Why Some Drivers and Operators Want to KEEP Controversial Rules

The rules governing cross-border taxi and private hire vehicle (PHV) operations in the UK have long been a source of controversy. At the heart of the debate are the current rules, which allow licensed taxi and PHV drivers to charge outside their local licensed area, provided they book in advance. These rules have caused friction between drivers and companies, particularly in the growing gig economy and app-based ride-hailing services.

A major bone of contention is how drivers can operate in areas where they are not licensed. Traditionally, taxi and private hire company drivers were required to operate in the jurisdiction where they were licensed, which gave local councils control over safety standards, driver vetting and enforcement. However, with the rise of PHV companies such as Uber and Bolt, many drivers have applied for licenses in areas with less stringent requirements and lower license fees, but still operate in busier, more profitable cities. This has led to accusations of “license shopping,” where drivers bypass stricter regulations in one area by obtaining licenses elsewhere.

For local drivers, especially those licensed in highly regulated areas, the ability for out-of-town drivers to work in their area means unfair competition. They say these drivers undermine safety and bypass the higher costs of doing business in cities with stricter licensing standards. Councils in large cities echo those concerns, noting that out-of-area drivers are harder to regulate and often don’t follow local standards for vehicle inspections, insurance checks and background checks.

For many PHV drivers, especially those associated with companies like Uber, the current rules offer flexibility and better earning potential. Drivers can work in multiple jurisdictions to meet demand, rather than being confined to one location. This is particularly valuable in the gig economy, where income can be volatile. If cross-border rules were tightened, 10,000 drivers would only be licensed to work in the Wolverhampton area, forcing most drivers to re-apply for a license in the region they actually plan to work in.

Another important factor is that some areas have licensing systems that are easier and cheaper to operate. Drivers, especially those working part-time or with limited financial resources, prefer these jurisdictions because they reduce their operating costs. In a competitive market, keeping overheads low can be crucial to maintaining profitability. These drivers therefore have a strong incentive to oppose any changes to current cross-border regulations.

Ride-hailing companies like Uber and Bolt benefit greatly from existing cross-border regulations. By allowing drivers to operate in multiple jurisdictions, they maintain a larger, more flexible workforce that can respond quickly and efficiently to changes in demand. This scalability is key for these companies, whose business models rely on having enough drivers available at peak times to meet customer demand.

If the regulations were changed to restrict drivers to operating only within their licensed area, companies would likely face higher recruitment costs and logistical challenges in maintaining service levels. It could also make working for such platforms less attractive, leading to driver shortages and higher ticket prices.

From a business perspective, maintaining cross-border regulations in their current form helps companies expand more easily into new markets and reduces their reliance on strict local regulations that might otherwise hinder their growth. This flexibility is integral to the passenger transport model, which seeks to dynamically balance supply and demand, without the geographic constraints that traditional taxi companies face.

The controversy over cross-border taxi and PHV regulations pits local drivers and councils against transport companies and drivers seeking greater flexibility. The current regulations offer significant benefits to drivers who want the freedom to work in different areas and to companies that rely on a flexible workforce. However, these benefits come at the cost of local regulation and fair competition, with many stakeholders calling for stricter regulations to ensure safety, fair competition and compliance with local standards.