Drivers from across the country are flocking to the city council for licences because of its fast online application process, which takes 20 working days or less and costs just £69, and the fact that once they have their licence they are not required to operate in Wolverhampton.
It has been branded a ‘joke’ by Shaz Saleem – who is the adviser for the West Midland Drivers’ Association, which looks after 4,000 drivers.
Mr Saleem said customers across the Black Country are being put at risk by the council’s poor standards.
Mr Saleem also said some taxi drivers were taking advantage of a ‘loophole’ in cross-border rules, which allows applicants to receive new licences in Wolverhampton despite having it revoked by other councils.
Drivers cannot apply online in Walsall or Sandwell. But they can submit their application online in Dudley.
However they are all more expensive than Wolverhampton.
In Walsall an application for a private hire licence costs £102, in Sandwell it is £153 and Dudley £242.77.
Licensing manager at Wolverhampton council Chris Howell said: “Wolverhampton council has invested in a state-of-the-art online system which enables us to process licences much faster than most other areas.
“This makes us an attractive proposition to drivers and we cannot turn them away, providing they meet our stringent standards.
"Our standards are among the best anywhere in the country and have been recognised by the Home Office which has urged other areas to adopt our guidelines."
It has proved lucrative for the council which made £1.29 million from taxi licensing in 2016/17.
Figures released following a freedom of information request revealed 4,168 private hire licences – for cars that have to be booked in advance by passengers – were issued to people living out of the city by the council last year.
It is a 6,847 per cent rise from 2013. Meanwhile 927 private hire licences were handed to drivers living in Wolverhampton.
In 2013, the council issued 60 private hire licences to drivers outside the city and 510 to Wolverhampton residents, the data showed.
Mr Saleem, the chairman of Dudley Private Hire and Taxi Association, said: “It’s a joke. Across the Black Country, this is a serious issue.
"Public safety has to be the most important thing.”
Liberal Democrat campaigner Mr Jenkins said: “The council is handing out licences like sweets.”
The Deregulation Act 2015 means private hire operators and drivers can choose where they apply for their licences.
All applicants are required to undertake a ‘robust’ driver training programme and pass a written assessment, the council said.
Figures also showed Hackney Carriage licences – for black cabs that can be hailed on the street – were dished out to 155 Wolverhampton residents last year and just 26 to people out of the area.
In 2013, the council issued 144 of these licences to city residents and 20 to drivers outside the city.