Southampton taxi licence cap faces review after unmet demand survey finds no shortage of cabs
- Perry Richardson
- 5 days ago
- 3 min read
Southampton City Council is reviewing whether to maintain its long-standing cap on hackney carriage licences after a newly completed unmet demand survey concluded there is currently no overall shortage of taxis across the city.
A report prepared for the council’s Licensing Committee confirms that an independent assessment carried out by Licensed Vehicles Survey and Assessment (LVSA) found no significant unmet demand for hackney carriage services in Southampton. The committee must now decide whether to retain the existing limit of 283 licences, issue additional licences, or remove numerical restrictions altogether.
The review follows a statutory process set out under the Transport Act 1985, which allows local authorities to restrict the number of hackney carriage licences only if they are satisfied there is no significant unmet demand for taxi services in their area. The latest survey, conducted during the summer of 2025, forms part of the council’s periodic review of the policy to ensure it remains robust if challenged legally.
Council officers noted that the city last considered the issue in June 2023, when councillors decided to retain the cap at 283 vehicles following the previous survey conducted in 2022. The limit was reaffirmed again as part of the authority’s taxi policy review in December 2025.
Licensing committee to decide whether to retain the 283-vehicle limit or allow more hackney carriage licences in the city.
The LVSA study involved consultation with taxi and private hire operators, passengers and groups representing key taxi users. According to the report presented to councillors, the findings indicate that demand for hackney carriage services is currently being met within the city, meaning there is no evidence-based requirement to increase vehicle numbers at present.
However, the council’s licensing committee is still required to weigh a number of possible policy approaches. One option is to retain the current numerical restriction on licences, which officers say would align with the survey’s conclusion that demand is currently being satisfied. Under this scenario, the authority would continue commissioning a triennial unmet demand survey to justify the continued cap.
Another option would be to issue a limited number of additional licences to test whether increased supply improves service availability during peak periods. Officers acknowledge that while such a move could potentially reduce waiting times or increase competition, there is limited evidence within the survey to support the need for such an increase.
Councillors could also consider gradually issuing licences over time to expand the fleet incrementally. This approach would allow the authority to monitor market conditions and adjust supply periodically, though it would still require regular surveys to demonstrate that restrictions remain justified.
The most significant change under consideration would be the complete removal of the cap on hackney carriage licences. If implemented, market forces would determine the number of taxis operating in the city without intervention from the council. Officers note that this option aligns most closely with Department for Transport best practice guidance, which generally discourages authorities from restricting taxi licence numbers.
Removing the cap would also eliminate the need for further unmet demand surveys, reducing administrative costs and regulatory workload. However, the report highlights that such a move could trigger concern among existing taxi operators who may fear increased competition and reduced earnings. The council emphasises that economic considerations cannot legally be used as justification when setting taxi licensing policy, as public safety must remain the primary regulatory focus.
Should councillors decide to allow additional licences, the report recommends that any newly issued hackney carriage vehicles must be fully wheelchair accessible and comply with all existing licensing conditions. Licences would also be allocated through the council’s established hackney carriage licence allocation procedure.
The legal framework governing taxi numbers has long been contested across the UK taxi sector. National guidance suggests unrestricted taxi markets can improve consumer choice and availability, but some licensing authorities maintain caps where surveys show demand is already adequately served. Courts have historically upheld restrictions where councils can demonstrate there is no significant unmet demand.
The licensing committee is expected to consider the survey findings and determine the future of the city’s hackney carriage cap in the coming weeks.
