Who pays depends on trip type and if the driver is an employee.
Levy payment responsibilities
Who pays the commercial passenger vehicle service levy depends on 2 things:
- How the trip started.
- Whether the driver is employed by the vehicle owner.
Booked trips
The booking service provider pays the levy for trips that are booked by phone or an app.
Unbooked trips
If a trip starts at a rank or a passenger hails the vehicle, the driver must pay the levy unless:
- the driver is employed, then the vehicle owner pays
- the driver has a formal affiliation agreement with a booking service provider, that provider can pay the levy for the driver’s unbooked trips.
If you are responsible for paying the levy, you must register with us. Our online tool is the easiest way to check if you are responsible for paying the levy.
Employee or contractor
The Commercial Passenger Vehicle Industry Act 2017 does not define an employee. But it is normally easy to work out.
When you are an employee, generally:
- the vehicle owner is the boss and tells you when and how to work
- you use the vehicle and equipment owned by the boss.
Bailment agreement
If you drive a taxi or vehicle under a bailment agreement (also known as a driver agreement), you are usually a contractor, not an employee. A bailment agreement means you use someone else’s vehicle for work, but you are not employed by them. It is not an agreement to buy the vehicle.
How we decide
We consider the whole working relationship between a driver and vehicle owner, not a limited set of factors. If you are unsure about employment status, you can request a private ruling.
Examples of levy responsibility
Example 1
Sam provides trips using her own car. Passengers book trips with Sam via a ride-share app.
The booking service that took the booking – the ride share app – must pay the levy.
Example 2
Asim has a driver agreement, or bailment agreement, with the owner of a taxi. Under the agreement, he drives the taxi then returns it to the owner, but he is not an employee of the owner.
If Asim picks up a passenger at a rank or when he is hailed on the street, he must pay the levy.
If Asim picks up a passenger who booked over the phone, the booking service that took the booking must pay the levy.
Example 3
Kwame is employed by Yellowturn Group which also owns the vehicle he drives.
If Kwame picks up a passenger at a rank or when he is hailed on the street, Yellowturn Group must pay the levy.
If Kwame picks up a passenger who booked over the phone, the booking service that took the booking must pay the levy.
