Private hire car overprovision: independent assessment tool for local authorities

5 Implementation of a Limit

5.1 Market assessment and justification

When considering the market for pre-booked hires, it may be prudent to consider the proportion of the market which is fulfilled by private hire cars and the impact that additional private hire cars joining the fleet may have. Licensed vehicles are operated as independent businesses and as such, are subject to market forces and competition.

Access to the market is restricted by licence. Holders of vehicle and driver licences are considered to be fit and proper people who are suitable to hold licences and positions of trust and responsibility. The privilege of being granted a licence also confers some responsibility to provide a public service without discrimination.

If the provision of licensed vehicles to service the demand for pre-booked hire is considered to meet or exceed the level required to meet demand, one could consider whether the level of provision of private hire vehicles results in a negative impact on the community or whether the addition of more private hire cars would result in such an impact.

Overprovision of private hire vehicles is generally held to mean that the level of provision is higher than the minimum required and that by maintaining or increasing the level of provision, there would be a dis-benefit to the public.

If there is evidence of a dis-benefit to specific sectors of the community, such as those in a particular locality or those with particular mobility restrictions, then any limit could potentially take these into account and include potential measures to address such dis-benefits.

Any limit to combat overprovision should be in the interests of the community and provide a benefit to the public. The interests of the community would be served by high levels of availability and good levels of service, in terms of driver skill and knowledge, customer service and vehicle comfort and vehicle standards.

5.2 Multiple aspects of corroboration

As indicated in earlier sections, there are several potential sources of information which could indicate the existence of overprovision. It is prudent to obtain indications from multiple sources to corroborate the findings and to help justify the assessment reached.

It is prudent to also consider alternative interpretations which could be applied to each of the elements which are considered to be indicative of overprovision.