TRANSPORT COMMITTEE INQUIRY RESULTS: MPs launch fresh attack on taxi licence shopping as pressure mounts for tougher standards
- Perry Richardson
- 1 day ago
- 4 min read
The Transport Committee has called on ministers to introduce robust national taxi and private hire vehicle licensing standards and develop a clear strategy to tackle widespread out-of-area working, warning that the Government’s planned reforms risk becoming “low by default” if not carefully designed.
In a report published today, the Committee backed the Government’s intention to legislate for national minimum standards across England but cautioned that any framework must be sufficiently strong to prevent authorities with lower requirements from continuing to attract drivers seeking easier routes to obtaining a licence.
The report arrives at a pivotal moment for the taxi and private hire industry. England currently has more than 260 separate licensing authorities, each operating its own set of licensing conditions. The fragmented system has long been criticised by drivers, operators, trade associations and local authorities, particularly as technology has enabled drivers licensed in one area to work extensively in another.
The Government announced in November 2025 that it would introduce national minimum standards for taxis and private hire vehicles. Under that model, all licensing authorities would be required to meet a baseline set of conditions, while retaining the ability to impose stricter requirements where local circumstances justify them.
MPs warn Government that national minimum standards must not become a race to the bottom as concerns over out-of-area working intensify
However, some industry stakeholders have argued that only absolute national standards would solve the sector’s longstanding inconsistencies. Such a system would require every authority to apply exactly the same licensing conditions, removing local variation altogether.
The Committee stopped short of recommending absolute national standards, but its report signals concern that a minimum standards approach could fail unless the baseline is set high enough.
The report states: “We welcome the department’s acknowledgement that greater national consistency in licensing standards is required. However, we are not persuaded that the current plan to pursue national minimum standards will be sufficient, unless those standards are strong enough to avoid a lowest common denominator effect, and carefully specified to remove incentives for licence shopping.”
The Committee added that the Government’s approach “must not mean low by default” and urged ministers to minimise areas where standards can vary between authorities.
At the heart of the debate is the issue of out-of-area working, which has become one of the most contentious topics in the industry over the last decade.
The practice allows drivers and operators to obtain licences from one authority while conducting most of their work elsewhere. Critics argue that it has encouraged “licence shopping”, where drivers seek licences from authorities perceived to have lower costs or less demanding requirements.
During the inquiry, the Committee heard strong criticism of the practice. The Blackpool Taxi Association described out-of-area working as “the root cause to all that’s wrong” within the current licensing framework.
Concerns extend beyond industry competition and enforcement challenges. The issue has increasingly been linked to safeguarding. Baroness Louise Casey’s 2025 report into group-based sexual exploitation highlighted licence shopping as a factor undermining safeguarding measures and creating inconsistencies in regulatory oversight.
While acknowledging these concerns, the Committee recognised that an outright ban on out-of-area working would be difficult to implement in practice.
Instead, MPs called for targeted reforms designed to encourage drivers to obtain licences in the areas where they primarily work.
The report states: “We urge the Department to bring forward a clear plan to curtail the extensive practice of out-of-area working and create greater incentives for drivers to license in the locality in which they operate.”
According to the Committee, reducing out-of-area working would strengthen local enforcement powers, improve accountability and help rebuild public trust in the sector.
Transport Committee Chair Ruth Cadbury said: “Throughout our inquiry, the Transport Committee heard concerns about inconsistent taxi standards up and down the country. We also encountered deep-seated opposition to routine out-of-area working that many believe reduces standards by enabling licence shopping.
“The Committee welcomes the Government’s determination to turn this around with minimum standards, but we are clear that these standards should be high, comprehensive and consistent, with safety as absolute – both for drivers and passengers.”
Cadbury also urged ministers to go further, saying: “Ministers should also build on the foundations they have laid with a blueprint for bringing down high levels of out-of-area working that has undermined public confidence in the sector and made enforcement harder.”
The report is likely to add momentum to ongoing industry debates around licensing reform. Taxi representatives have frequently argued that drivers complying with stricter local standards are placed at a competitive disadvantage when drivers licensed elsewhere can operate in the same area under different conditions.
The Committee’s intervention also comes shortly after the Government used the King’s Speech in May 2026 to announce plans for further modernisation of taxi and private hire regulation, including the creation of a national database of licensed taxis and private hire vehicles.
The Committee’s findings increase pressure on ministers to ensure forthcoming legislation addresses both consistency of standards and the growing challenges associated with cross-border working. With safety, enforcement and public confidence now firmly at the centre of the debate, the shape of the Government’s final reforms will be closely watched across the industry.
FURTHER RELATED NEWS STORIES:
