With a protest by Toronto taxi drivers looming, City Hall has licensed Uber as a Private Transportation Company (PTC).

The regulatory move, hailed as a first by city officials, comes after council voted in May to legalize the ride hailing service through the new Vehicle-for-Hire bylaw.

"It's the first licence issued to Uber in Canada," Tracey Cook, Executive Director of Municipal Licensing and Standards for the City of Toronto, said at a media conference on Tuesday afternoon.

Cook said city staff have been working closely with Uber to develop the new bylaws, as it is the only PTC operating in the city.

In a statement to CBC News, Uber spokesperson Susie Heath said the licence "comes as a result of cooperating with the City of Toronto as they work to implement the new city bylaw."

The Vehicle-for-Hire bylaw came into effect on July 15 and some taxi drivers had expressed frustration with a perceived lack of action on the city's part.

A protest by taxi drivers is scheduled for Wednesday morning.

City to screen thousands of drivers

With Uber now regulated, the city will begin to screen and license all of the company's drivers, including those using private vehicles through the UberX service.

It will be up to Uber to forward its drivers' background information to City officials.

Tracey Cook, Executive Director of Municipal Licensing and Standards for the city of Toronto, speaking to the media on Tuesday. (CBC)

"All of that information ... is sent to us, screened by us. We will issue a licence," Cook said.

The City is expecting to issue roughly 12,000 licenses. The target date to have all Uber drivers licensed is early September.

'A political stunt'

The association representing Toronto's taxi drivers slammed the timing of the announcement and said it will carry on with Wednesday's demonstration.

"It's a political stunt, hoping that out of shame we won't do the protest anymore," said Paul Sekhon, president of the United Taxi Workers Association.

Sekhon said despite the company's licence, UberX drivers should be taken off the road until their individual files are processed by the city.

"They should not be working," he said. "It's just showing that we're second class compared to them."

Fewer Uber drivers on the road

Cook says the bylaw has forced Uber to take some drivers off the road.

The new bylaw requires that all PTC vehicles be no older than seven model years.

"We are aware that Uber has implemented that and they've seen a reduction of about 30 per cent of their driver base," Cook said.

Unlicensed drivers should be reported to the city and bylaw officers will investigate, she said.

"If we get word that there are people in private vehicles soliciting rides on the street, as in street hailing, we want them to contact the city. That is absolutely prohibited conduct."

Cook says Uber customers with issues about a ride, such as a fare dispute, should contact the company directly.