CAPPING NUMBERS: The growth of London private hire industry ‘UNSUSTAINABLE’ warns TfL Transport Commissioner
- Perry Richardson
- 4 minutes ago
- 4 min read
Growing pressure is being placed on policymakers to introduce a cap on private hire vehicle (PHV) numbers in London, as transport officials warn that continued expansion of the sector could become unsustainable without intervention.
At a recent session of the London Assembly Transport Committee, Andy Lord confirmed the scale of the issue, telling Assembly Members that over 100,000 PHVs are currently registered in London,” adding that the figure has “grown significantly over the last few years”.
The commissioner cautioned that if this upward trend continues, the consequences could be far-reaching. “If it carries on the rate it is going, I think it will be unsustainable,” Lord said, pointing to impacts on congestion, market balance and driver livelihoods.
Despite these concerns, Transport for London (TfL) does not have the authority to impose a cap on PHV numbers. Lord made clear that “we don’t have any powers to cap the number of private hire vehicles. It would require primary legislation change,” reinforcing that responsibility ultimately sits with central government.
Transport officials say legislative reform is essential as rising PHV numbers risk undermining driver earnings and increasing congestion
This legislative gap has become a central frustration for both regulators and parts of the taxi trade, particularly as London’s PHV market has evolved rapidly with the rise of app-based operators and flexible working models. While this has expanded consumer choice, it has also increased competition among drivers and intensified pressure on earnings.
Lord acknowledged this imbalance, stating: “At the end of the day, there will only be so much demand available, and if you’ve got too much supply, that starts to have a direct impact on their earnings and their ability to get a sustainable living.”
The issue of oversupply was also raised by Assembly Members, who highlighted the growing number of licensed drivers alongside a backlog of new applicants seeking to enter the market. Concerns were expressed that continued expansion risks creating a cycle in which more drivers chase limited demand, further reducing income levels across the sector.
Alongside economic pressures, congestion remains a key concern. While isolating the exact contribution of PHVs to traffic levels is complex, policymakers have increasingly linked rising vehicle numbers to road network strain, particularly in central London.
However, attempts to introduce a cap are complicated by the ongoing issue of cross-border hiring. Under current legislation, PHV drivers licensed by one local authority can legally operate in another, including working predominantly in London while being licensed elsewhere.
Seb Dance told the committee that this loophole undermines any attempt to control vehicle numbers locally. “The problem with the cap is that whilst you have the cross-border issue, cap is essentially meaningless,” he said.
Dance stressed that resolving cross-border working must come before any meaningful cap could be introduced. “We really do have to seek to have action on the cross-border issue,” he added, noting that only then could further regulatory tools be considered.
Transport for London has been engaging with the Department for Transport on potential reforms, including proposals that would require drivers to operate primarily within their licensing area. Such measures are expected to form part of broader legislative discussions linked to English devolution.
Lord confirmed that TfL has been “very clear” with both taxi and private hire stakeholders about the risks posed by cross-border hiring, describing it as a “real concern” due to the potential for inconsistent safety standards and regulatory oversight.
The debate around caps also intersects with wider tensions between the private hire sector and the black cab trade. Taxi representatives have long argued that the absence of limits on PHV numbers has created an uneven marketplace, contributing to declining taxi driver numbers and increased competition.
While Transport for London’s taxi and private hire action plan includes measures aimed at supporting both sectors, structural changes such as caps remain outside its direct control. The plan itself, which runs through to 2030, is intended to improve sustainability and address regulatory gaps, though progress is dependent on national policy decisions.
Lord indicated that TfL is now seeking to strengthen its evidence base to support further discussions with government. “One of the things that I will ask the team to look at is, if it continues to rise at the rate that we’ve seen… what do we think the wider impact would be to the city?” he said.
This modelling is expected to examine not only congestion impacts but also the long-term viability of driver earnings and the balance between supply and demand.
The prospect of a cap raises questions about business models that rely on scalable driver numbers. Some Assembly Members suggested that certain platforms benefit from maintaining a steady influx of new drivers, even where this may dilute earnings across the workforce.
TfL acknowledged the complexity of the issue, noting that any intervention would need to be handled carefully to avoid unintended consequences for both drivers and passengers.
For now, the introduction of a cap remains uncertain. Without legislative change and resolution of cross-border hiring, the capital’s regulator has limited tools to directly manage vehicle numbers.
