrate’s court.

Once a private hire car or minivan has been licensed by the appropriate council, it will always be classed as a private hire vehicle until such time as the licence expires. At this point you might want to  renew the licence or not depending on your circumstances. To operate as a private hire vehicle, you must have this licence in place but also to be booked through an operator who is licensed for private hire vehicles. This can be over the internet via an app or via a telephone system.

Is Normal Motor Insurance Enough?

No, a normal motor insurance policy will not cover you. You will need to arrange private hire insurance as this will cover you for a variety of different things that a standard insurance policy will not cover you for. There are plenty of different insurers that specialise in taxi and private hire insurance, which is often referred to as PCO insurance, so it is worth shopping around to find the right policy for you.

Many of the app companies have useful links on their site detailing all the information you need to trade legally, so it’s worth going through each one in detail to find out the specific details pertaining to each app. Before you start it’s also worth speaking to your insurer broker who should be able to provide you with that all-important advice you need before you jump to an app-based platform.

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