Minicab cap ‘will not deliver meaningful change’ without national cross-border hiring shake-up, TfL tells Transport Committee inquiry
- Perry Richardson
- 14 hours ago
- 3 min read
Transport for London (TfL) has told MPs that giving local authorities the power to cap private hire vehicle numbers would have limited effect unless central government first reforms national taxi and PHV licensing laws.
In fresh written evidence submitted to the House of Commons Transport Select Committee, TfL said that while it is not opposed in principle to being granted capping powers, such a move would not deliver “meaningful change” under the current legislative framework.
TfL argued that any local cap introduced in London could be easily bypassed by drivers licensed elsewhere, who are currently permitted to operate in the capital under cross-border hiring rules. Those drivers would remain outside TfL’s licensing standards and enforcement regime, weakening the effectiveness of a cap and creating further regulatory loopholes.
The authority said this risk means capping should not be treated as a standalone policy tool. Instead, it should only be considered as part of a wider package of national reforms, including an end to cross-border hiring, greater consistency in licensing standards and stronger enforcement powers for local regulators.
London authority says capping private hire numbers risks market distortion unless cross-border licensing loopholes are closed
TfL outlined potential benefits of a cap, including reduced congestion, environmental gains through encouraging cleaner vehicles, improved earnings stability for drivers and greater market stability by preventing oversupply. However, it warned these outcomes would be undermined if vehicles licensed outside London continued to operate freely within the capital.
The submission also highlighted a series of drawbacks. TfL said caps could reduce vehicle availability, particularly at peak times or in less profitable areas, and could create barriers for new drivers entering the market. It added that determining appropriate supply levels would be resource-intensive for licensing authorities, likely increasing costs that would be passed on through higher licence fees.
TfL further cautioned that caps could lead to enforcement challenges, with a risk that illegal or unlicensed operations expand to meet unmet demand. It also noted that, in some markets, caps have historically driven licence inflation and speculative behaviour, though this risk may be lower where licences are not transferable.
The evidence was submitted as part of the Transport Select Committee’s ongoing Taxi and Private Hire Licensing Inquiry, which is examining whether the current regulatory framework remains fit for purpose. TfL reiterated that its priority remains closing the cross-border licensing loophole, warning MPs that local interventions such as capping will struggle to achieve policy goals unless national legislation is overhauled.
Why is cross-border hiring a hot topic within the taxi and PHV industry?
Cross-border hiring refers to the practice where taxi and private hire drivers licensed by one local authority operate predominantly in another area. In England, PHV drivers can accept bookings anywhere as long as the booking is taken by an operator licensed in the same area as the driver, regardless of where the journey takes place. This has allowed drivers licensed in areas with lower fees or lighter regulatory standards to work extensively in cities far away from where they are licensed without being subject to the local authority’s licensing conditions, emissions rules or enforcement activity.
The issue has become a flashpoint within the taxi and private hire trade because it cuts across safety, fairness and market balance. Taxi drivers and many local authorities argue that cross-border hiring creates uneven competition, drives down earnings and undermines public confidence, as passengers often assume a vehicle operating locally is licensed and regulated locally. Regulators, including Transport for London, have also warned that the system weakens their ability to police standards and respond to safeguarding concerns, making cross-border hiring a central issue in calls for national licensing reform.
