Traffic commissioners report for issue on the NLCA web site

Bill Bowling
National Limousines and Chauffer Association
Letter sent by email with paper copy in post

10 March 2010

Dear Mr Bowling

You wrote to me as lead traffic commissioner on the subject of limousines with some suggestions on the interpretation of the law relating to small PSVs. I promised to respond to you once traffic commissioners had completed their review of the law relating to the licensing of limousines and novelty vehicles. I have numbered paragraphs in this letter for ease of reference.

1. In this letter a small vehicle or small limousine is a vehicle adapted to carry eight or fewer passengers. A large vehicle or large limousine is a vehicle adapted to carry nine or more passengers.

2. This has been an interesting exercise and of course it is important that traffic commissioners do not make laws rather that is for Parliament. It is the role of traffic commissioners to try and interpret the law correctly.

3. Traffic commissioners have been assisted by DfT providing its view of the law. It is appreciated that ultimately only the courts can definitively interpret the law.

4. I appreciate that your view has been that you would prefer traffic commissioners to license small vehicles as you believe that we are more consistent than local authorities. I acknowledge that published guidance has led to the current position whereby many operators have obtained PSV licences in good faith in the absence of an agreed position. Traffic commissioners have now taken the opportunity to come to a collective, clear and firm view that this is no longer appropriate. Traffic commissioners value limousine operations as a legitimate trade and this review of the law is not about making life difficult for the good operator and forcing them to operate without licences; rather, it is about applying the law correctly and ensuring that where an operation is really a private hire arrangement, it is licensed as such. As you can see from the views expressed below, we believe that small vehicles can in some circumstances be licensed as PSVs; however most of the limousine operations involving small limousines are likely to fall under the category of private hire and will not be a genuine PSV. Where there is a suspicion that this is so, it is likely that a new application will be heard at public inquiry to consider whether the requirements of Section 14 (3) of the Public Passenger Vehicles Act 1981 are being capable of being complied with. One of the requirements under this section is that the traffic commissioner must be satisfied that there will be adequate arrangements for securing compliance with the law relating to the driving and operation of the vehicles. It will be for an applicant to satisfy a traffic commissioner on the balance of probabilities that the requirements are met.

5. I enclose below a series of questions and answers which set out what traffic commissioners believe represents the law. I have also enclosed extracts from a recent government circular to local authorities setting out that they should not decline to license 1-8 passenger seat limousines as has happened in the past. I hope that you and your members will find the circular helpful. As you will recall I am of the view that if a local authority declines to license any limousine as a matter of principle, the remedy is to appeal to the local magistrates court without delay. Separate rules apply in Scotland where appeals lie to the Sheriff Court.

When can a small limousine legitimately be licensed as a PSV?

6. It is often suggested that, wherever separate fares are being paid by passengers, the vehicle can legitimately be licensed as a PSV rather than a PHV.

7. This is not the case: further conditions also need to be met in order for the vehicle to qualify as a PSV (rather than a PHV). The effect of the legislation is that, where a small vehicle is made available for exclusive hire to an individual or group, it falls to be licensed as a PHV.

8. A small vehicle will normally qualify as a PSV only if separate fares are paid and one of the following two conditions is met.

CONDITION 1: The service must have been advertised to the public, so as to create a genuine opportunity for members of the public to be carried on the particular journey in question. i.e. the journey is not an exclusive hiring for an individual or group. Advertisement at a place of worship, a place of work, a club or other voluntary association for the information of people present at those places, or in periodicals circulated wholly or mainly among such persons, does not count as advertisement to the general public.

CONDITION 2: The service was not advertised as per condition 1, but the arrangements for (i) bringing together the passengers, and (ii) the payment of separate fares, were initiated by the driver, operator or owner of the vehicle, or some other intermediary who is paid for doing so but not by the passengers themselves, or any other party. This condition might be met where the transport provider has identified a number of people each wanting to make the same journey, and has suggested to them that they might want to travel together and split the cost.

9. If neither condition is met, the vehicle is very unlikely to qualify as a PSV in relation to the journey in question. It would therefore need to be licensed as a PHV.

I have a large limousine which I hire out on a (words illegible) basis. Do I need a PSV operator's licence?

10. It depends. If the hirer drives the vehicle him/herself a (words illegible) they would under a typical car rental agreement – then the hire company will not be operating the vehicle. Similarly if the hire agreement allows the hirer to employ the services of a chauffeur selected by the hirer, entirely independently of the hire company, then the hire company is unlikely to require an operator's licence.

11. However, hire arrangements are sometimes used to try to circumvent the operator licensing requirements. In particular, hire companies sometimes require or encourage the hirer to employ the services of a particular driver (or company who provides drivers), or perhaps offers a limited selection of drivers who may be used. In such cases, a connection exists between the hire company and the driver – it might be a written contract, or it might be less formal. But either way, the Government considers that any such connection will normally be sufficient to require the hire company to hold a PSV operatorator’s licence. The courts have reached a similar conclusion. VOSA will take decisive enforcement action where a (words illegible) is being used as a ploy to try to avoid the regulatory system.

12. When dealing with dry hiring it is important to ask the correct questions, for example:

What is the relationship between the hire company and the organisation or individual selecting the driver?
Is there a premium or deposit to be paid for choosing one's own driver, or for driving it oneself? There will be a need for the authority of a PCV licence to drive these vehicles and any rental of the vehicle should reflect the insurance cost. If there are attempts to tie in a premium for self drive then this will be an important indicator that it is not a genuine self drive hire arrangement.

Is there is a premium or deposit to be paid for choosing one's own driver, if so what is the sum? The higher the figure the less likely it will be a genuine dry hire.

If a system of premiums or deposits is required, on how many occasions is this taken up? Additionally, what is the proportion of occasions when this is taken up? Note that the lower the number of occasions where any premium or deposit is taken up, the less the likelihood of this being a genuine dry hiring arrangement.
Are there any other restrictions on the driver? E.g. age restrictions or limiting the driving to those with previous experience of driving limousines (as opposed to those who have passed the relevant PCV test). Additional restrictions are often an indication that it is not a genuine dry hire arrangement.

Do routes and timetables of a limousine service need to be registered with the traffic commissioners?

13. Not normally, no. Most limousine services will be exempt for one of the following reasons:

because they are excursions or tours which do not run at least once a week for a period of at least six consecutive weeks; or in the case of smaller limousines, because they operate as PHVs (not PSVs);

Is the 15-mile rule relevant to my limousine operation?

14. Not usually, no. The 15-mile rule is relevant only when deciding whether a service is a local service, and therefore whether details of that service need to be registered with the traffic commissioners. But a limousine service will generally be exempt from the requirement to be registered with the traffic commissioners, for one or more of the reasons outlined in the previous question.

I am operating an excursion or tour using a small vehicle. Doesn’t that automatically make it a PSV?

15. No. A vehicle used to operate an Excursion or tours qualifies as a PSV only if one of the two conditions described in the first question is met.

16. The question of Excursions or tours is relevant only when a service is being operated as a PSV (not a PHV) and the operator is deciding whether details of the service need to be registered with the traffic commissioners. Routes and timetables of Excursions or tours do not need to be registered unless they operate at least once a week for a period of at least 6 consecutive weeks.

The DfT has issued new guidance to local authorities on the licensing of stretched limousines and novelty vehicles, what does it say?

17. The extracts below are from the DfT’s Taxi and Private Hire Licensing: Best Practice Guidance, issued March 2010. In the DfT circular issued they are numbered 40-44.

40. Local licensing authorities are sometimes asked to license stretched limousines as PHVs. It is suggested that local authorities should approach such requests on the basis that these vehicles – where they have fewer than nine passenger seats - have a legitimate role to play in the private hire trade, meeting a public demand. Indeed, the Department’s view is that it is not a legitimate course of action for licensing authorities to adopt policies that exclude limousines as a matter of principle and that any authorities which do adopt such practices are leaving themselves open to legal challenge. A policy of excluding limousines creates an unacceptable risk to the travelling public, as it would inevitably lead to higher levels of unlawful operation. Public safety considerations are best supported by policies that allow respectable, safe operators to obtain licences on the same basis as other private hire vehicle operators. The Department has now issued guidance on the licensing arrangements for stretched limousines. This can be accessed on the Department's web-site at http://www.dft.gov.uk/pgr/regional/taxis/stretchlimousines.pdf.

41. The limousine guidance makes it clear that most operations are likely to fall within the PHV licensing category and not into the small bus category. VOSA will be advising limousine owners that if they intend to provide a private hire service then they should go to the local authority for PHV licences. The Department would expect licensing authorities to assess applications on their merits; and, as necessary, to be proactive in ascertaining whether any limousine operators might already be providing an unlicensed service within their district.

42. Imported stretched limousines were historically checked for compliance with regulations under the Single Vehicle Approval (SVA) inspection regime before they were registered. This is now the Individual Vehicle Approval (IVA) scheme. The IVA test verifies that the converted vehicle is built to certain safety and environmental standards. A licensing authority might wish to confirm that an imported vehicle was indeed tested by VOSA for IVA before being registered and licensed (taxed) by DVLA. This can be done either by checking the V5C (Registration Certificate) of the vehicle, which may refer to IVA under the "Special Note" section; or by writing to VOSA, Ellipse, Padley Road, Swansea, SA1 8AN, including details of the vehicle's make and model, registration number and VIN number.

43. Stretched limousines which clearly have more than 8 passenger seats should not of course be licensed as PHVs because they are outside the licensing regime for PHVs. However, under some circumstances the SVA regime accepted vehicles with space for more than 8 passengers, particularly where the precise number of passenger seats was hard to determine. In these circumstances, if the vehicle had obtained an SVA certificate, the authority should consider the case on its merits in deciding whether to license the vehicle under the strict condition that the vehicle will not be used to carry more than 8 passengers, bearing in mind that refusal may encourage illegal private hire operation.

44. Many councils are concerned that the size of limousines prevents them being tested in conventional MoT garages. If there is not a suitable MoT testing station in the area then it would be possible to test the vehicle at the local VOSA test stations. The local enforcement office may be able to advise (contact details on http://www.vosa.gov.uk).

Existing holders of restricted PSV licences

18. I appreciate that you might feel that some existing holders of restricted PSV licences do not fall into the category of PSV if one applies the criteria set out at paragraph 8 above. I also appreciate that this may cause uncertainty amongst existing licence holders. The view of traffic commissioners is that a degree of leeway ought to be given for those who have acted in good faith but have the incorrect licence. In the fullness of time those who have applied for and obtained PSV licences in good faith, but are not genuine PSV operations, ought to apply to their local authority for a PHL. I will be writing in due course to current holders of restricted PSV licences to set out more detail the expectations of traffic commissioners in this regard. Ultimately each case must always be dealt with on its merits and the operator will know whether using the tests described at paragraph 8 above, they genuinely fall within the category of a PSV operation.

Yours sincerely

NICK JONES

Traffic Commissioner for the Welsh Traffic Area
Traffic Commissioner for the West Midland Traffic Area

(note from webmaster: where you see a reference: (words illegible) - we have tried to interprit what actually should appear here but Bill nor I can work it out)

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IMMEDIATE NLCA PRESS RELEASE

Ladies and Gentlemen,

Below is a statement on behalf of the NLCA concerning the licensing of limousines, I am sure that you will be concerned over the contents just as all sensible operators are. After years of striving to get every limousine on the roads into either PSV or PHV licensing, the industry has been dealt a blow which, especially in the current hard economic times, could see the demise of many an operator. For years we have campaigned for more, better and specific legislation, and after being consistently refused and told to work within the existing licensing framework, we find that the goal posts have not only moved, but may have been taken off the pitch.

I trust that you will use our statement to highlight the current and future problems that operators who want to comply with the law may face.

Yours Sincerely

Bill Bowling
Legislation Officer
National Limousine and Chauffeur Association

3rd March 2010

I have been informed yesterday that, as a result of a meeting of the Traffic Commissioners earlier this week, that they have decided that “after clarification from the DfT” they will no longer issue PSV licences for the operation of small vehicles. The result is that many operators, who have spent time, money and effort in attempting to become licensed, are now being left out in the cold, unable to gain either PSV or PHV status. This on its own is disastrous, but what makes it even more damning is the statement that the Traffic Commissioners will be readdressing those already licensed, and quote “with a period of grace, may have their PSV operators status rescinded”. The poorest form of law is retrospective legislation, and this would rank as abysmal. I have not as yet received the courtesy of any formal contact from the Traffic Commissioners regarding their statement of intent, despite their own mission statement that “we are committed to being a good partner”. As both a stakeholder and the legislation officer for the National Trade Association for limousines, I have not been involved with any of the considerations or decision making process.

After years of working with VOSA, the Traffic Commissioners and the DfT operators, and in particular, the NLCA feels that the Traffic Commissioners have abdicated their responsibilities on the lines that it is easier to refuse than to sort it out. After a joint stance between VOSA and the NLCA to promote the licensing of limousines, and the past support of the Traffic Commissioners, I am extremely disappointed to find that, presumably at the behest of the lead Traffic Commissioner on limousines Mr Nick Jones, that the whole panel of Traffic Commissioners have withdrawn their support.

Only a year ago I listened to Mr Jones congratulate an operator of eight passenger limousines on gaining his license and welcoming him to the fold of legal operators. The NLCA does not accept the Traffic Commissioners statements, and intends to challenge the decision at every license application. What was the point in creating “small vehicle rules” “limousine and novelty vehicle rules” and to keep accepting applications and payments just to do a complete about face on policy? Even now the initial press statement just released on the matter is unclear; it does not say if all small vehicles are included in this ruling, or whether or not it is purely limousines. Questions about the great number of operators who have built businesses based on the previous grant of PSV operators licenses remain, what can they do when their licenses are due for renewal?

I feel that the whole of the limousine and chauffeur industry has been seriously let down by the DfT and the Traffic Commissioners, promises made in the past by the senior Traffic Commissioner Mr Philip Brown to work with the industry turn out to be hollow. Years of striving to achieve a good working relationship with the Traffic Commissioners appears wasted.

The DfT has compounded the problem by lack of clear and definite guidance, wishy washy statements to local licensing authorities, coupled with the vagaries of the Local government miscellaneous provisions act (1976) means that we still have over one hundred of the four hundred and four local licensing authorities who do not license limousines, and around another hundred who pay lip service to licensing limousines. For a local authority to state that they will license limousines and then add “but no left hand drive vehicles” “no side facing seats” “no non type approved vehicles” and so on is a smoke screen to state that they comply when they never had any intent to do so. I currently have around thirty pages of restriction from different local licensing authorities, including the most ridiculous one, which emanated from the DfT, stating that “No American stretched limousine shall look like, or purport to be a London style black cab”. With statements of this ilk how can operators view either the DfT or the local licensing authorities with any serious form of respect?

The local authority licensing rules are inadequate in its maintenance regime. With a maximum of one MOT test and two further inspections per annum, this means that limousines may go from seventeen to fifty two weeks between inspections, again another case of tick all the boxes even if the wheels fall off the wagon. The NLCA has always maintained that the maximum time interval between inspections should be ten weeks, and under the PSV route this has become the accepted norm. This should be addressed by the DfT as a serious omission when considering licensing.

Imagine the scenario when all the small limousine operators, both existing and proposed, have their PSV operators licenses revoked, add to this the 50% of local licensing authorities who do not or will not realistically license limousines. The industry will revert to the dark ages of operators running unlicensed. With no realistic or a sensible and consistent regime, anarchy will rule. Drug dealers, money launderers, and the like will flourish; good honest businesses will either die or turn illegal to exist. VOSA with its limitations on finance and manpower will not be able to adequately police the law. The police will continue to have very little understanding of the law governing limousines, and uninsured and unlicensed operators will once again become the norm.

After years of trying to convince operators that the DfT, VOSA, Traffic Commissioners the police and the NLCA are all on the same side, I now find it increasingly difficult to support this argument, and now feel that we are effectively on opposing sides with less common ground than ever in the last thirty years.

I have implored the DfT and Traffic Commissioners to look at the latest decision again, consider the ramifications, involve the NLCA at the decision making stage, and finally commit to a positive programme of licensing on a national basis (under the administration of the Traffic Commissioners) for all limousines both up to and over eight passenger seats. The problem is surmountable with the will of government and the commitment of all involved.

If any operator of a limousine, novelty vehicle, business car, minibus or people carrier of less than nine seats capacity currently works under a PSV “O” license, then they are at serious risk of losing their livelihood. The NLCA needs every operator who may be affected to join in the campaign and support what will inevitably be a long, arduous and expensive series of challenges through the courts.

The NLCA will be calling an extraordinary meeting in the near future to establish the route forward, every operator in the UK is invited to attend and all offers of support in any form will be gratefully received.

Bill Bowling
Legislation Officer
National Limousine and Chauffeur Association