How a ‘licence-where-you-operate model’ could reshape private hire operator networks across England
- Perry Richardson
- 5 minutes ago
- 2 min read
Plans within the English Devolution and Community Empowerment Bill to introduce an optional licence-where-you-operate model are being closely watched by private hire operators as they assess how network structures might need to change.
The proposal would permit mayoral strategic authorities to restrict bookings so that only locally licensed operators can accept and complete journeys that both start and finish within their boundaries. The strict clause is designed to curtail out-of-area working, a practice that has expanded significantly over the past decade as operators centralised dispatch systems and built cross-boundary fleets.
If enacted, the model could prompt operators to draw clearer geographical footprints. Businesses currently leaning on multi-authority licensing to maintain flexibility would face decisions on whether to secure additional licences, consolidate operations or alter their service areas. Larger firms with national coverage may need to reconfigure their hub-and-spoke dispatch models to ensure bookings are consistently allocated to locally compliant drivers in areas that adopt the new powers.
Private hire operators working across several neighbouring districts could no longer send the nearest available vehicle if that vehicle is licensed outside the strategic authority implementing restrictions. This would likely require fleets to be segmented according to licensing geography, increasing administrative overhead and potentially lengthening waiting times in areas with fewer locally licensed drivers.
A shift towards area-based licensing powers would force operators to rethink footprints, fleet allocation and compliance strategies.
Commercial strategies would also come under pressure. Operators relying heavily on out-of-area deployment may need to expand local recruitment or invest in additional licensing fees to maintain coverage. For operators unwilling or unable to meet new area-based requirements, withdrawing from certain markets might well be a realistic scenario. Smaller firms that have built cross-border arrangements to remain competitive could face higher compliance costs and reduced operational flexibility.
Another consideration is compliance infrastructure. Any operator continuing to work across multiple authorities would need robust systems to monitor booking origins, destinations and licensing alignment. Dispatch errors could result in sanctions where strategic authorities exercise their proposed enforcement powers, including fines or suspensions. This might create organisational risks that may encourage operators to streamline operations within fewer boundaries.
In areas where restrictions were to be introduced, the competitive landscape could favour established local operators with existing fleets and licensing arrangements. Meanwhile, national firms might think above moves to acquire or partner with local businesses rather than rely on cross-border fleets, accelerating consolidation within the sector.
Whether or not all strategic authorities would choose to adopt the model, operators could face the prospect of a more fragmented regulatory environment. For a sector that has grown accustomed to operating at scale across overlapping boundaries, a licence-where-you-operate framework would mark a significant pivot.
