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Licences for Transporting Load

The transportation of passengers by a commercial enterprise generally requires licensing and insurance. 

There are two distinctions that the law makes concerning the carriage of passengers; first whether the carriage is done for profit, second whether the business is the carriage of passengers or whether it is a merely a single aspect of a larger business.

The carriage of passengers for profit does not mean that there is a specific extra charge for the transportation. If the cost is included within a fee paid for the main service provided then it is still classed as transportation for profit. The law does make provision for a small fee to cover running costs and general wear, however - this was intended to protect car sharers and should not be abused.

Only very occasional transport in a vehicle of less than eight passengers will not require an extra licence. For any other kind of transportation that is integral to a business, if it is a regular service or done for a price, a licence is mandatory.

Types of licences

PSV licences

If the transportation is for a specific purpose and persons, and does not pick up passengers to go wherever they wish, then the type of licence required is a Public Service Vehicle (PSV) licence. A PSV licence applies to the business running the transport and comes in two forms, a restricted or a standard licence.

A restricted licence applies to businesses running no more than two vehicles that carry less than sixteen passengers. The requirements that need to be met in order to qualify for a restricted PSV licence are:

  • enough finances to continue the running of the business (either three months bank statements that can attest to this or an overdraft)
  • an owner of good repute with no convictions
  • provisions for the maintenance of the vehicles 
  • rules for drivers which are going to be abided by

If a vehicle has between nine and sixteen passengers then it requires a Certificate of Initial Fitness (COIF), which establishes that all the vehicle is fitted properly and safe to carry that number of passengers.

There is a £141 fee for an application for a restricted PSV and then a further £141 for a five year licence, or alternatively the licence, once qualified for, can be paid yearly at £28 per year.

A standard PSV licence is needed if the business has at least three vehicles or has a vehicle that carries more than sixteen passengers. The rules that apply to the restricted licence also apply to the standard licence but with a few additions, the need to hold a certificate of professional competence is the major one. A COIF certificate is required for each vehicle that carries more than eight passengers.

There is a £213 fee for an application for a standard PSV and then a further £141 for a five year licence, or alternatively, once qualified for, the licence can be paid yearly at £28 per year.

Hackney Carriage and private licensing hire

If there is an intention to provide a transportation service for the carriage of passengers to wherever they wish to go then a Hackney Carriage (taxi) licence or a private hire licence will be needed. Both vehicle and driver must be registered and the fees are £200 plus for each. Special insurance is also required. The driver must have no convictions (there is a fee for the check), at least a year old driving licence, a medical (fee) and a knowledge check (fee). The vehicle must also pass an enhanced MOT, which charges a fee, and be regularly maintained.

Licensing of the driver(s)

A standard full licence is sufficient to cover a driver if the vehicle can carry less than eight passengers.

If a vehicle carries over eight passengers then there are additions to the standard full driving licence that need to be obtained.  A Passenger Carrying Vehicle (PVC) entitlement is needed to be added to a standard licence to operate a vehicle that carries more than eight passengers. Category D1 is needed, which allows up to sixteen passengers to be carried and a trailer to be towed. If there are to be more than sixteen passengers then category D must be added. Heavy trailers require category E.

To get these entitlements the driver must apply to the DVLA and take a theory and practical test, as well as passing a medical examination.

Transporting luggage

Unless the weight of the luggage exceeds 3.5 tonnes then there is no extra requirement needed in order to transport it. If it is over 3.5 tonnes then a goods licence is required.

Insurance

Occasional lifts that are not needed to be covered by a PSV or taxi licence only require insurance categories Business Class 1, if only the owner of the vehicle is driving, or Business Class 2, if other named drivers are transporting also. Many insurance policies include these in their provision so no extra action is needed.

A taxi service requires special hire or reward insurance that is not normally offered by standard insurance companies and can be extremely expensive.

As a PSV vehicle may need hire or reward insurance or may only need Business Class insurance, it is important to have a dialogue between the business owner and an insurance company, which can explain the idiosyncrasies of the business and then determine what type of insurance is needed.


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