Glasgow’s Private Hire Cap Sparks Debate Over Market Demand

Uber has expressed its support for removing the cap on private hire vehicle (PHV) licences in Glasgow, arguing that there is enough trade to accommodate more drivers. The city council is currently consulting on whether to lift the overprovision cap, which limits the number of PHVs to 3,450 and taxis to 1,420. The debate has sparked contrasting views within the industry, with Uber advocating for deregulation while some private hire associations oppose the move, citing concerns about driver earnings and market saturation. A recent report has also examined Uber’s challenge to Glasgow’s private hire cap, highlighting the ongoing controversy.

Uber, which entered the Glasgow market in 2015, claims that demand for its services remains unmet, with thousands of ride requests going unfulfilled. Speaking to the Glasgow Times, Matt Freckelton, Uber’s Head of Cities in the UK, emphasized that similar caps in other cities have been removed due to their restrictive impact.

Matt Freckelton stated:

"We think there's enough business to go around. Glasgow is the only city that's got a cap. Other cities have looked into it, the UK Competition and Markets Authority have found caps to be unnecessary, as have the UK Department of Transport."

The company also highlighted that a cap on licences could negatively impact Glasgow’s economy, particularly its nightlife and tourism sector. Reports indicate that businesses in the city centre have raised concerns about the limited availability of PHVs, arguing that transportation challenges discourage people from coming into town, especially at night.

However, the Scottish Private Hire Association (SPHA) disagrees with Uber’s stance, arguing that there is already an oversupply of drivers in Glasgow. The association has warned that removing the cap could lead to lower earnings for existing drivers and create an unstable market.

The issue has also been linked to changing consumer preferences. Uber has noted that younger passengers and international travelers often favor its service over traditional taxis due to convenience and familiarity. Freckelton pointed out that Glasgow’s student population and tourism industry contribute significantly to Uber’s demand.

Matt Freckelton stated:

"Glasgow has an airport and has a lot of tourists visiting. Uber, in my opinion, really comes into its own when you're travelling to a foreign country and you may be not comfortable getting into a vehicle that you don't know, don't know the local language, you don't know the currency, but you can just load up the Uber app, say exactly where you want to go in your own native language and then someone comes to pick you up."

He further suggested that the generational shift in transport habits plays a role in Uber’s success.

Matt Freckelton stated:

"I think there's a general shifting demographic change in terms of how people want to access a private hire product with a much younger generation coming in. They don't say let's get a taxi, they'll say let's get an Uber, and then there's a large student population in Glasgow. And that's just what they're used to, using our product, maybe over someone else's product."

One of the key concerns in this debate is driver availability during peak hours. While Uber acknowledges that it cannot require drivers to work specific shifts, it employs incentive programs to encourage drivers to operate during periods of high demand.

Matt Freckelton stated:

"The relationship we have with our drivers is they are classed as workers under employment law, so they get guaranteed national living wage, pension, and holiday pay. They're not direct employees, so we can't tell them you've got to do a shift for example 9am in the morning to 12 noon."

He explained that Uber’s internal marketplace team uses incentives to balance demand and supply.

Matt Freckelton stated:

"If there is high demand but low supply, we can run an incentive for those drivers to come out where they can then earn more money. And we've been doing some of that behind the scenes for the last year, but every driver is different. Some drivers are working full-time, some of them are working part-time, might be caring for a loved one and they happen to go out and do a couple of hours during the day."

The future of Glasgow’s PHV cap remains uncertain as the council continues to gather input from stakeholders. The ongoing consultation will determine whether the restriction remains in place or if the market will be opened to additional drivers, potentially reshaping the city’s private hire industry.