What is a small passenger service?

Anyone carrying passengers for hire or reward, in a vehicle designed to carry twelve or fewer people (including the driver) is operating a passenger service. There is a list of special exceptions to this (such as car pooling).

Download the list of exceptions from the NZ Transport Agency's website(external link)

What’s the difference between a private hire service and a taxi service?

Private hire services are often run by sole operators that provide passenger services for a range of transport purposes. Examples include, wedding cars, and limousines. Private hire services must be "booked in advance", cannot use a taxi meter or toplight. A set fare or hourly rate must be agreed before passengers are carried.

Taxis must have a taxi toplight, a meter and, in city centres, be fitted with an in-vehicle camera system. Taxis must be operated as part of an Approved Taxi Organisation (ATO). The ATO must, in main city centres, provide a 24/7 service, operate branded vehicles, and charge customers a fare based on a meter in the taxi and a fare schedule registered with the Transport Agency. All drivers of taxi and private hire vehicles much have a current 'P' endorsement.

Read more information on the requirements for a company to establish itself as an Approved Taxi Organisation (ATO), and for holding a Passenger Service Licence (PSL) on the NZ Transport Agency's website(external link)

What is the current system and why has it been set up the way it has?

The current system for regulating small passenger service vehicles was put in place in 1989 and updated in 2007. The system is designed to ensure clear delineations between taxis and other services, such as private hire or shuttles. This reflected the additional requirements a taxi has to operate under - including belonging to an ATO.

These requirements were put in place to provide added protection to customers who often engage a taxi by hailing it on the street, from a taxi rank, airport or outside a bar or nightclub. The requirements imposed on a taxi mean it is easier for a customer to first identify it as a taxi and, second, be able to recall details that would identify it should the need arise - for instance the cab company’s name and the cab number.

These requirements added compliance costs. Making a clear distinction for taxis created a level playing field, so only taxis completed for fares in the areas around airports and city entertainment areas. This system was put in place when the only means for engaging a hire was by hail or telephone (through a dispatcher linking to available vehicles). It was all but impossible for any service other than taxis to compete for these fares.

Why is the current system being reviewed?

The proliferation of mobile phones and the development and use of smartphone apps has changed the small passenger service industry. It is now possible for private hire operations to provide a level of coverage and service that previously only taxis could. This has put the current system under stress. Taxis claim smartphone apps mean private hire services are completing in their traditional domain without all the attendant compliance cost they must comply with. On the other hand, private hire services using smart phone apps are saying they are employing emergent technology to meet customer expectations and can do so at a far more competitive rate.

A review is therefore needed. It allows Government to consider the current framework and then decide whether it should be continued with, or requires amendment.             

What checks are private hire drivers required to go through?

Our primary concern is the safety and security of the travelling public. Drivers of private hire vehicles are required to be appropriately licensed. This means they hold passenger (P) endorsements, and have a NZ Transport Agency-issued driver identification card. To obtain a licence they have met the ‘fit and proper person’ person standard which includes Police checks. These are the same requirements as a taxi driver.

Read further information on the requirements for obtaining a passenger endorsement on the NZ Transport Agency's website(external link)

How can the NZ Transport Agency be sure private hire drivers are compliant with regards to the hours they drive and that all drivers have a P Endorsement?

In addition to having to hold passenger (P) endorsements on their driver licenses, private hire drivers are subject to driving hour limits and are required to keep logbooks that record their driving hours. The operators of private hire services are also required to hold a qualification that shows they are aware of the various legal requirements that apply to these services.

Who carries out the regular checks on drivers to ensure they are fit to hold a passenger endorsement?

'Fit and proper person’ checks are carried out by the NZ Police and the NZ Transport Agency. Anyone who applies for or renews a Passenger (P) endorsement to drive a small passenger service vehicle like a taxi or a private hire vehicle must undergo a ‘fit and proper person check‘, and the check is repeated every 12 months to ensure that the person remains fit and proper. A fit and proper person check looks at things like traffic offending, previous complaints, and serious behavioural issues. It always includes a Police check to check for criminal offending.

Read more information in the ‘About the fit and proper person check’ section of the P endorsement factsheet on the NZ Transport Agency's website(external link)

If you would like to know more about the SPSV review you can contact the project team at spsvreview@transport.govt.nz.