Introduction


In recent months, the debate on the legalities of cross-border hiring has seen no abating.  There have been several judicial decisions on the matter and of course the taxi finish and task group has made recommendations to Government to legislate in order to address concerns and close the “loop”. In this article I will briefly look at all the relevant arguments and legislative provisions to update the trade on the most recent thinking and legal position.

Cross-border hiring


There is no official or statutory definition of cross-border hiring.  The term is generally used in the taxi and private hire sector to describe a practice where taxis or private hire vehicles (PHV) that are licensed by one licensing authority work wholly or predominantly in another licensing authority area. There are a variety of means through which cross-border hiring can manifest itself.  For example, a taxi licensed in one licensing authority area can do advanced booking/hiring work elsewhere in the country or private hire operators can sub-contract bookings to other out of district operators who can then dispatch a licensed vehicle and driver from the out of district fulfil the booking. The evolution of cross-border hiring has taken the practice to its extreme where it is now common for private PHV and drivers to “roam” the country and work wholly or predominantly in area away from where they obtained their licences.  This form of cross-border hiring is most prevalent with operators who operate using smart phone apps such as Uber.  In fact, Uber’s entire modus operandi is based on obtaining operating licences in only key locations around the country despite covering most of the country. Recent cases In recent times, there have been a number of attempts to find a judicial solution to cross-border hiring.  The cases referenced below are the most recent.

R (Uber Britannia Ltd & Delta Merseyside Ltd) v Knowsley Metropolitan Borough Council [2018] EWHC 757 (Admin)


In this case, heard before the High Court, Knowsley MBC adopted an intended use policy in to address a significant rise in the number of applications for private hire driver licences from applicants who resided outside of its area. Intended use policies are policies that place a duty on licence holders to predominantly work in Knowsley, and failure to comply with its policy would have resulted in a licence holder losing their licence for not being “fit and proper”. Uber Britannia Limited and Delta Cars challenged the imposition of such a policy and the case was heard by Mr Justice Kerr in the High Court in Manchester. Uber argued that a private hire licence was a licence to drive anywhere and was not confined in any way to a local area. That was made clear by section 75(2) of the Local Government (Miscellaneous Provisions) Act 1976 (“LGMPA 1976”), and by various decided cases. This argument was accepted by Mr Justice Kerr. Kerr J rejected Knowsley’s case that the statutory definition of “fit and proper” could include a situation where a driver who had “failed to show commitment” to Knowsley and the concept of local licensing, might be deemed unfit to hold a licence, given the width of the council’s discretion. In addition, Delta Cars argued that a private hire licence was a generic permission, without geographic control, as opposed to a specific permission, which attached to a particular premise or place. Kerr J ruled that Knowsley’s policy was unlawful as it sought to impose geographical restrictions on private hire licences where the primary legislation did not support such an approach. Delta Cars advanced further arguments around local authorities’ means to lawfully control the issue cross-border hiring. These additional arguments included that it may be lawful for a council to adopt appropriately worded conditions which promotes the principle of localism with regards to private hire licensing. Since the policy was ruled unlawful, it was not necessary for Kerr J to rule on these additional arguments but he did provide verbal observations indicating that there may be scope for persuading the Court on the lawfulness of these means.

Reading Borough Council v Mudassar Ali


This is a Magistrates’ Court case and to this extent does not carry any judicial authority. Notwithstanding, this case was the first judicial decision on the topic and very relevant to the ongoing debate about the right to roam and to this extent it is helpful. In this case, Reading Borough Council brought a prosecution against Mr Ali, a private hire driver licensed by TfL and working for Uber. Mr Ali was charged with two offences of illegally plying for hire in January 2017. Reading argued that Mr Ali was unlawfully plying for hire. They argued that there was a market in Reading for Uber drivers and vehicles which would not exist if they were not there.  The market was created by the exhibition on the Rider App of icons showing the location and availability of the Uber vehicles.  Reading said that Mr Ali was in possession and control of the Ford Galaxy which was not a hackney carriage.  Mr Ali chose to travel to and wait in Kings Road, Reading at a time when, and in a place where, members of the public were likely to wish to be immediately conveyed in a vehicle. In brief, Mr Ali contended that the essence of the private hire contract was that the member of the public books the vehicle first and then meets the vehicle before the journey proceeds.  That is not plying for hire. Chief Magistrate Judge Emma Arbuthnot, in her judgement stated that the issue in the case was whether the Uber “model” using an App should lead her to conclude that she was sure that the defendant was plying for hire on the two dates. In her judgement she said: “The fact that Mr Ali’s vehicle had no distinctive markings, was not at a stand and was not available to pick up passengers on the street combined with the fact that the whole transaction was conducted via an App where the booking process starts, is recorded and the fare estimated, leads me to find that Mr Ali was not plying for hire. “I find the App follows from the job-master, then the telephone booking system and is the most up-to-date way of booking a mini-cab. I have no doubt that the technology will move forward and be susceptible to challenge in the future. So far as the App based booking system in this case I do not find that I can be sure that Mr Ali was plying for hire in those circumstances.”

Uber Britannia Limited (UBL) V Brighton & Hove City Council (BHCC)


This is the appeal against BHCC refusing Uber’s operating licence there.  Whilst the case was determined on its individual merits, the judgement makes some helpful comments and a agrees with many of the conclusions of Reading v Uber. In the BHCC case, both parties accepted that there is nothing unlawful in “cross-border hiring”.  Uber went further by arguing that cross-border hiring is a “a statutory right” therefore and they cannot be restricted from exercising that right. The District Judge in the case concluded in here judgement: “The licensing “triple lock” and “right to roam” are clearly embodied within this statutory regime and endorsed by the case law as set out above. The spirit of this legislative framework as further deregulated in 2015 supports an open market.” I again stress that this was a Magistrates’ Court decision and therefore not binding but nonetheless useful for the purpose of this article.

Legislation


Section 46 LGMPA 1976 outlines clearly what licences are required to operate a private hire vehicle: ·       S.46(a) – no person being the proprietor of any vehicle, not being a hackney carriage, shall use or permit the same to be used in a controlled district as a private hire vehicle without having for such a vehicle a current licence ·       S.46(b) – no person shall in a controlled district act as driver of any private hire vehicle without having a current licence ·       S.46(c) – no person being the proprietor of a private hire vehicle licensed under this Part of this Act shall employ as the driver thereof for the purpose of any hiring any person who does not have a current licence ·       S.46(d) – no person shall in a controlled district operate any vehicle as a private hire vehicle without having a current licence S.75(2) of the LGMPA 1976 makes provision for PHV “roaming” where their licences have been issued by a “…council whose area consists of or includes another controlled district…”.  This right however is limited to PHVs and drivers not operators and the Dittah[1] principle applies, i.e. operators, drivers and vehicle must be issued by the same authority.

Task and finish group report


A brief mention of the recent task and finish group report is appropriate.  The report specifically sought to address the issue of cross-border hiring in order to find a statutory solution. The report said: “A number of submissions to the Group supported a proposed restriction that taxi and PHV journeys should only be permitted where the start and/or end point are within the licensing area of the driver, vehicle and (for PHVs) operator. This was primarily proposed to address concerns over the drivers operating predominantly or exclusively outside of the area in which they are licensed. “That proposal is the most effective on the table. There would be a need to carefully consider any flexibilities that may be needed to allow for specific destinations to continue to be served without disruption (e.g. airports), business models to continue (e.g.in the chauffeur / executive hire sector), or specific services for the disabled to not be disrupted.” The group consequently made the following recommendation to the Government: “Government should legislate that all taxi and PHV journeys should start and/or end within the area for which the driver, vehicle and operator are licensed. Appropriate measures should be in place to allow specialist services such as chauffeur and disability transport services to continue to operate cross-border.” A very similar recommendation was put forward by the All-Party Parliamentary Group on Taxis. Arguments both ways – A brief overview It is generally accepted that as far as PHVs and drivers are concerned, there exists a right to roam (Knowsley and others). The crux of the ongoing legal argument has centred on the role of licensed operators, who have not such right attached to them.  To operate means to “make provision for the invitation or acceptance of bookings for a private hire vehicle.” (s.80 LGMPA 1976)  Operating PHVs is limited to the relevant controlled district (s.46(d)).  There is therefore an argument that, briefly stated, PHVs and drivers presenting themselves (i.e. parking up, roaming) wholly or predominantly in areas where they are not licensed is making provision for the invitation of bookings thereby offending s.46(d)). However, the outcome in Reading v Ali – allowing that it was only a Magistrates’ case – concluded that the argument above is wrong because, again briefly stated, the transaction is wholly between the passenger and the licensed operator (i.e. via an app, phone etc.) and where the PHV is located at the time is not relevant.

Concluding remarks


Return to base or right or roam?

The current position seems to be favouring the right to roam argument.  This is evident in the outcomes of the recent court cases on the matter.  Furthermore, the fact that the task and finish group suggested a change in law to address the issue of PHVs & taxis returning to base suggests there is a general view that there is no current legislative requirement. There is however an emerging argument that the right to roam is arguably making provision for the invitation of bookings thereby offending s.46(d)).  This argument however is judicially untested at present but it is only a matter of time before this is brought before the courts for a judgement.

[1] Dittah v Birmingham City Council [1993] RTR 356

Stephen McCaffrey

Regulatory Barrister specialising in taxi and private hire licensing law. Head of Taxi Defence Barristers and Taxi Defence Scotland.

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