Nearly a QUARTER of authorities restrict taxi numbers, so why does Government REFUSE to shift on granting similar powers for PHVs?

Nearly a quarter of English licensing authorities continue to restrict the number of taxis they will license, raising fresh questions over why similar powers remain unavailable for the much larger and faster-growing private hire vehicle market.

The Department for Transport’s latest taxi and private hire vehicle statistics show 64 authorities, or 22%, operate a limit on licensed taxi numbers. A further seven authorities restrict numbers for some vehicle types and three apply limits in only some areas. In total, 74 authorities have some form of quantity control, according to the DfT data supplied for 2026.

The figures are see as significant when set against the direction of the two markets. England had around 52,300 licensed taxis on 1 April 2026, down 7% compared with 2024. In contrast, the PHV fleet reached approximately 290,000 vehicles, up 13%. Outside London, PHV numbers increased even faster, rising 20% to approximately 196,600 vehicles in just two years.

Yet councils outside London have a statutory route to control taxi supply while having no comparable mechanism for PHVs. Under section 16 of the Transport Act 1985, an authority can refuse additional taxi licences for quantity-control purposes where it is satisfied there is no significant unmet demand. The DfT actually regards operating without taxi quantity restrictions as best practice and says existing controls should be regularly reviewed.

That creates an increasingly difficult policy question. If local control over vehicle numbers is considered legitimate enough to remain available for a shrinking taxi market, why has there been little political appetite to provide an equivalent, potentially more flexible power for a PHV sector now more than five times its size?

The debate has been rumbling on for a number of years and readers of TaxiPoint will be all too familiar with the direction of travel. A DfT-commissioned Task and Finish Group recommended in 2018 that licensing authorities should be given powers to place limits on PHV numbers. The Government subsequently decided not to take the recommendation forward. Transport for London (TfL) has also repeatedly said it cannot simply impose a cap itself because it is legally required to issue licences where statutory requirements are satisfied. Primary legislation would therefore be necessary.

The argument for PHV quantity controls has strengthened as app-based ride-hailing has changed the economics of private hire. Supporters for a cap argue that an effectively unlimited supply of drivers and vehicles can contribute to congestion, increase competition for finite passenger demand and weaken driver earnings. Local authorities can regulate safety, vehicle standards and licensing conditions, but cannot currently decide that their local market has reached saturation.

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TaxiPoint analysis has previously identified congestion, emissions and driver earnings among the concerns behind repeated calls for PHV controls. The present framework was also largely designed before mass app-based ride-hailing created operators capable of deploying large numbers of drivers across council boundaries.

There are, however, substantial arguments against a simple numerical ceiling. The Licensed Private Hire Car Association (LPHCA) has argued that quantity restrictions make greater sense for taxis because hackney carriages can ply for hire, cruise for passengers and queue on public highway ranks. PHVs are pre-booked and dispatched through operators, meaning the association disputes claims that restricting licence numbers would necessarily produce the same traffic-management benefits.

The Government has raised a further problem: PHV licensing covers far more than mainstream ride-hailing. The same licensing regime can include school transport, chauffeur and executive services, specialist accessible transport and traditional minicab businesses. A single ceiling could therefore prevent a vehicle required for one part of the market from being licensed simply because growth elsewhere had exhausted the authority’s allocation.

There is also the difficult question of determining the correct number. Taxi quantity controls traditionally depend on unmet-demand surveys examining matters such as rank waiting times, passenger waiting times, latent demand and peak demand. Translating that model into an app-based PHV market, where demand can move rapidly by location, time and platform, would be considerably harder. The Government has specifically identified accurately estimating demand as one reason authorities can be reluctant to impose restrictions even where they already possess the power to do so for taxis.

Perhaps the biggest obstacle remains cross-border hiring. A council could theoretically cap its PHV fleet at a particular level only to see vehicles licensed by neighbouring authorities continue operating within its boundaries. TaxiPoint analysis has previously warned that a patchwork of local caps under the existing system could simply move licensing applications elsewhere rather than reduce the number of PHVs actually working on local roads.

TfL has made essentially the same argument. It has said PHV capping would be ineffective without reform of out-of-area working because operators can use appropriately licensed drivers and vehicles from other licensing areas. That leaves the authority recording the licence potentially disconnected from the place where the vehicle predominantly works.

Scotland demonstrates that PHV quantity controls are legally possible under a different framework. Scottish councils can restrict private hire cars where they establish overprovision, and the issue has recently been debated in cities including Edinburgh and Glasgow. TaxiPoint analysis of the Scottish experience, however, has pointed to potential consequences including displacement of vehicles, poorer availability at certain times and pressure on neighbouring licensing areas.

Competition concerns also remain influential in Whitehall. Competition and Markets Authority guidance has warned that quantity restrictions can reduce availability and choice, increase waiting times and weaken competitive pressure on fares. The DfT consequently continues to favour unrestricted entry unless authorities can demonstrate a specific justification for intervening in the taxi market.

The political contradiction nevertheless becomes harder to ignore as the PHV fleet expands. The DfT figures show a system in which authorities retain a century-old style of supply management for part of a shrinking 52,300-vehicle taxi fleet, while the 290,000-strong PHV sector operates without any equivalent local numerical control.

A workable PHV cap would therefore probably require considerably more than simply copying existing taxi legislation. Parliament would need to decide what constituted overprovision, how different types of PHV work should be treated, whether limits should apply to vehicles, drivers or both, and how passenger availability would be protected. Most importantly, cross-border hiring would need to be addressed so that a limit imposed by one licensing authority could not simply be bypassed through another.

So far the Government has shown little appetite for making that legislative leap. The result is an increasingly unusual regulatory position: local government can restrict entry into the smaller and declining taxi market, but remains largely powerless to control the numerical expansion of the private hire market even where councils believe local roads, enforcement resources or passenger demand cannot sustainably absorb further growth.