Government dismisses London Assembly calls for power to cap PHV numbers
- Perry Richardson
- 1 hour ago
- 3 min read
Transport Secretary Heidi Alexander has ruled out granting Transport for London (TfL) or other licensing authorities the power to cap private hire vehicle (PHV) numbers, despite growing concerns over the scale of PHV growth in the capital.
In a letter to London Assembly Member Elly Baker, Alexander said the Government had “no current plans to amend primary legislation” to allow authorities to limit the number of PHV licences issued. The response follows mounting pressure from the London Assembly and the taxi trade to give TfL stronger powers to manage congestion and improve air quality through tighter regulation of PHVs.
Alexander acknowledged the concerns raised by the committee about the changing structure of the taxi and PHV market, the impact of app-based operators on traditional services, and the record number of PHVs now licensed in London. However, she said the Government must “support choice for consumers” and ensure both taxis and PHVs are able to operate successfully within the market.
The letter drew a clear distinction between the two trades. “Taxis play an important role in meeting London’s transport needs, offering a premium service to passengers including guarantees on accessibility of vehicles and the confidence provided by drivers who have the Knowledge,” she wrote. “PHVs provide a different range of services, which passengers also value.”
Alexander said the Government believed a cap would be too blunt a tool to deal with the issues raised. “The PHV trade is more diverse than the taxi trade and a blanket cap may not reflect the different services that companies with that licensing regime serve,” she wrote. As an example, she noted that “a cap could mean that a home to school transport or executive hire provider was unable to license a much-needed vehicle because the total number of PHVs had reached the level of demand estimated to be needed by their licensing authority.”
The Secretary of State added that the experience of local authorities that already restrict taxi numbers showed the practical limitations of such a policy. “Officials have advised that the difficulty in accurately estimating demand is a key reason for this,” she said. “As of 1 April 2024, only 29% of licensing authorities have any form of restriction in place.”
Alexander also questioned whether capping PHV numbers would produce the intended results. She warned that limits could distort supply, encouraging operators to concentrate activity in the most profitable urban areas. “A PHV cap for an area may not reduce those operating in the busiest parts of a licensing authority area but instead reduce the supply in quieter areas as the trade seek to maximise their earnings,” she said.
The Government’s position is that such a shift could disproportionately affect passengers in outer London and rural areas, where choice is already more limited. The letter added: “Passengers in more rural areas may be left with less choice, longer wait times and higher fares; particularly those with mobility issues that use these services more than those without.”
Alexander also raised safety concerns, saying reduced access to legitimate transport options could “lead to passengers using unlicensed, unvetted and uninsured drivers and vehicles.”
Perhaps most significantly, she said that any local power to cap PHV numbers would be “ineffective without a means to prevent PHVs licensed elsewhere carrying passengers in that authority’s area.” The issue of out-of-area working remains a key obstacle in reforming PHV regulation, with operators able to obtain licences from other councils while continuing to work predominantly in London.
The Transport Secretary confirmed her department would continue to examine this issue as part of wider legislative reforms. “The Government recognises and understands the concerns around out-of-area working,” she said. “We will work as quickly as possible to consider all options, including out-of-area working, national standards and enforcement, seeking the best overall outcomes for passenger safety.”
The response from Alexander is likely to disappoint many driver within the taxi trade, who argue that the capital’s growing PHV fleet has worsened congestion and undermined environmental goals. TfL data has shown PHV numbers climbing sharply over the past decade, while taxi numbers remain capped.
Industry representatives have long argued that without control over PHV numbers, the capital faces continued traffic pressure and reduced earnings for professional drivers. The Government’s latest position, however, makes clear that any such powers are unlikely to be introduced in the short term.
