Regulation - transport, storage and distribution sector

Taxi and private hire vehicle licensing

Both taxis and private hire vehicles (PHVs) must be licensed in the UK. Taxis are licensed to ply for hire - that is, they can pick up a passenger in the street or from a taxi rank. PHVs are not allowed to pick up passengers in the street or from a rank - they can only carry passengers who have pre-booked the journey. A journey is usually pre-booked by telephone or by visiting an operator's office in person. There are different licensing systems in London, England and Wales, Scotland and Northern Ireland.

Vehicle licensing in London

Transport for London (TfL) has powers to license taxi vehicles. The Public Carriage Office (PCO) is responsible for licensing taxis on behalf of TfL. A licence is only granted to a vehicle that meets the Metropolitan Conditions of Fitness. These conditions cover matters such as:

• safety and comfort
• the dimensions of the vehicle and of the passenger compartment
• the turning circle
• accessibility
• seat dimensions

All taxis must be fitted with a taximeter. They are also issued with two licence plates, one of which must be displayed on the rear of the vehicle and the other inside the passenger compartment. The vehicle must be licensed each year and when the owner changes. The licence will only be granted if the taxi passes a comprehensive mechanical test. This test replaces the MOT. Find out about taxi licensing on the TfL website.

The Private Hire Vehicles (London) Act 1998 provides for the licensing of PHVs in London. The Act has been implemented in stages: operator licensing began in 2001, driver licensing in 2003 and vehicle licensing in 2004. Licensed PHVs do not have to pay the central London congestion charge. Find out about PHV licensing on the TfL website.

Vehicle licensing in England and Wales outside London

The Town Police Clauses Act 1847 gave local authorities powers to license taxis. Under the terms of the Transport Act 1985, licensing authorities in England and Wales must now operate a licensing system for taxis. The licensing authority may specify:

• that only certain types of vehicle can be used
• the vehicle's colour and the signs it must display
• how old the vehicle can be
• how frequently the vehicle is tested
• that a taximeter is fitted
• wheelchair accessibility
• a minimum engine size

Licences must be renewed annually.

The Local Government (Miscellaneous Provisions) Act 1976 gave local authorities the power to license PHVs. Before granting a licence, the authority must be satisfied that the vehicle is:

• suitable, safe and comfortable
• in good mechanical condition
• insured

The vehicle must not be similar in appearance to a taxi so that members of the public are not confused. The vehicle may be tested up to three times a year and the licence must be renewed annually.

The position in Scotland

Under the terms of the Civic Government (Scotland) Act 1982, local authorities are given the power to license both taxis and PHVs. The licensing authority must not grant a licence unless it is satisfied that the vehicle is:

• suitable in type, size and design
• safe
• insured

PHVs are not required to install a meter, but if they do the licensing authority must test them regularly and the taxi fare tariff set by the authority must be used.

The position in Northern Ireland

In Northern Ireland there is a single licensing system for all "public service vehicles" (PSVs). This includes vehicles used for public and private hire as well as buses. Vehicles are licensed under the Road Traffic (Northern Ireland) Order 1981, the Public Service Vehicles Regulations (Northern Ireland) 1985 and the Public Service Vehicles (Condition of Fitness, Equipment and Use) Regulations (Northern Ireland) 1995. The Department of the Environment (DOE) is responsible for PSV licensing. There are two types of taxi licence for PSVs with eight or fewer passenger seats:

• Public hire taxi licence - this permits the vehicle to ply for hire or pick up from a taxi rank. Some of these are licensed for hire within Belfast and are called Belfast public hire taxis. Public hire taxis outside Belfast are called restricted public hire taxis.
• Private hire taxi licence - journeys in these vehicles must be pre-booked.

Before any licence is granted the vehicle must meet specified roadworthiness and suitability standards and must be insured. Licences are valid for one year and are only renewed if the vehicle passes an annual test. Belfast public hire taxis must be fitted with a meter. Find out more about PSV licensing in Northern Ireland on the Driver and Vehicle Licensing Northern Ireland (DVLNI) website.

You can also download a review of taxi regulation in Northern Ireland from the DOENI website (PDF) 192K.

The HMRC business economic note on taxis and private hire vehicles contains a comprehensive overview of taxi and private hire operation in the UK. Read the full details from the HMRC regarding Taxis and Private Hire Cars.