The increasing number of private hire taxis working in Greater Manchester and licensed by Wolverhampton Council means local authorities may have lost out on millions.

A recent investigation found that 8,952 drivers in the region, who work pre-book only companies like Uber, are actually licensed by the midlands-based council around 80 miles away. This makes up 35 per cent of the private hire cabs operating across the city-region – meaning local councils are not getting any money from these cabbies.

There are 36,033 private hire drivers with a Wolverhampton plate in total in the UK, Freedom of Information (FOI) data has revealed, which is 13 per cent of Wolverhampton’s total population (around 262,000).

New FOI data has revealed that Wolverhampton Council has raked in £12.3m from licensing fees in the last three years – and 24.8 per cent of their drivers work in Greater Manchester. This means that almost one quarter of their income comes from drivers actually working 80 miles away.

As a result of drivers in the Greater Manchester region licensing elsewhere, there is potential that local councils are losing out on millions considering they charge drivers more for licensing fees and associated tests than Wolverhampton. For example, under Manchester City Council, it costs £255 to register as a new private hire driver for three years, plus costs for tests and between £222 and £342 to register a vehicle (depending on its age).

Under Wolverhampton Council, the application fee for a new private hire driver is £49 for a one-year licence or £98 for a three-year licence and it costs £95 to register a vehicle under 10 years old.

However, the Midlands council cannot use the money gained from licensing fees to fund other council projects. Legally, 100 per cent of this income has to be used on the licence scheme, including issue, administration and compliance. 

According to their response to the FOI submitted by the Local Democracy Reporting Service, where there is a surplus, this is placed into the reserves and is used to reduce fees (for licensing) the following year.

Greater Manchester Mayor Andy Burnham has previously weighed in on the issue, criticising ‘out of town’ drivers for using a legal loophole to get away with having ‘lower standards’ of practice. Current legislation means that private hire drivers can operate anywhere in the UK outside of London, even if they are not licensed in that particular area.

“How can you guarantee the safety of people on the streets from there (Wolverhampton),” Mr Burnham said on the latest ‘In the Hotseat’ programme on BBC Radio Manchester. “I think the reason people go there is because they don’t charge as much to licence taxis.

“The checks they do aren’t as stringent and it is not right. They are undermining public safety in Greater Manchester.

“I appeal to the government and to the council in Wolverhampton to change what they are doing as it does not build public safety. I would say to any Greater Manchester resident, only use taxi firms that are registered in one of our 10 boroughs.”

Greater Manchester sought powers to restrict out of area operation in its Trailblazer negotiations, but did not get agreement from the Government as part of the devolution deal.

Wolverhampton Council have previously denied that it is ‘quicker and easier’ to get a private hire licence with them, claiming applicants undergo a ‘strict and rigorous’ process that includes a one day training course, enhanced Disclosure and Barring Service checks, a medical certification and a face to face English assessment.

A spokesperson for City of Wolverhampton Council previously said: “While City of Wolverhampton Council has never actively encouraged applications from drivers outside the city, existing legislation requires that if an application is submitted and requirements are met, then the application must be granted. The council may not refuse an applicant simply because they live in a different area.

“Our early adoption of digital technology has allowed us to offer a simple and efficient online application procedure, with the requirement that drivers attend in person for training and strict assessment before an application can be processed.

“Applicants are usually local to the area they drive in, but many have chosen to be licensed in Wolverhampton due to our efficient, yet rigorous, licensing process. Public safety is of paramount importance to us. Partnership working with our Licensing colleagues and other agencies shows our commitment to upholding our responsibilities; we expect drivers and vehicles licensed by us to always maintain the highest standards.

“This is irrespective of the administrative boundary within which they are operating at any particular time. The City of Wolverhampton Council takes its enforcement responsibilities seriously and our officers are out across the country, every Friday and Saturday night, working to protect the public.”