Guidance for London Private Hire Vehicle Operators: Contracts with Passengers
Introduction Following the Divisional Court’s judgment1 given on 6 December 2021, in order to operate lawfully, under the Private Hire Vehicles (London) Act 1998 (the 1998 Act) a licensed operator who accepts a booking from a passenger is required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking.
It is contrary to London private hire vehicle (PHV) operators’ statutory role, and against the interests of public safety, for London PHV operators to transfer responsibility for the provision of private hire services onto others, such as drivers. In order to comply with the 1998 Act, London PHV operators must therefore contract directly with passengers and must do so on their own behalf as opposed to on behalf of someone else (e.g. a driver).
Contracting with passengers as “principal” means that operators must be legally responsible for the provision of the journey (or transportation services). Prescribed licence condition We have prescribed a licence condition to ensure all London PHV operators are aware of their obligation to enter into a contract with the passenger as principal, where a passenger makes a booking, and their responsibilities under that contractual relationship. Regulation 9(14) of the Private Hire Vehicles (London) (Operators’ Licences) Regulations 2000 (the 2000 Regulations) provides that: “The operator shall enter into a contractual obligation as principal with the person making the private hire booking to provide the journey which is the subject of the and any booking such contractual obligation must be consistent with the 1998 Act and these Regulations.”
Purpose of this guidance
We recognise that compliance with the obligation as confirmed in Regulation 9(14) of the 2000 Regulations (referred to in the rest of this note as “the obligation”) may require changes to how operators organise themselves and do business. The purpose of this guidance is to assist operators with their consideration of whether change(s) are required to comply with the obligation and what those change(s) might be. However, the guidance has no legal effect in or of itself and it is a matter for individual operators to make their own decisions as to what they need to do to ensure compliance with the obligation. We also recognise that making changes to the contractual arrangements between operators and their passengers and drivers.
PHV Operator( Londoncruise-transfers.com) with written contracts
For an operator that have written contracts, there are no fixed rules concerning what those contracts should say in order to be compliant, but they must be consistent with the 1998 Act and the 2000 Regulations, and in particular the obligation to provide the journey that is the subject of a booking. We would be likely to consider an operator to be compliant with the obligation if the written contract and the way in which the operator provides its services:
a) makes it clear that the London PHV operator is responsible for both accepting the booking as well as the provision of the journey (this is referred to by some operators and referred to in the rest of this guidance as the “transportation services”);
b) states that a contract is created between the operator and the passenger for the booking as well as the provision of the transportation services.
c) refers to fares for the journey being collected by the operator or collected by the driver on behalf of the operator, including arrangements where the driver acts as the agent for the operator in collecting fares;
d) makes it clear that only the operator can cancel a booking with a passenger, (although the driver may reject an offer from the operator to carry out a particular journey); and
e) makes it clear that liability in relation to the transportation services belongs to the operator.