Private hire car overprovision: independent assessment tool for local authorities

2 Information Sources

2.1 Available information

There is a wealth of information and knowledge which licensing authorities possess or can readily access, which may be used to characterise the private hire services in a locality.

Officers concerned with licensing are often well informed regarding the characteristics of the licensed vehicle trades in their licensing authority areas. As such, they are well placed to make judgements regarding these characteristics, without the need for extensive and expensive data collection exercises.

If it is felt that existing knowledge needs to be augmented, then this can often be undertaken through direct and informal consultation. Much of the information can be used to characterise aspects of the trade, rather than to develop specific metrics.

Traditional licensed vehicle studies often focus on gathering large quantities of specific and measurable data. Much of this data is often used to characterise aspects of the licensed vehicle trade. This approach may be used, to overcome the lack of familiarity with the area, of those undertaking the assessment. However, local officers can often provide the characteristics, without recourse to detailed surveys.

2.2 Who provides private hire services?

Pre booked hire of licensed vehicles are considered to be private hire bookings. Private hire services are provided by both taxis and private hire cars. The relative provision of services by both types of vehicle can vary significantly by location. In some areas most or all pre-booked hires are undertaken by taxis. In other areas, the majority of pre-booked hires may be undertaken by private hire cars. A private hire overprovision assessment would relate to whether or not a cap on private hire cars would be of benefit to the community. In order to do so, it is prudent to ensure that the level of provision afforded by both taxis and private hire cars is considered.

2.3 How are private hires obtained?

Members of the public may pre-book a licensed vehicle, by telephone, online booking system via internet site and by mobile application. These methods account for the bulk of booking methods. A licensed vehicle may also be hired in person at a booking office. If a member of the public approaches a taxi and hires it for a journey, this is not a private hire.

Pre-booked hires may be made with individual licensed vehicle owners or drivers, or through a booking office. In some areas, the majority of bookings are made with individual vehicle owners or drivers. In other areas, the majority of bookings are made through a booking office.

A view on what proportion of private hires are fulfilled through booking offices versus the proportion fulfilled by individual owner / operators may be useful, in conjunction with other information.

2.4 Fleet size versus effective fleet size

One may consider that the capacity of licensed vehicle fleets relate to the number of vehicles multiplied by the hours that these vehicles are available for hire. Some licensed vehicles are operated on multiple shifts and are available for hire, virtually around the clock. Some are operated on a part time basis and may be available for a small fraction of the time of the equivalent multi-shift vehicle. Two similar licensing authorities may have similar populations and similar numbers of licensed vehicles within the area. However, the levels of availability can be quite different. Availability can be affected by the amount of time that vehicles are working.

A quick indicator of the effective fleet size is the driver to vehicle ratio. Lower ratios are likely to indicate that vehicles are predominantly operated by a single driver.

Private hire vehicle licences are held by private hire vehicle operators. Some operators may operate multiple vehicles. Some multiple vehicle licence holders may operate with multiple drivers for each vehicle. A review of the licensing register can provide a relatively quick indication of the proportion of the private hire fleet which is operated by multiple licence operators, versus those which are operated by single licence operators. This analysis can also be undertaken for individual localities within the licensing area.

2.5 Vehicle test mileage

Comparison of and profiling of the annual mileage covered by licensed vehicles is a very valuable source of information and can provide indicators regarding how licensed vehicles are operating and can also help to underpin the assessment of the effective fleet size.

Vehicle odometer readings are usually routinely collected and recorded as part of the normal licensed vehicle testing undertaken on a periodic basis. However, for many authorities, these testing records are stored as individual test records, rather than data from these records stored in a database. Whilst collating and analysing the mileage data from vehicle tests can provide valuable insights, there is often a significant effort required to collate this information. Clearly, unless the information is going to be used, there is little justification for applying resources to collate the information.

Individual authorities would need to take the decision whether resource expenditure on collating mileage information from test records would be of sufficient value for their evaluation purposes.

The mileage information can be used as an ongoing trend indicator. Especially if coupled with the number of vehicles licensed over time. For example, if, in an area where the number of taxi licences are capped, the average annual mileage of taxis increases over time, then this is an indicator that individual vehicles are probably undertaking more hires. If the associated number of drivers are also increasing, this can help to corroborate this hypothesis.

Similar analysis can be undertaken for private hire cars. If the average mileage over time remains at a similar level, then the level of business undertaken by each vehicle is likely to have remained at the same level over time. However, over the same period, the number of licensed private hire cars may have changed. This change would then be a useful indication of changes in the level of demand.

In addition to trend information, a snapshot of annual mileage can provide a profile of mileage across the fleet. Such a profile can indicate what proportion of the fleet are operating as single full time vehicles, what proportion are working on a part time basis and what proportion of the vehicle fleet are working multiple shifts. An example of a mileage profile is presented in Figure 1.

Figure 1 - Example licensed vehicle mileage profile

The profile in Figure 1 indicates that around 38% of the fleet operate in the two bands 20,001 to 25,000 miles and 25,001 to 30,000 miles per annum. Around 25,000 miles per annum is a fairly common annual mileage for a licensed vehicle. The two bands which form the 20,000 to 30,000 mile range suggest that these vehicles in these two bands are operating on a single shift, full time basis. The second peak at 40,001 to 45,000 miles per annum, indicates that a significant proportion of this fleet operates vehicles on a multi shift basis. The large proportion of vehicles which operate at a higher than average annual mileage would suggest that the effective fleet size is greater than the equivalent number of vehicles which are operated by solely single shift full time drivers.

2.6 Changes in licensed vehicle numbers

In uncapped fleets of taxis or private hire cars, increased rates of growth in the number of licensed vehicles over the course of a few years, could lead to reduced business per vehicle, which in turn, may be an indicator of overprovision. In areas where taxis undertake a proportion of private hires, increased taxi numbers will have an impact on the private hire car fleet and the market share captured by private hire cars. Similarly, an increase in the number of private hire cars may have some impact on the number of pre booked hires undertaken by taxis. When the growth in numbers of private hire cars is felt to be exceptionally high and not reflective of increased passenger demand, then use of vehicle mileage trends can help to inform this assessment. If the average vehicle mileage falls over time as the fleet size increases, this suggests that the market has not grown at the same pace as supply. Such conditions could lead to overprovision.

2.7 Changes in driver numbers

People choose to become taxi or private hire car drivers for a variety of reasons. Some drivers remain in the trade for many years. Other drivers start as licensed vehicle drivers but then move out of the trade after a short period of time. If the number of drivers who become licensed increases, along with the number of drivers not renewing their licenses, this can indicate increased levels of turnover of drivers. If increased turnover leads to more experienced drivers leaving the trade, owing to a drop in earnings through overprovision, this could be viewed as a disbenefit to the public, as the local knowledge and experience is lost and this could impact on the levels of passenger service provided.

A profile of the length of time that drivers have been licensed by an authority could be prepared from licensing information. In some authorities, the readily accessible records only go back a few years and may not exceed more than one or two licensing cycles (the duration of a driver licence before it needs to be renewed). However, even with restricted record access, it is generally possible to identify how many drivers were first licensed at the start of their current licence period and how many current drivers had renewed a licence granted during an earlier period.

Often, officers concerned with licensed vehicles will be aware of increased numbers of drivers seeking to become licensed and increased numbers of drivers not renewing their licences after their initial licence expires, without having to resort to inspecting records.

If the turnover of drivers becoming licensed increases and these drivers were primarily engaged in driving private hire cars, this could be an indicator of private hire car overprovision. High levels of driver turnover can be an indication that the level of demand is not sufficient to sustain the level of provision of licensed vehicles.

2.8 Availability of private hire services to the public

If a situation exists where there is overprovision of private hire capacity, one would expect members of the public to be able to book a licensed vehicle within a reasonable time, whenever they needed one. In circumstances when the level of provision of private hire capacity is low, at certain times, or in certain localities, members of the public may complain to the licensing authority about lack of availability.

Complaints about lack of availability don't necessarily indicate systematic under provision. It is prudent to consider the particular details of complaints regarding time and location. For example, if complaints about lack of availability relate primarily or solely to peak periods, then it could be the case that whilst there is adequate provision at all other times, demand exceeds capacity only during this period. As such, it may be unrealistic to expect the fleet size to be able to cope with all eventualities. Capacity to cope with demand for say 90% of the time, may be a more realistic expectation. However, circumstances in each location vary and should be considered on their own merits.

Licensing authority officers are likely to be aware of any existing complaints regarding availability of vehicles for private hire. Lack of complaints may suggest that there is adequate provision.

If there are any concerns regarding availability at certain times or in certain locations, this can be tested by undertaking some sample enquiries regarding availability. Calls to a sample of businesses offering private hire services can be made, at the times in question, to ask about availability for immediate hire. When undertaking such enquiries, one should be aware that some service providers may indicate longer wait times for short journeys or journeys from more remote (relative to the location they service) locations, than for longer journeys or journeys closer to their base of operation. For example, two enquiries a few minutes apart for different journeys may result in entirely different estimates of the wait time for an available vehicle. This can vary between several hours and several minutes. Service providers may offer lengthy wait times as a means of discouraging a hire, rather than an outright refusal, if a hire is likely to leave a vehicle out of position for any likely subsequent hires.

Some private hire service providers have multiple trading names operating from a single booking office. Whilst the phone numbers for the multiple trading names are different, it can be the same person / people answering the calls from all of the numbers. If sample calls are made to check for availability, care should be taken to avoid calling multiple numbers for the same service provider, in close succession, as this could affect results.

Some private hire service providers focus on providing high quality service to regular clients and accept hires from others only at quiet times. For single vehicle owner / operator businesses, which do not derive business through a third party booking office, this is particularly common occurrence. Larger booking offices, which solicit bookings for multiple vehicles, are more likely to have capacity in the working fleet, to cater for ad-hoc hires, as well as catering for demand from regular clients.

2.9 Use of technology

From the use of mobile phones to sophisticated internet web site and mobile application systems, technology plays a vital role in businesses providing private hire services. Some private hire providers rely solely on mobile phones in vehicles to run successful businesses. Others utilise state of the art computer based systems which integrate phones, web site and mobile application inputs to the computerised booking system.

Computer based systems can log a variety of information including:

• The number of telephone calls received.
• The number of calls which went unanswered.
• How many drivers are logged in to the system.
• Origins and destinations for bookings.
• How many hires undertaken

Some systems are capable of providing very detailed reports with how many hires are undertaken per hour and how many drivers are working on the booking system each hour.

Indications of hires per driver per hour are useful when assessing whether the availability of private hire vehicles may be considered to be overprovision.

Whilst it may be possible to obtain detailed feedback from businesses offering private hire services, there can be some reluctance amongst licensing authority officers to seek such information. In fact, fully detailed data is not necessarily required in order to make an assessment. A general indication is often sufficient. Business owners and managers are often happy to discuss the level of hires undertaken at different times of day even if this doesn't involve provision of detailed reports. When seeking information regarding the number of hires undertaken at different times of day and the number of drivers operating during these periods, it is prudent to ensure that the use of the data does not compromise the commercial basis of the businesses concerned. Normally an aggregate assessment of data is sufficient to undertake an assessment and would not identify any particular business and would not identify the rate of hires that are undertaken by a particular business.

Some caution is prudent when accepting information regarding how many drivers are logged on to booking systems. It is common practice on some systems and in some areas, for drivers to log on, whilst engaged on other activities, or waiting at home. This keeps drivers in touch with what is going on and whether they should go out and work if the system is getting busier.

2.10 Drivers of demand

The ratio of taxis or private hire cars to population in a licensing authority area is often used as a benchmark for comparison between authorities. It is tempting to assume that higher ratios indicate that the level of provision could be excessive. However, whilst there clearly is a relationship between the population and the number of licensed vehicles required to service the demand from the population, this is not the only driver of demand. Taxi ranks are commonly found at airports and transport interchanges with rail, bus and ferry services. The passengers using these other modes of transport may also require a licensed vehicle to travel to or from these transport interchanges, but may not live in the licensing area.

Localities with a relatively high density of head offices or regional head offices are significant generators of business visitor trips. Such offices are often located in city centres and can lead to higher levels of demand in these localities.

Business travel is a significant generator of demand for licensed vehicles. People travelling on business may also travel on other public transport modes and may use a licensed vehicle to get between a main transport mode (such as air travel or rail travel) and their ultimate business related destination.

2.11 Vehicle availability for personal travel

The availability of vehicles for personal travel and availability of buses also affects demand for licensed vehicles. Lower car or van availability for personal travel increases reliance on public transport (including private hire cars and taxis).

Transport Scotland publish the Scottish Transport Statistics annually. The following link connects to the publications site. https://www.transport.gov.scot/publications/

To access the latest statistics search the site for "Scottish Transport Statistics".

The Scottish Transport Statistics publication provides car availability, public transport vehicles and licensed vehicle data for each local authority area.

The data sets for vehicles, including licensed vehicles, and for rail, ferry and air travel statistics may be downloaded as spreadsheets, for further analysis.

2.12 Rail travel

Licensed vehicles are often used to travel to and from railway stations. Growth or shrinkage of rail passenger numbers may influence demand for pre-booked hires at a railway station. Rail passenger data covering all stations for the latest year and historic data, is published annually by the Government Office of Rail and Road. The latest statistics can be accessed via the following link: https://dataportal.orr.gov.uk/statistics/usage/estimates-of-station-usage/