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DO ALL ROADS LEAD TO A CAP? The growing case for local control over taxi and private hire numbers


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A debate is heating up around whether local licensing authorities in England should be handed the power to cap taxi and private hire vehicle (PHV) numbers, bringing them in line with parts of Scotland where such powers already exist.


This growing discussion is shaped by concerns around road congestion, environmental impact and driver welfare. With cities such as Glasgow using legal powers to cap PHV licences, the question facing English regulators is whether the current system is sustainable and what changes are needed to address the challenges facing the sector.

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WHY CAPPING IS BACK ON THE AGENDA


Supporters of caps say the benefits are threefold. First, limiting licence numbers can reduce road congestion. Fewer for-hire vehicles circulating the streets means less traffic, fewer delays, and safer roads for all users. In places like Glasgow, which currently caps its PHV fleet at 3,450 vehicles, campaigners warn that lifting the limit would lead to a sharp increase in traffic levels.


Second, fewer vehicles operating means lower emissions. The combined environmental impact of taxis and PHVs has become a growing concern, particularly in urban areas trying to meet clean air targets. Caps are seen as a way to prevent excessive growth that can undermine these efforts. Local authorities in Scotland have argued that limits support air quality improvements and traffic management plans.

Third, capping vehicle numbers can help prevent oversupply in the sector. A saturated market can force drivers into long hours chasing too few jobs, often leading to a decline in earnings and working conditions. Without a cap, any qualified driver can enter the trade, making it difficult for those already licensed to earn a sustainable living. Some driver representatives say this has turned parts of the industry into a “wild west” of competition, where too many drivers are chasing limited demand.


WHY SCOTLAND CAN CAP, BUT ENGLAND CAN’T


The power to cap PHV numbers exists in Scotland because of changes introduced through the Air Weapons and Licensing (Scotland) Act 2015. From 2017, councils were allowed to refuse new licences where there was evidence of overprovision in a local area.


Glasgow City Council has used this power to keep the number of PHVs in check. The move was introduced to prevent market saturation and help maintain quality of service. The licensing committee there has said the cap was necessary to protect jobs, reduce congestion, and maintain an appropriate balance between taxis and PHVs.

Notably, every hackney carriage in Glasgow is wheelchair-accessible, something that cannot be said for PHVs, and limiting the growth of PHVs indirectly supports the availability of accessible vehicles.


In contrast, councils in England have no equivalent legal power to cap PHVs. While hackney carriage numbers can be limited if there is no significant unmet demand, there is no mechanism to restrict PHV licences on the same basis. English licensing authorities are required to grant a PHV licence to any applicant who meets the statutory criteria, regardless of how many vehicles are already operating.


The legal position for authorities in England is that they have a legal duty to grant a licence to anyone who meets the criteria.


THE SPLIT BETWEEN DRIVERS AND OPERATORS


The issue of capping divides the trade. Many drivers support it. For them, caps offer protection from low earnings and oversupply. A more stable number of vehicles means more consistent income and a chance to work reasonable hours without facing intense competition. Driver unions and associations have argued that unlimited licensing creates a race to the bottom and undermines quality and safety.


Operators, however, take a different view. They argue that caps could reduce service availability and make it harder to meet customer demand. This is especially true during peak periods, when having access to a large pool of drivers is vital to meet bookings. Large app-based operators might say that caps restrict their ability to scale up operations or respond to fluctuations in demand, especially in areas underserved by taxis.


Operators also warn that caps could increase waiting times and reduce convenience for passengers. In places like Glasgow, Uber has called for the cap to be lifted, saying it hampers growth and makes it difficult to offer reliable service.


WHY CROSS-BORDER RULES MAKE CAPPING INEFFECTIVE


Even if English councils were granted the power to cap PHV numbers, the current cross-border licensing rules would make it difficult to enforce in practice.


Under existing legislation, a PHV must be licensed with a specific authority along with the driver and vehicle, but there is no requirement for jobs to be carried out solely within that licensing area. This allows for cross-border hiring, where a driver licensed in one authority operates in another.


As a result, a council that imposes a cap could quickly find itself undercut by vehicles licensed elsewhere. Some areas with faster or cheaper licensing processes have become hubs for issuing thousands of licences to drivers who never intend to work there.


In Greater Manchester, reports have shown that nearly half of the PHVs operating on the roads are not licensed by any of the local authorities in the region. Wolverhampton, for example, has licensed tens of thousands of PHVs, many of which work far beyond the city’s boundaries.


The Mayor of London has described this situation as a “loophole” that undermines local control. Even if TfL were able to cap licence numbers, drivers could simply obtain a licence in a neighbouring authority and continue operating in the capital.


WHAT WOULD NEED TO CHANGE


To make capping viable, two major changes are required.


First, Parliament would need to change the law to give councils the authority to refuse PHV licences based on overprovision. This could mirror the powers already in place for hackney carriages or follow the Scottish model, where local authorities can assess local need and act accordingly.


Second, the rules around cross-border hiring must be reformed. Without limits on where drivers can operate, any cap could be rendered ineffective by out-of-town vehicles flooding in. One option would be to require drivers to primarily operate in the area that licensed them. Another would be to introduce consistent national standards across all licensing authorities to remove incentives for drivers to seek out the most permissive regimes.


Some campaigners have also suggested a move to regional or national licensing frameworks. This would reduce inconsistencies between neighbouring authorities and help ensure that local policies, including caps, are not undermined by licensing variations across council boundaries.


A CHANGE IN POLITICAL DIRECTION?


So far, the Government has been reluctant to support caps. In 2019, it rejected recommendations from the Taxi and PHV Task and Finish Group that local authorities be allowed to cap PHVs. The Department for Transport said at the time that limiting numbers could impact passenger choice and reduce availability.


However, there are signs that this position could shift. Increasing concerns around pollution, road safety, and driver wellbeing are pushing the issue back onto the policy agenda. The recent government Best Practice Guidance suggests that licensing functions may be passed to regional transport authorities in the future, which could make area-wide policies, including caps, more enforceable.


The Home Secretary and Transport Secretary have also acknowledged the problems caused by cross-border licensing and have indicated a willingness to examine reforms to close the gap.


Industry groups and local mayors are continuing to press for change. They argue that without local powers to manage fleet sizes, efforts to improve air quality, reduce traffic and ensure a fair deal for drivers will fall short.


WHERE NEXT?


The direction of travel appears to favour greater local control, but meaningful reform will require action from central government. Until then, English cities are stuck with an open-ended licensing model that does little to manage growth or protect working standards.


Capping remains a contentious topic, balancing customer access with public safety, environmental concerns and driver welfare. But as Glasgow and other Scottish cities show, legal powers to limit numbers can be used to help regulate the trade more effectively. The question for England is whether the political will exists to follow suit.

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