Uber has been accused of exploiting a legal loophole that allows its drivers to operate in UK towns and cities where they don’t have a licence, leaving local authorities powerless to regulate them.

Mick Rix, the GMB union’s national officer for the hackney and private-hire taxi trade, said the company behind the cab-hailing app was “acting with impunity” across the UK, where it was increasingly “spreading its tentacles” into smaller towns and cities.

After changes to the law surrounding taxi licensing, brought in by the Deregulation Act 2015, drivers with a private-hire licence from a local authority can use it to operate anywhere in England and Wales. Previously, the law required drivers to return to the area in which they were licensed between jobs.

Rix said the deregulation of the market and the arrival of Uber had “opened up a real hornets’ nest” all over the UK, where 40,000 Uber drivers now operate in more than 25 towns and cities.

Last month, Southend council found that two cab drivers it had previously stripped of their licences were using the Uber app to pick up passengers in the area. Nasser Hussain, 60, and Nisar Abbas, 37, had been found to be sharing penalty points for traffic offences with other drivers in order to avoid being banned.

Despite this, they were able to get new cab licences from Transport for London, which permitted them to work legally using the Uber app in Southend, where Uber does not have an operators’ licence. Tony Cox, Southend council’s cabinet member for transport, said the legislative loophole had left the local authority “impotent to protect the public”.

Councillors in other local authorities have also complained that Uber drivers who do not fulfil the authority’s specific licensing requirements – such as minimum vehicle age and successful completion of a knowledge test for the area – can still operate legally in their jurisdiction with a licence from elsewhere.

Licensing fees also vary from area to area, leading some to suggest that drivers are seeking out the authorities where it is cheapest to get a private-hire licence.

Reading council denied Uber a licence to operate last year, but during the summer’s Reading festival an average of 1,000 passengers a day took a trip using the taxi app. Although it is not known where the drivers travel in from, it is thought that many are licensed by nearby Slough borough council and Windsor and Maidenhead borough council.

Councillor Paul Gittings, Reading council’s lead member for consumer services, said there was nothing the local authority could do to stop Uber drivers operating in the area, even though the company had failed to meet its licensing conditions – specifically a requirement to have a manned office with a phone line.

A black-cab driver at a protest against Uber in London. Photograph: Stefan Wermuth/Reuters

“I think it does create an uneven playing field, because other private-hire operators and hackney carriages are paying us a licensing fee,” he said. “But Uber drivers can still come along and pick up trade here.”

York council has written to the city’s MPs, calling on them to demand clarity from the government over the law. Uber has a temporary licence to operate in the city and, although only 12 Uber drivers are licensed by York council, hundreds of Uber cabs arrive in York from surrounding areas every weekend, to take advantage of increased demand from the city’s student and tourist populations.

Rachael Maskell, MP for York Central, cited examples of Uber drivers disregarding rules that applied to drivers licensed in the city, such as the prohibition of tinted rear windows or the need for drivers to pass a knowledge test.

“Every local authority has the duty of care within its own boundaries,” she said. “Sheffield [for example] cannot be responsible if something goes wrong in York. The duty of care lies with York council.”



Matt Boxall, head of public protection at City of York council, said that while standards differed between authorities, City of York was working with other councils in the West Yorkshire combined authority region to create more standardised conditions. He stressed that the council took the safety of customers very seriously.

Rix said problems had arisen because some local authorities were “giving licences away like sweets”, citing Rossendale council, which came under fire in 2015 when it was found to have given out more taxi licences per head of its population than London. The council has admitted it was slow to deal with the loopholes created by the Deregulation Act, but says it has since toughened up its licensing processes considerably.

In October last year, 414 of Sheffield’s minicab drivers were found to have obtained their licences from Rossendale council, while 53 had taxi licences issued by Transport for London. Responding to the discovery, Paul Blomfield, MP for Sheffield Central, said the law allowed drivers to “shop around for the most easy-going regime and get their licence there”.

This week, Uber announced it would offer its drivers free English courses and financial advice, as well as introducing an appeals panel for drivers with grievances against the company. This came after Uber faced criticism for denying its drivers basic employment rights.

In October, Uber lost a landmark employment tribunal, which ruled that its drivers should be classed as workers rather than self-employed. The ruling, which Uber is appealing against, could leave the company open to claims from its drivers, who are currently not entitled to holiday pay, pensions or working time controls.

A source at the Department for Transport said local authorities were ultimately responsible for the drivers they awarded licences to, regardless of where the drivers were picking up customers. He said the new Policing and Crime Act, which passed into law at the end of January, ensured that all local authorities had to carry out advanced background checks before issuing licences.



An Uber spokesperson said: “Private-hire drivers are not restricted to driving within one licensing jurisdiction. In fact, it’s common practice for drivers licensed in one council to carry out trips in another. Drivers licensed in England and Wales can legally pick up and drop off passengers anywhere, as long as the trip is pre-booked and their vehicle and driver’s licence match the operator they are registered to.

“Drivers who use the Uber app are no different to other licensed drivers – who all go through the same enhanced DBS background checks – but with our app they have the freedom that comes with being their own boss.”