The UK government is currently in the early stages of changing the law to close a long-standing loophole that allows private hire drivers to get a licence in one council area and work anywhere in the country – including in cities with stricter licensing rules.
What is the loophole?
Under current law, drivers can apply for a private hire licence from any local council in England and then operate in areas outside of that council’s control.
This has led to thousands of drivers becoming licensed by Wolverhampton Council – known for its quick, digital process – but working in places like Liverpool, Manchester, Birmingham, and elsewhere.
Critics say this weakens local standards, creates unfair competition, and risks public safety, especially where councils like Birmingham, Manchester. Liverpool have stricter training and vetting requirements.
What stage is the legal reform at?
As of late July 2025, the reform is in the “policy commitment and legislative development phase.”
This means:
- The government has officially accepted recommendations from Baroness Casey’s National Audit.
- Both the Home Secretary and Transport Secretary have committed to act.
- The Transport Secretary is now reviewing how to change the law.
No legislation has been introduced yet in Parliament. No new law has passed.
How long will the change take?
There is no exact timeline, but based on standard UK legal procedures, the change could take:
- Best case (if fast-tracked): 6–12 months
- Typical timeframe: 12–24 months
That includes drafting a bill, consulting, debating, passing through both Houses of Parliament, and receiving Royal Assent.
Estimated reform completion: Mid to late 2026, assuming political momentum continues.
What will change once the law is reformed?
When the loophole is closed, the following key changes are expected:
- Drivers will only be allowed to operate in the area where they are licensed.
For example, a Wolverhampton-licensed driver will no longer be allowed to pick up fares in Liverpool or Manchester. - Digital apps like Uber and Bolt will have to follow the same rule – matching passengers only with drivers licensed in the same council area.
- Each council will regain full control over enforcement in its area, and national or minimum standards may be introduced to ensure fairness.
- Weaker councils will no longer be used to avoid stricter checks.
Impact on Wolverhampton-licensed drivers
This reform will hit hardest those who:
- Live and work in other cities but are licensed in Wolverhampton.
- Prefer Wolverhampton licensing to avoid tougher local standards.
Thousands of drivers may lose the right to operate in cities like Liverpool, Manchester, and Birmingham.
They will need to:
- Reapply locally for a licence where they actually work, or
- Only work in Wolverhampton, if they keep their existing licence.
Wolverhampton Council is expected to see a big drop in licence applications and could lose its status as the top licensing authority for out-of-area drivers.
Summary
- Legal stage: Policy confirmed, law being developed – no bill yet.
- Loophole: Drivers can operate in cities they aren’t licensed in.
- Change time: 1–2 years likely.
- Result: Drivers must work where they’re licensed. Local councils regain control. Public safety and fair standards improved.
Experts says drivers and operators should start preparing now – especially those currently working outside their licensed area. Once the law changes, enforcement is expected to increase, and non-compliance could lead to fines or prosecution.
Disclaimer:
This article is for reference purposes only and reflects what is expected based on current government statements and ongoing policy developments. The anticipated changes discussed could affect thousands of private hire drivers, but no legislation has been passed yet.
For official guidance or legal advice, drivers should contact their local licensing authority or consult a qualified legal representative.