UK Taxi & Private Hire Licensing Circulars Explained

In the United Kingdom, particularly within the intricate landscape of Scottish transport, the operation of taxis and private hire cars is meticulously governed by a framework of legislation and guidance. A 'taxi and private hire car licensing circular' serves as a pivotal document within this framework. Essentially, it is an official communication, issued by a central authority (historically the Secretary of State for Scotland, guiding local councils), that provides detailed instructions, interpretations, and recommendations regarding the implementation of licensing laws. These circulars are not merely advisory notes; they are instrumental in ensuring a consistent and effective application of regulations across different local authority areas, aiming to uphold public safety, fair competition, and service quality in the vital public transport sector.

The specific circular referenced, ANNEX A of SDD CIRCULAR NO 6/1983, delves into the nuances of the Civic Government (Scotland) Act 1982, outlining how its provisions for taxis and private hire cars should be adopted and enforced by district or islands councils. It's a comprehensive guide for licensing authorities, detailing everything from the definitions of vehicles and drivers to fare setting, inspections, and handling of offences. Understanding this document is crucial for anyone involved in the taxi and private hire industry in Scotland, as it lays bare the expectations and requirements of the regulatory bodies.

The Adoption of Licensing Provisions by Local Authorities

The Civic Government (Scotland) Act 1982 introduced optional provisions concerning the licensing of taxis and private hire cars. This means that each district or islands council had the autonomy to decide whether to adopt these provisions after due public notice and consultation. However, the Secretary of State held a strong view that these provisions should be adopted across almost all areas, with the exception of the most sparsely populated ones. The primary rationale behind this recommendation was to prevent the creation of 'pockets' of unlicensed but populated areas. Such areas could inadvertently become bases for so-called "pirate" operators, who might then illegally foray into licensed territories, creating significant enforcement challenges for the police and undermining the regulated market.

Before any council decided against implementing licensing in a particular area, the circular strongly suggested that they seek the views of the Chief Constable. This consultation would assess the implications of such a policy on the police's ability to enforce the law effectively in both licensed and potentially unlicensed areas. Nevertheless, an exception was acknowledged for remote rural areas where no licensing currently existed, and its absence did not pose major problems. In such specific circumstances, the immediate introduction of licensing might not be deemed necessary. It's also critical to note that section 12 of the Transport Act 1985 stipulates that a taxi cannot be used to provide a local service unless it is a licensed taxi.

Should a licensing authority resolve to adopt these provisions, they are then mandated to license and control both taxis and private hire cars concurrently. While there are distinct operational differences between these two types of vehicles, the similarities in the service they provide to the public necessitate a unified approach to regulation. The definitions clearly establish that a taxi possesses all the capabilities of a private hire car, with the additional crucial ability to pick up passengers without prior booking in public places such as streets, stances, and stations.

Key Aspects of Licensing and Regulation

Licence Limitations and Powers

One significant distinction outlined in the circular pertains to the limitation of licences. A licensing authority may, but only if they are satisfied that there is no significant unmet demand for taxi services in their area, refuse to grant a taxi operator's licence for the purpose of limiting the number of taxis. This decision, however, is subject to appeal. Crucially, no such specific power exists for limiting the number of private hire car licences or drivers' licences. This reflects the different operational models of the two services, with taxis often operating in a more open market for immediate hire.

The Secretary of State also retains a reserve power to prescribe specific vehicle types, sizes, and designs that licensing authorities must deem suitable. This power is intended for differential application, meaning different criteria could be prescribed for various areas. This is primarily a safeguard against local authorities imposing overly specific or expensive vehicle requirements on the trade, which could lead to increased costs for the public.

Detailed provisions also cover the mandatory inspection and testing of vehicles, the charging of fees for licences (which must be set to cover the costs of administering the licensing system), the testing and qualification of drivers, and a discretionary power for licensing authorities to appoint dedicated taxi stances.

Setting and Reviewing Taxi Fares

A fundamental responsibility of the licensing authority is to directly fix maximum taxi fares. This includes charges for shared hire, though not for 'taxi-buses'. This process requires prior consultation with the taxi trade and public advertisement. Authorities are also obligated to review these fares regularly, at intervals not exceeding 18 months, ensuring that charges remain fair and reflective of operating costs. There is also provision for fixing fares for certain journeys extending beyond the licensing area, subject to agreement with the other authority involved. Importantly, the taxi trade has a right to appeal fare decisions to the Scottish Traffic Commissioner, providing a crucial check and balance in the system.

Conditions Attached to Licences

The detailed regulation of licensed taxis, private hire cars, and their drivers is primarily achieved through conditions attached to the grant of the licence. While local authorities have flexibility, the Secretary of State holds the power to prescribe certain core conditions that must be applied universally, and also to prohibit conditions that cannot be applied. This mechanism ensures a degree of uniformity across different areas while still allowing for local adaptations to meet specific circumstances.

In-Depth Look at Taxi and Private Hire Licences

Section 10 of the Act, as interpreted by the circular, mandates a licence for the operation of a vehicle as a taxi or private hire car. This is known as a "taxi licence" or "private hire car licence" respectively. "Operation" is broadly understood as "to make available for use as". Before granting or renewing a licence, the authority must be satisfied that the vehicle is suitable in type, size, and design for its purposes, is safe for use, and has adequate insurance as per the Road Traffic Act 1972.

As mentioned, the power to limit taxi licences is strictly tied to the absence of "significant unmet demand" for taxi services. What constitutes sufficient evidence for this is left to the licensing authorities' discretion, but any refusal on these grounds, or indeed any other, is open to appeal by the applicant to the sheriff.

Vehicle Inspection and Testing

Section 11 details the requirements for inspection and testing. This can be carried out by the licensing authority itself, or by authorised third parties such as the police or commercial garages. Inspections can occur at any reasonable time to assess vehicle fitness and the accuracy of taxi meters. If a vehicle or meter is found unsatisfactory, a notice can be issued requiring further inspection, and the licence may be suspended until the issues are rectified. This rigorous process underscores the emphasis on public safety and fair pricing.

Fees for Licences: The Cost Recovery Principle

Section 12 is explicit: licensing authorities are required to charge fees for applications and the grant of taxi and hire car licences. The purpose is strictly to recover the costs associated with operating the licensing system. This includes substantial costs related to testing and inspection. The circular highlights that these fees are separate from general licensing costs for other activities, to prevent any cross-subsidy between taxi/private hire matters and other council functions. Fees should reflect the costs incurred, meaning, for instance, a taxi driver's licence might cost more due to the inclusion of a 'knowledge test'. Authorities are expected to keep costs to a minimum and consult with local trade organisations before proposing any adjustments to fees.

Driver Licensing and Qualifications

Driving or having charge of a taxi or private hire car necessitates a specific licence, as per Section 13. The licensing authority has powers to ensure the driver's fitness and suitability. Interestingly, a taxi driver's licence automatically permits the holder to drive a private hire car, given that a taxi can perform all functions of a private hire car and more.

The Importance of Knowledge Tests

For taxi driver applicants, but not private hire car drivers, the licensing authority may require a knowledge test. This test typically assesses the applicant's relevant knowledge of the area, the layout of its roads, and other pertinent matters related to taxi operation. This ensures that taxi drivers, who often pick up passengers without prior booking, possess a thorough understanding of their operating area.

Medical Examinations

Licensing authorities also have the discretion to require applicants or existing licence holders to undergo a medical inspection. This is conducted by a medical practitioner nominated by the authority, though the driver's own doctor can be nominated. The costs of such examinations are borne by the licensing authority, though they can recover these through licence fees. These examinations are not expected to be automatic, given that applicants already hold ordinary driving licences, but rather triggered by specific concerns regarding a driver's medical fitness, such as age, accident history, or health record.

Vehicle Markings and Operations Outside Area

Signs on Vehicles Other Than Taxis

Section 14 makes it an offence to display signs on private hire cars that could mislead the public into believing the vehicle is available for hire as a taxi. This prevents confusion and ensures the clear distinction between the two services. However, legitimate advertising, such as the firm's name and telephone number, is permitted and generally considered to be in the public interest for easy identification.

Operating Taxis Outside the Licensing Area

Section 15 empowers a licensing authority to fix scales for taxi fares to named destinations or classes of destinations located in the area of another licensing authority, provided there is mutual consent. This addresses situations where frequent journeys occur from one area to major destinations like airports or railway terminals in another. Without such regulation, inconsistent fares and difficulties could arise. It's important that while fares can be fixed *to* these destinations, they cannot be fixed *from* them. Drivers retain the discretion to refuse journeys outside their licensed area, as they cannot be compelled to undertake them.

A specific exemption applies to 'taxi-buses' (taxis providing a defined local service under a special licence), to which sections 15, 17, and 18 (on fare fixing and appeals) do not apply. Additionally, when operating outside their licensing area for these agreed journeys, taxis and their drivers remain subject to the conditions imposed by their original licensing authority.

Journeys in England and Wales by Scottish-Licensed Vehicles

Section 16 addresses cross-border operations. Scottish-licensed taxis and private hire cars are permitted to pick up passengers in England, provided the request for hiring was received in the area where they are licensed under the Civic Government (Scotland) Act 1982. This means a pre-booked journey originating from Scotland to England is permissible, but they cannot "ply for hire" (seek custom without prior booking) in England. Reciprocal exemptions are provided for English-licensed vehicles picking up passengers in Scotland.

Taxi Fares: Detailed Provisions and Appeals

Sections 17 and 18 are central to fare regulation. The licensing authority has a duty to fix scales for fares and all other associated charges, such as for luggage or waiting times. These scales must be reviewed at least every 18 months. The review process mandates consultation with both the taxi trade and the public, taking into account all representations received. Once fixed, these fares represent the maximum that can be charged, though drivers are at liberty to negotiate a lower fare if they choose.

In determining fares, authorities are expected to consider the trade's costs, including capital costs of vehicles, maintenance, replacement, driver employment, and prevailing wages in related transport industries. The Secretary of State's view is that maintaining an adequate taxi service through fair returns to the trade serves the public interest better than artificially depressing fares.

The Appeal Process for Fares

Any taxi operator has the right to appeal fare scales or review outcomes to the Traffic Commissioner for the Scottish Traffic Area. Appeals must typically be lodged within 14 days of the licensing authority's decision. The Commissioner can decline an appeal if it's not representative of a "substantial proportion" (suggested as more than one-third) of operators, or if a previous appeal on the same matter was decided less than two years prior without material change in circumstances. An appeal suspends the entire fare scales in question until a decision is made. The Commissioner can either confirm the authority's decision or alter it as deemed fit, and their decision is final. The costs incurred by the Traffic Commissioner in hearing appeals are ultimately recovered through licence fees, meaning the trade itself covers these regulatory expenses.

Designation of Taxi Stances

Section 19 grants licensing authorities discretionary power to designate taxi stances (taxi ranks) and vary the number of vehicles permitted at each. This requires prior consultation with taxi operator representatives and the consent of landowners. Public notification of proposals and consideration of objections are also mandatory, alongside informing the Chief Constable.

Regulations by the Secretary of State

Section 20 empowers the Secretary of State to issue regulations concerning licensing conditions and vehicle types, sizes, and designs. This ensures a degree of national oversight and consistency. A key example cited is the Secretary of State's use of this power to explicitly prevent licensing authorities from banning the fitting or use of radios or other communication systems in private hire cars, reflecting a parliamentary view against such restrictions.

Regarding vehicle types, the Secretary of State's power to prescribe suitable types is primarily a reserve power. It's intended to be used only if there is evidence of local authorities imposing unnecessarily expensive vehicle requirements on the trade, leading to inflated costs for both operators and customers. The circular advocates for allowing a choice of general-purpose vehicles that can be adapted for taxi or private hire use, rather than mandating a single, specific vehicle type.

Offences and Exemptions: Ensuring Compliance

Section 21 outlines various offences related to the operation and driving of taxis and private hire cars, supplementing the general offence provisions in Section 7 of the Act. A key offence is operating or permitting the operation of an unlicensed vehicle or by an unlicensed driver in a licensed area. For taxis, this includes "plying for hire" (picking up passengers without prior booking in a public place). For private hire cars, it's picking up passengers where neither vehicle nor driver is licensed. Both the operator and the driver can be held liable.

However, there are crucial exemptions. It is not an offence for an unlicensed vehicle to enter an area merely to deliver passengers. Furthermore, licensed vehicles can pick up passengers in an area for which they are not licensed if the request for hire was received in their licensed area, or if they are engaged on a legitimate hire outside their area, or returning from one. This prevents situations where a long-distance pre-booked journey might inadvertently lead to an offence. But crucially, it is an offence to be hailed in the street outside one's licensed area or to deliberately station vehicles to respond to radio calls for hire in an unlicensed area.

Section 22 provides further specific exemptions for vehicles that might otherwise fall under the definitions, such as those used for 'to and from' journeys outside the area, weddings or funerals, or exclusive hires for periods of not less than 24 hours. These exemptions ensure that legitimate, non-taxi/private hire activities are not inadvertently caught by the licensing regime.

Understanding the Definitions: Taxi vs. Private Hire Car

Section 23 provides the foundational definitions:

Hire Car: A general class encompassing any motor vehicle with a driver, other than a public service vehicle (PSV), which is available for hire by the public for personal conveyance "with a view to profit." This excludes voluntary transport services and vehicles seating more than 8 passengers (which would be PSVs).

Taxi: A special case of a hire car that meets two additional conditions: it is engaged by arrangements made in a public place between the person to be conveyed and the driver (or their agent), and the journey begins "there and then" – meaning no advance booking. A taxi can therefore "ply for hire" and be flagged down. Importantly, once licensed as a taxi, it remains a taxi even when operating in a manner similar to a private hire car (e.g., responding to a radio booking), and is still subject to taxi regulations, particularly on fares.

Private Hire Car: Any "hire car" other than a taxi. Unlike a taxi, a private hire car cannot be hailed or pick up passengers in a public place without prior booking. However, it can pick up passengers in a public place if there is a prior arrangement or booking, such as a radio booking.

Comparative Overview: Taxi vs. Private Hire Car

To clarify the distinctions, here is a comparative table based on the circular's guidance:

Frequently Asked Questions (FAQs)

Q: Why do local councils have the option to adopt these provisions?
A: The legislation initially provided flexibility, allowing councils to decide based on local needs. However, the central government strongly encourages adoption in most populated areas to ensure uniform regulation and prevent unlicensed "pirate" operations that undermine legitimate services and create enforcement challenges.

Q: Can a private hire car legally pick me up if I hail it on the street?
A: No. A private hire car is legally required to operate on a prior booking. Picking up passengers who hail them on the street is an offence for both the driver and the operator, as it infringes on the exclusive right of taxis to "ply for hire."

Q: How are taxi fares determined, and can I dispute them?
A: Maximum taxi fares are fixed by the local licensing authority after consultation with the taxi trade and public. They are reviewed regularly (at least every 18 months). If you believe you've been overcharged, you should report it to the licensing authority. Taxi operators also have a right to appeal fare decisions to the Scottish Traffic Commissioner.

Q: Why are there limitations on the number of taxi licences but not private hire car licences?
A: The power to limit taxi licences is specifically tied to whether there is "significant unmet demand" for taxi services. This aims to ensure a viable taxi trade while preventing an oversupply in areas where demand is already met. Private hire cars operate on a pre-booked basis, and therefore, the market is generally considered to regulate itself through demand for bookings, making numerical limitations less relevant for their operational model.

Q: If I book a Scottish taxi to take me to England, does it remain regulated?
A: Yes. When a Scottish-licensed taxi or private hire car undertakes a journey to England (or Wales), it remains subject to the licensing conditions imposed by its Scottish licensing authority, provided the booking was received in its licensed area. However, it cannot then "ply for hire" or be hailed for new journeys within England; it must return to its licensed area or fulfil another pre-booked journey originating from its licensed area.

Conclusion: The Enduring Importance of Licensing Circulars

The taxi and private hire car licensing circular, as exemplified by the detailed guidance from the 1980s, underscores the enduring commitment to a robust regulatory framework for public transport in the UK. These documents provide the essential operational blueprint for local authorities, ensuring that the critical balance between public safety, consumer protection, and the viability of the taxi and private hire trade is maintained. From defining the nuanced differences between a taxi and a private hire car to establishing clear rules for fares, vehicle standards, and driver conduct, these circulars are instrumental in fostering a professional, reliable, and trustworthy transport service for communities across the nation. For anyone navigating the complexities of this industry, understanding the principles laid out in such circulars is not just beneficial, but essential for compliance and success.

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