Earlier this month, the UK’s competition watchdog, the Competitions and Markets Authority (“CMA“), criticised Transport for London’s (“TFL“) proposed new rules for private hire vehicle companies, which would impose significant restrictions and burdens on companies such as Uber.
Since March 2015, TFL has been conducting a wide-ranging review into private hire vehicle regulations and entering into consultations. In its September 2015 Consultation paper, TFL lay down twenty-five suggested measures which seek to reform the rules concerning private hire operators, private hire drivers, private hire insurance, and private hire licensing. The paper comes largely in response to lobbying from more traditional minicab service operators, such as black cab drivers, who have continuously asserted that a lack of regulation is harmful to their business.
However, there is widespread concern that TFL’s suggestions would adversely affect consumers, business, and competition whilst also being contrary to public interest generally. Alex Chisholm (Chief Executive of the CMA) wrote in the Financial Times earlier this month that the proposals would “artificially restrict competition, curbing developments that benefit the paying passenger”. He opined that “new companies in every market will stand or fall on their ability to meet consumer demand – and those that succeed will, in turn, eventually be challenged by new business models. This is how innovation leads to progress. We do not serve the interests of the public or the wider economy if we slam on the brakes.”
Uber has managed to rally huge support with over 205,000 people signing an online petition opposing the plans. Some of the most highly criticized requirements are that:
1. customers must wait a minimum of five minutes to be picked up;
2. operators must not show vehicles available for booking on a map;
3. operators must specify a fixed fare at the commencement of a journey;
4. operators must input a fixed destination at the time the booking is made;
5. operators must offer a facility for pre-booking a ride up to a week in advance;
6. operators must provide a telephone line for passengers to access at all times;
7. drivers must pass a geographical skills based assessment;
8. drivers may only work for one operator at a time; and
9. there must be controls imposed on ride sharing.
Uber has reacted by further widening its accessibility and availability to Londoners. Specifically; it has since introduced an ‘UberPool’ service which allows customers to split a journey with a co-rider for a cost reduced by 25%, and it has also created a “Ride Request” button which developers may add to their iOS or Android apps. Evidently, Uber is refusing to allow the proposed regulations to hinder its developing business model.