This year, more than 6,000 private hire taxi licences were issued by Wolverhampton City Council, up from less than 1,000 in 2014.
Of the 6,395, however, it has emerged that 5,319 live elsewhere.
Taxi drivers in the area have said that the Council has given out too many licences and that the authority is too lenient on tests.
The 2015 Deregulation Act allows drivers to operate anywhere in the country, regardless of where they get their licence.
Recently, the local Council also dropped a test assessing understanding of the local road map.
In 2014, when 953 licences were issued, 800 of those lived in the city and 153 were from elsewhere. A vast contrast to the new figures, released following a Freedom of Information (FoI) request.
Wolverhampton council charges £225 a year for a private hire licence. Walsall Council charges £102 in comparison, Stafford £175, £153 in Sandwell and £306 in Dudley.
Taxi drivers are calling for a limit on the number of licences handed out.
They say that even though any of the licences are issued to people who work outside of Wolverhampton, there are still too many operating within the city.
“We have been saying this for years now – there are too many drivers coming here from outside the city, its damaging our trade,” said Amrik Singh, a hackney carriage taxi driver with 25 years experience.
“But for the council it just means more more money. We need a limit to protect our trade,” he added.
Councillor Alan Bolshaw, chairman of the council’s licensing committee, said, “City of Wolverhampton Council is widely regarded as having one of the most efficient and streamlined private hire licensing application operations in the country.
He continued, “We have utilised new technology to provide an online platform enabling us to provide a much faster turnaround of licence applications than many other areas.”