Businesses need to consider terminating contracts with out of town taxis

Businesses have a duty of care to their employees and should therefore consider if out of town taxis are a risk they can’t afford to take


If there is anything I have learnt over the past year, it is that businesses don’t have a clue about the taxi and private hire trade. This lack of understanding extends to procurement departments across who through no fault of their own don’t understand the regulations governing the trade.

Don’t get me wrong, businesses could do far more to ensure they only use legitimate operators, vehicles and drivers, but what should their position be if the operation looks legal? If a company can provide all the licenses to operate a private hire company surely that’e enough to sign on the dotted line and award a contract? Or is it?

I am alluding to the scandal that is out of town hackney carriages. If I was a business, big or small, I would seriously consider my position if a company I had awarded a contract to started using out of town hackney carriages (taxis) on mass.

To help businesses understand why they should consider revoking contracts given to private hire firms that use out of town taxis I have outlined the pros and cons you should consider. Before a procurement department awards a contract you check to see if the company you choose is ethical and abides by the law. Out of town taxis may not be illegal and abides by the law, some would argue that in fact they are immoral and use a ‘loophole’ in the law.

The background to this problem originated in Berwick upon Tweed where an operator wanted to find the easiest way to circumnavigate the strict licensing laws in Newcastle. The high profile case ruled that nowhere in the law did it say a hackney carriage vehicle could not operate on a private basis for an operator outside of its area. The judge in the case as far as I am concerned bottled the judgement, but did say that before a licence was issued a council could ask where the licence holder was to operate. This meant if a applicant was trying to licence a hackney carriage in Berwick upon Tweed or Rossendale but intended to operate on a private hire circuit in Southampton the council could refuse to licence the vehicle or driver.

Councils sadly refused to accept this part of the ruling or chose not too, because by doing so the cash tills rang as some councils saw they hackney carriage numbers increase from less than 50 to over 1,000, making it a nice little earner.


Why would someone licence their vehicle as a hackney carriage in Berwick when they are going to work in Birmingham?

The answer to this is quite straightforward. Imagine you have a supplier whose business is heavily regulated and requires them to jump through lots of hoops. In regards to passenger transport regulators of private hire and taxis would argue these “hoops” are there to ensure the safety of the travelling public.

With out of town hackneys you have a situation where the owner of the vehicle and its driver doesn’t want to abide by these strict rules and regulations so finds the weakest link in the system and then licenses there. This means that the vehicle may not be tested to a higher standard, the applicant can do everything by post, no knowledge test or advanced driving test.

As a company would you be happy if any other supplier found the weakest link in the system to avoid the strict regulations? I expect not. The problems though have far wider implications, including insurance. If you use a private hire firm who uses Berwick or Rossendale taxis, but they are based in Manchester or Birmingham will the owner of the vehicle told his or hers insurer that they are working in a major city and not a small quiet town or village? From research conducted by Licensed Transport Uncovered speaking to the trade and insurance brokers it is highly likely that a large proportion won’t have been truthful.

The next issue to consider is when a person chooses to operate out of their are they are unanswerable to anyone. A licensing official from Birmingham who receives a complaint about a Rossendale taxi operating in Birmingham is powerless to take any action.


With lots of cons what about the pros?

Unfortunately there really are no pros for the public or businesses. All the pros of out of town taxis are for the operator who can use the weakest link in the system to their advantage to licence drivers and vehicles no other council would touch.

As the operator charges the owner driver a weekly fee (approx. £125 per week) the more vehicles they can get, the bigger cash till they will need at the end of each week. Age restrictions can be thrown out of the window along with multiple MOT’s required per year.

I would personally recommend any company that has already has a contract in place should inquire if the operator uses out of town hackneys. If the answer is yes, you can always stipulate that only licensed private hire vehicles and drivers licensed under the same council as the operator should be sent. If the operator cannot commit to this then your only option would be to cease the contract and look elsewhere.

After all being the cheapest is not always the best route as we will be proving shortly. There are always flaws in any system when the government – local or national – creates the law and gets involved, but there are no valid genuine reasons an out of town hackney should be on the road. Unless of course you accept that the owner and operator only care about finding the weakest link in the system to evade local regulations and then we are expected to trust they are concerned about our safety and security.

I am sure we would all use an airline, coach company or train operator who operated under the same principles.

You may also like

Road safety charity, Brake on the importance of tyre safety

Road safety charity, Brake warns drivers and operators of