Only a small fraction of the new licence holders are operating in the city, with some drivers working hundreds of miles away in Scotland.
Applications from Kilmarnock, Edinburgh, Perth and Kirkcaldy were received by Wolverhampton Council last year, as the authority granted 15,171 licences to extend its dominance over the British private hire market.
The data was provided in a Freedom of Information request.
It showed that in 2019 a total of 11,461 applications to Wolverhampton Council came from drivers based in Birmingham, while there were 2,457 from Manchester, 1,926 from Coventry, 1,279 from Leicester, 1,102 from Nottingham and 432 from Telford.
In the last five years the city council has received applications from 325 miles away in Perth – a six-hour drive from the city, and 254 miles away in Truro, Cornwall, which takes almost five hours to get to by car.
It has granted 35,035 private hire licences since 2017, pumping £8.7m into the authority’s coffers.
The overall figure for last year was up 25 per cent on 2018, and represented an 18-fold increase on the 833 licences the authority handed out in 2015.
In that year a change in the law allowed private hire drivers to operate in a different area from where they obtained a licence.
It prompted licensing bosses at Wolverhampton Council to streamline its application process and slash the prices of licences – leading to a dramatic increase in applications.
However, the authority’s dominance of the market has not gone down well with other councils, some of which have seen their own private hire applications plummet.
In 2018-19 Birmingham Council issued 1,768 private hire licences, down 11 per cent on the previous year. It currently has 4,461 drivers licensed.
Meanwhile Walsall Council received just 48 new applications for licences last year, when it had a total of 1,129 private hire drivers registered. The authority’s total income from private hire and Hackney Carriage licensing was £157,482.
Over the same period Wolverhampton Council had 1,018 applications from private hire drivers based in Walsall.
A new report to Walsall’s director of public health has outlined concerns over dwindling application numbers.
Councillor Mike Bird, the leader of Walsall Council, said he favoured a change in legislation as the current system was "making a mockery" of local authority licensing laws.
"Wolverhampton Council has cornered the market, but you have to question whether it is right that a driver can get a licence there but ply their trade hundreds of miles away," he said.
Concerns have also been raised over passenger safety. Lib Dem campaigner Ian Jenkins, said: "The council has turned a vital safety check into a cash cow.
"We need to support the private hire trade in the city and not turn ourselves into a taxi version of Gretna Green.
"It just seems like the budget line comes first above everything."
Wolverhampton Council has always defended its position, stating that it oversees enforcement operations all over the country, and that any profits it makes from licensing are ploughed back into the scheme.
Councillor Alan Bolshaw, the city’s licensing chief, said: "Councillor Bird seems to have come quite late to the party.
"There have been several consultations about the private hire trade and he appears to be playing catch up. His contribution to the debate is welcomed as much as anybody's."