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IN FOCUS |
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by Matthew W. Daus, Esq. |
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TRANSPORTATION TECHNOLOGY ISSUES IN LONDON: MANDATING CREDIT CARDS, REGULATING SMARTPHONES & OTHER REFORMS
The last time I visited the Holy Grail of taxicab system in the world, London, I discussed the many issues the city has in common with New York City (NYC) and the marble of the famous Knowledge examination for black cab drivers. Little did I know that, at the same time, Uber was casting its net to take London by storm, taking advantage of the lack of clarity of some Transport for London (TfL) rules and regulations.
I have provided advice to both TfL and the London Assembly on best practices and transportation technology issues over the past few years, and things are now starting to move and change in London.
Back in 2012, Uber introduced its service in London arming its drivers with smartphones to the dismay of black cab drivers who spent over 4 years studying the “Knowledge” to drive a cab. UBER substituted smartphones for taximeters. Initially, TfL noted that “after careful consideration of the factual and legal position of the use of smartphones to receive fare information, [that they] were not unlawful for the purpose of the private hire legislation”.[1]
However, the industry fought back with a strike bringing central London to a standstill. This action played right into the hands of Uber, which saw a 400% spike in downloads to its app. TfL yielded to the appropriate request by the industry, and decided to pursue the matter through the courts. TfL requested Her Majesty’s High Court of Justice in England to, once and for all, declare the correct interpretation of TfL’s rules regarding the use of smartphone apps in Uber vehicles, and to decide if such apps are the equivalent of a taximeter.
The industry trade group, the Licensed Taxi Drivers Association (LTDA), brought a private criminal proceeding to the magistrate’s court (lower first instance courts) against a small number of Uber drivers, alleging breach of the taximeter prohibition by Uber drivers as a result of their use of smartphones in their vehicles to determine fares. As such, the LTDA derailed the TfL’s application for determination by the High Court as it lacks jurisdiction to consider applications for determinations where there is ongoing prosecution in the criminal courts for the same legal issue.
The LTDA was unwilling to withdraw its proceeding fearing if TfL later failed to take action, or if the High Court failed to hear the application, it would be “time bared” and it will be unable to bring the cases back to court. After reviewing the allegation by the LTDA, the magistrate court concluded that the matter should be considered by the High Court and adjourned the case indefinitely which means the case remains outstanding, and precludes TfL from seeking declaration from the High Court.
Following the magistrate court’s adjournment, the TfL requested the LTDA to withdraw its case, and as it stands, the LTDA is yet to respond to this request which is delaying the process and allowing Uber to expand its service unabated.
At its request, I returned back to London around the time of the strike and legal wrangling to testify before the London Assembly Transport Committee, and discussed various issues that could help London maintain its much celebrated taxi service standard.
I was invited by Caroline Pidgeon MBE, the Chairwoman of the Transport Committee, to address the committee on issues, among other things:
- the impact of strikes by taxi drivers and the controversy surrounding TfL’s management of the trade groups;
- potential benefits and pitfalls of new transportation technologies;
- supply and demand issues of availability and accessibility of taxi and private hire services across different parts of London and at different times of day; and
- areas of improvement based on the best regulatory practices of other jurisdictions;
- integrating taxi and private hire services with other transport options (e.g. Tube and bus);
- the role of pedicabs in transport systems; and
- the different payment options for taxi and private hire services including lessons to learn from New York City’s installation of credit card readers.
The webcast of the hearing can be accessed here http://bit.ly/1eihgbm.[2] The committee was tasked to prepare a report and to publish a recommendation to the Mayor and TfL to improve the service quality of both taxis and private hire services in London, to further improve its much acclaimed “gold standard” service.
The committee members had raised many legitimate concerns about the advent of transportation technology companies and their impact on the London black cab industry. I indicated to the committee that the London black cab service has been the gold standard for many years, and in order to maintain this standard, now is a good time to take a fresh look at things.
The rules that govern the industry date back almost 400 years, and I applauded the committee and the London Assembly’s efforts to take a fresh look at the system
holistically, and to revamp areas of the law that are outdated to make sure that the industry does not slip and fall behind the times.
I also reiterated to the committee members that London should mandate credit card processing machines in all black cabs. For a world class city, with over 16 million visitors every year, there should be no regulatory tolerance for driver resistance to processing passenger credit cards to pay fares.
When I was the Commissioner/Chair of the New York City Taxi and Limousine Commission, I faced the same resistance before we prevailed and mandated all taxicabs to be equipped with credit card processing units. I told the committee
members that they should mandate credit cards in every black cab to maintain the quality and service standards, and to increase passenger satisfaction. Once this is done, and the drivers start increasing their tips and earnings, resistance should fade like it did in NYC.
While I was in London I had a chance to meet with the media to discuss various issues I raised at the committee hearing. The full interview can be accessed here http://bit.ly/1rTTwSV.[3]
In December 2014, the Transport Committee published its report on the future of taxi and private hire industry taking into account some of the issues and guidance I provided on my testimony before the committee. The full report can be accessed here http://bit.ly/1E7yS4s.[4]
The report called on the Mayor of London and TfL to maintain the existing distinction between black cabs and the private hire industry in order to meet the differing passenger service requirements. I emphasized the need for a clear strategy that will ensure the survival and prosperity of both services while guaranteeing safety, availability, and accessibility of service to passengers.
In regard to new transportation technology entrants, the report, while acknowledging their immense potential to increase service quality and availability, highlighted that they may also cause unbalanced blurring of the lines between taxis and private hire industry which ultimately may reduce passenger choice.
Some of the specific recommendations include;
- the Mayor of London to publish a long term strategy that clearly sets out the actions that will improve passenger and driver safety, guaranteeing a sufficient number of high quality drivers and vehicles across the city, and ensuring that all services meet the highest possible standards for accessibility;
- TfL to develop a database that links drivers to vehicle and operator information with a tool that will enable passengers to check the status of their driver, vehicle or operator;
- TfL should produce a signage strategy for the licensed taxi and private hire industries, including plans to commence a pilot program for new specialized license plates for black cabs and private hire vehicles; and
- the Mayor and TfL to introduce options to incentivize the uptake of cashless payment options for both the taxi and private hire industries.
It remains to be seen how London will move forward on transportation technology regulatory issues. While movement may be tied up in the courts right now, the London Assembly is determined to move forward. At the same time, technology disruptors are not waiting for the governmental authorities and are seeking to transform the system and move forward on their own.
I believe that the Mayor and the Assembly will reach a middle ground and that we will soon be looking at many improvements to the system to make it stay at the top of the regulatory world. The gold of the London regulatory system may have some fingerprints and smudges on it right now, but I am confident that the ongoing conflicts will cause its gold to become shiny and brilliant once again.