Fresh licensing inquiry offers opportunity to reshape the future of taxi and PHV industry

A wide-ranging inquiry by the Transport Committee into licensing standards in the taxi and private hire vehicle (PHV) sector has opened the door to one of the most significant reviews of regulation in decades. The inquiry is expected to cover everything from cross-border licensing and safety enforcement to accessibility, operator accountability and the anticipated arrival of autonomous vehicles. While much of the focus so far has been on the inconsistencies and gaps in the current system, this review also presents a major opportunity for the trade to help shape a future that is viable, modern, and competitive.

THE BACKGROUND: A PATCHWORK OF REGULATION

The current regulatory framework for taxis and PHVs in England is largely built around the Local Government (Miscellaneous Provisions) Act 1976 and the Private Hire Vehicles (London) Act 1998. These laws place responsibility for licensing drivers, vehicles and operators in the hands of local authorities. While the Department for Transport provides statutory guidance, each licensing authority retains the freedom to set its own local standards within the legal framework.

This flexibility has led to a wide variation in licensing rules. Some authorities have strict safety checks, detailed accessibility requirements and strong enforcement capacity. Others operate under lighter-touch systems. This has created inconsistencies in passenger experience, driver conduct and the level of oversight across the country.

In recent years, ride-hailing platforms have further disrupted the market. Their app-based booking models, remote operator structures and cross-boundary working practices have exposed weaknesses in how traditional licensing laws apply in a digital and mobile environment.

Meanwhile, a growing number of drivers now seek licences from authorities that are faster or cheaper to deal with, regardless of where they intend to work.

It is this shifting model that has prompted the Transport Committee to launch a new inquiry into licensing and standards. It aims to explore whether the current system is fit for purpose, how passenger safety and service quality can be improved, and what reforms might be needed to prepare for future developments in vehicle technology.

THE SCOPE OF THE INQUIRY

The inquiry will look at how local authorities use their existing powers to regulate the sector. It will examine the effectiveness of enforcement regimes and how licensing conditions vary between areas. It will explore whether national baseline standards are needed and assess how technology is changing the industry.

Specifically, MPs will consider the challenges created by cross-border licensing, the fairness of current arrangements for operators and drivers, and the effectiveness of national tools such as the National Register of Licence Revocations andRefusals (NR3).

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They will also look to the future, assessing how the sector can adapt to the likely arrival of autonomous taxis and PHVs. This includes exploring what licensing arrangements would be needed, how safety and accessibility could be managed without a human driver, and how accountability would be enforced if software providers or remote operators replace the traditional driver role.

The inquiry will take written and oral evidence from licensing authorities, operators, technology firms, driver representatives, passenger groups and industry experts. Written submissions are open until 8 September 2025.

A CHANCE TO RESET FOR THE YEARS AHEAD

While the inquiry will no doubt raise concerns about current weaknesses in the system, it also offers a rare chance for the trade to set out a long-term vision for the future.

Many in the industry recognise that the current model, designed decades ago, is under pressure from modern demands. Passenger expectations have changed. The public now expects real-time booking, live vehicle tracking, cashless payments and a standard of service that aligns with other transport options. The rise of on-demand platforms has redefined what passengers see as convenient, affordable and reliable.

For traditional taxi and PHV operators, this presents both a challenge and an opportunity. By engaging with the inquiry, the sector has a chance to argue for a framework that ensures fair competition, protects driver livelihoods, and supports long-term investment in safer, cleaner and more accessible vehicles.

There is also an opportunity to improve public confidence. A consistent, enforceable national licensing baseline could help ensure that all passengers, wherever they travel, receive the same standard of service and protection. Properly resourced enforcement, clearer data-sharing, and shared oversight tools could help prevent incidents and raise professionalism across the board.

DIGITAL DISRUPTION AND FUTURE MOBILITY

The inquiry arrives at a time when digital platforms continue to expand their reach in the UK market. While these services have introduced new technology and booking systems, they have also raised questions about accountability and standards.

There is still no clear regulatory framework for how ride-hailing platforms themselves should be overseen. Some councils treat them as standard PHV operators, while others argue they fall outside existing definitions. The inquiry could lead to a clearer structure for how these platforms are licensed, what responsibilities they hold, and how they work with local and regional authorities.

Looking further ahead, the potential introduction of autonomous vehicles into the taxi and PHV market adds a new dimension. If self-driving vehicles become a commercial reality, the entire basis of driver licensing will need to be rethought. Regulators will need to address questions such as who holds responsibility in the event of a fault, how passenger safety will be monitored, and how accessibility will be designed into vehicle systems from the start.

Rather than waiting for AVs to arrive and disrupt the market, the industry now has the chance to influence how that transition is managed. This includes shaping what standards should apply to autonomous fleets, how their operators are licensed, and how traditional services and AVs can operate alongside each other during the transition period.

THE ROLE OF REGIONAL AND NATIONAL COORDINATION

There is growing support for greater coordination across licensing authorities. Some argue for national standards enforced through a central licensing authority. Others propose a regional model, where mayoral combined authorities oversee licensing in larger urban areas while rural authorities retain local control.

The inquiry could bring clarity on this point. Regional models may help smooth out local differences and improve enforcement in areas with large numbers of cross-border vehicles. But they must also ensure that drivers and operators can still engage with licensing teams locally and that the distinct needs of different communities are respected.

AN INDUSTRY VOICE IS NEEDED

The trade now has a clear window to influence what happens next. Whether through driver groups, operators, associations or direct submissions, this inquiry allows the sector to speak with a unified voice about the kind of licensing system that is needed to protect its future.

With the right reforms, the industry can position itself to remain a central part of local transport for years to come. That means fair licensing rules, consistent safety standards, investment in accessibility, and readiness for future technologies. This inquiry is a rare chance to build a foundation that supports the trade through modernisation, rather than being overtaken by it.