Taxi and PHV reform: turning momentum into real change

Three black taxis queued on a city street at an intersection.
Author
Monta Drozdova

Legislation written for horse‑drawn cabs over 150 years ago is set to see the most significant reform in decades. With the proposed draft Taxi and Private Hire Vehicle (PHV) Bill and the Government’s recent consultation on licensing responsibilities as well as Transport Select Committee inquiry now concluded, there is a clear sense of momentum behind modernising the sector. 

Sector in need of reform

Taxis and PHVs play a vital role in ensuring people can access jobs, education, healthcare and social opportunities. They are especially important for disabled passengers, those travelling late at night, and communities with limited public transport options. 

But while the importance of the sector is clear, so too is the need for reform. The legislative framework that underpins it has simply not kept pace with the way services are now delivered. Taxi laws date back nearly 2 centuries, and private hire legislation reflects a pre-digital era. In the years since, app-based platforms have transformed how journeys are booked and managed, and blurred the boundaries between local markets. Regulation, however, has largely evolved in a piecemeal way. 

The result is a system that often feels fragmented. Standards vary significantly between areas, enforcement is constrained by local boundaries, and both passengers and drivers can face inconsistencies depending on where a licence has been issued. These issues are well understood across the sector and have been raised repeatedly over the past decade. 

Taxi licensing requires modern, progressive legislation which is suitable for the world it now operates in and enables transport authorities to best reflect their local priorities, geography and governance structures.  

It is in this context and more recent local campaigns and serious concerns raised by Baroness Casey’s national audit, that the Government confirmed plans to introduce a major overhaul of taxi and private hire vehicle licensing laws.  

Draft Taxi and Private Vehicle Bill 

The proposed draft Taxi and Private Hire Vehicle Bill, set out in the King’s Speech 2026, will be put forward for pre-legislative scrutiny and is designed to replace what ministers describe as an outdated and fragmented licensing framework that no longer reflects how passengers travel, book and use taxi and PHV services. 

At its core is the ambition to replace the current patchwork of rules with a single, more consistent national framework, one that better reflects how services are actually used today.   

The proposed introduction of stronger national standards, enhanced enforcement powers and mandatory information sharing between licensing authorities all respond directly to long-standing concerns across the sector. The move towards a more robust national database of drivers, vehicles and operators could significantly strengthen safeguarding and improve oversight across boundaries.  

The proposed draft Bill offers an important opportunity to update the system. Ultimately our members need the right legislative and proportionate funding arrangements in place to design and deliver a safe and fair taxi and PHV system for passengers and drivers alike, with approaches that best reflect their local priorities, geography and governance structures. 

Taxi rank at Birmingham New Street station.

Government consultation 

Alongside the draft Bill, the Government has consulted on proposals to make all Local Transport Authorities (LTAs) responsible for taxi and PHV licensing. 

While the intention to improve coordination is positive, the Urban Transport Group's response to the consultation on local transport authorities and the licensing of taxis and private hire vehicles highlights several risks with this approach. 

Local government already plays a central role in taxi and PHV licensing, with established teams working across regulatory functions such as safeguarding and public protection. Moving these responsibilities wholesale to a different tier of authority risks disrupting well-functioning systems, creating additional costs and weakening important links between services.  

There is also a broader concern about the essence undermining the spirit of devolution. Our members have developed their own approaches, often through collaboration between local authorities, reflecting local priorities and governance structures. There is good practice to learn from, but imposing a single national model could cut across that flexibility, local context and approaches. Perhaps most importantly, changing where licensing sits does not in itself resolve the core issues facing the sector. Challenges around cross-border working, inconsistent standards and limited enforcement powers will remain unless they are addressed directly through legislation and policy. 

The challenges 

The current system has created a fragmented regulatory landscape in which the standards applied to drivers are determined by the licensing authority that issued their badge, rather than the area in which they predominantly work. This has resulted in considerable disparities in enforcement, vehicle standards, and compliance costs across localities. Drivers operating in areas with more stringent licensing regimes are subject to higher standards, more frequent inspections, and increased financial burdens. Yet they must compete with drivers who gained their licenses in areas with lower requirements, who are not held to the same standards. This undermines the integrity of local licensing systems and creates an uneven playing field. 

While cross-border operations can offer benefits, such as increased booking opportunities for drivers, improved service coverage for operators, and greater choice for passengers, the current model does not adequately reflect the realities of today’s app-based, demand-driven transport environment. The disconnect between licensing location and operational activity has raised serious concerns around enforcement, public safety, and fairness. 

That is why the detail of the draft Bill will matter so much. Government has been clear that the reforms are intended, in part, to respond to concerns about passenger safety and gaps in the existing system. Strengthening these areas is critical, not only to protect passengers, but to support the vast majority of drivers who already operate to high standards. 

Looking ahead, reform will also need to anticipate future change. The continued growth of app-based platforms is reshaping the sector, while emerging technologies such as autonomous vehicles will require entirely new approaches to regulation. At the same time, wider issues, such as data sharing, market oversight and fair competition, are becoming increasingly central to how the sector functions. 

Black taxis outside Chinatown in London.

Transport Select Committee inquiry 

Many of these issues were also highlighted in the new Transport Select Committee inquiry report Raising the standard: licensing of taxis and private hire vehicles, branding the legislative framework governing taxi and PHV licensing in England outdated and unfit for purpose. Amongst its recommendations the committee sets out the key tenets that ought to be covered under national standards, including passenger safety and Disclosure and Barring Service (DBS) checks, information sharing, accessibility and CCTV.

The committee also calls on the department to bring forward a clear plan to curtail out-of-area working and create greater incentives for drivers to license in the area where they operate, enabling more effective local enforcement. The mismatch between enforcement responsibilities and funding are also highlighted in the committee’s report, as well as a call on the Government to publish a comparative appraisal of licensing models — including the local transport authority approach and a potential national model, as the committee members were not persuaded by the proposals to make all LTAs responsible for taxi and PHV licensing.

Getting the reform right

Taken together, the draft Bill, the Department for Transport consultation on making all LTAs in England responsible for taxi and PHV licensing, and the Transport Select Committee's inquiry, mark a rare window for meaningful reform. The direction is broadly positive: towards clearer national frameworks, stronger enforcement and a more consistent passenger experience. 

Taxis and PHVs will continue to play a crucial role in our transport networks, supporting access, inclusion and economic activity in towns and cities across the country. Getting this reform right will ensure that these services can continue to meet the needs of the people and places they serve. 

The Urban Transport Group and our members stand ready to work with government to help make that happen. 

Author: Monta Drozdova is Policy Manager at the Urban Transport Group.

Taxi rank in Paisley with white taxis parked in a circle.

Notes  

The Government’s draft legislation sets out a wide-ranging package of reforms including: 

  • Modernise taxi and private hire law for the way people travel today, replacing a patchwork of outdated, Victorian-era rules with a single, consistent framework across England that passengers and drivers can trust. 
  • Deliver on the commitment to legislate in response to Baroness Casey’s National Audit on Group-based Child Sexual Exploitation and Abuse by: 
    • Fixing a fragmented system that has not always protected passengers as it should. 
    • Strengthening public safety and accountability through clear requirements for obtaining and holding licences. 
    • Improving the efficiency of licensing and enabling strong, consistent enforcement powers. 
    • Matching funding for enforcement to where services are delivered.
  • Give regulators stronger enforcement powers so swift and effective action can be taken when drivers or operators breach licence conditions, helping to drive up standards and tackle poor or unsafe practice. 
  • Improve transparency and information-sharing nationwide by mandating use of a national database of all licensed vehicles, drivers and PHV operators, so licensing authorities can better protect the public and passengers can have greater confidence in the system. 
  • Deliver more accessible services for disabled passengers by strengthening existing protections and removing barriers to travel, helping ensure people who rely most on taxis and PHV are not left behind. 
  • Provide a consistent customer experience wherever people travel, so passengers can expect safe, reliable and properly regulated services whether travelling locally or long distances across local authority boundaries. 
  • Support a thriving, professional sector by creating clearer rules to enable fair competition, while supporting the wider economy (including the night-time economy, shift workers and local businesses).

Urban Transport Group consultation responses