TAXI drivers have been accused of "deliberately" registering their vehicles in Wolverhampton and then operating in Colchester because it costs half the price.
Colchester Council charges £225 to register as a new private hire vehicle for three years - with there being further vehicle dependent costs.
By comparison it is just £98 to do the same in Wolverhampton.
The news was revealed at a council meeting where licensing bosses admitted it was a "big ongoing issue" and has sparked concerns about safety.
A spokesman for Colchester City Council said: “We are aware that some Wolverhampton-licensed vehicles are operating in Colchester.
"These vehicles must display the required signage for Wolverhampton and have undergone all necessary training and checks in their own licensing area. They are required to follow the same subcontracting procedures as any other operator."
The spokesman added that "passengers must be informed in advance that they are being offered a non-Colchester licensed vehicle" and that they "have the right to decline the service".
At the Licencing Committee meeting this Wednesday, Christine Bell from Panther Cabs, Colchester’s biggest fleet with more than 220 vehicles, said: “As a business owner and as a mother of two daughters, and a nan, I would like to think every taxi driver working in Colchester has been checked and verified to work here.”
In response to Christine’s statement, Paul Donaghy who started his role in August as licensing, community safety, and safeguarding manager, said: “Wolverhampton will be a big ongoing issue."
He said: “We have already started investigating because the answers we’ve got aren’t great but obviously there are certain legal restrictions on what we can do currently."
Mr Donaghy said unlike other councils in Essex, it was "new" for Colchester to have Wolverhampton-plated vehicles and that local authorities cannot stop drivers travelling to Wolverhampton for licenses "until it is illegal".
Mr Donaghy revealed there were potential plans for a “London hub” of enforcement officers and that he would meet with the region's enforcement officer in the next few weeks.
Roger Buston, licencing committee member, said he would be writing to the national government about this "Wolverhampton effect".
Mr Buston added: “If a driver in Colchester is now deliberately choosing to try to transfer to a lesser public safety standard for their own convenience, reward, and benefit, then Colchester Council will need to consider, possibly, that they might not be a fit and proper person to hold a Colchester licence plate in the future.”
A Colchester Council's spokesman said the public should report complaints immediately on Colchester's online system but that any complaints against a Wolverhampton licensed vehicle must be made against Wolverhampton Taxi Licensing.
A Freedom of Information request by the BBC from October, 2023 showed more than a third of Greater Manchester’s taxi drivers were registered in Wolverhampton Council which earned £12.3m from licensing fees in the last three years.
A spokesman for City of Wolverhampton Council 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.
“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."
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