Wakefield Council's plans to tighten rules for taxi drivers have been branded "pointless" because of government deregulation of the industry.
The local authority wants to make it harder for cabbies with a criminal conviction to get their licence back, while it also intends to raise standards for English tests drivers have to take.
But a law change in 2015 means that cabbies need just one council to grant them a licence, which can then be used anywhere else in the UK.
It's led to reports earlier this year that drivers are flocking to Wolverhampton to be granted permission to operate, because their standards are supposedly more relaxed and the application process is cheaper than elsewhere.
Now, council staff have said the law has left them powerless to investigate any possible wrongdoing committed by taxis who are licensed outside of West Yorkshire and York, even if they are operating in the Wakefield district.
The chair of Wakefield's licensing committee, Coun Martyn Johnson, said that toughening regulation was part of efforts to make the rules consistent across West Yorkshire and York.
But in response, his deputy Coun Yvonne Crewe said: "That's all well and good, but they (taxi drivers) are not going to other West Yorkshire authorities for a licence.
"They're going well out of the district.
"We (members of a licensing sub-committee) got threatened by one driver that if we didn't give him a licence, he'd just go elsewhere.
"One operator said he'd just take them all to Wolverhampton. It really worries me."
Council licensing officer Kevin Straw said that although police could search vehicles regardless of where their licence was from, the local authority did not have the same powers.
He added: "If the licence concerned was Leeds, then we could take action.
"We share enforcement action as far as we can across West Yorkshire and York, but not further afield.
"We're limited in what we can do."
Conservative councillor Nick Farmer responded: "This (proposals on tighter regulation) is all pointless then isn't it?
"If they're all just going to go to Wolverhampton, what's the point?"
Mr Straw replied: "Well I wouldn't be particularly happy if the council didn't have its own convictions policy."
A 10 week consultation has now started on the local rule changes, where members of the public and cabbies can all express their opinion.
The Wakefield Private Hire and Hackney Carriage Drivers Association criticised the plans last week and claimed that the industry in the district is already "over-regulated".
Should the new policy come into being, drivers' previous good record or character would have no effect on any attempt to get their licence back after a conviction.
This is contrast to a court of law, where defendants who've committed all types of crime have mitigating factors taken into account when they are sentenced.