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The first horseless cab, the Bersey electric powered vehicle, appeared in 1897, followed by the first internal combustion engine cab in 1903. At that time London still had more than 11,000 horse drawn cabs. The last horse drawn cab was removed from service in 1947. There are now over 20,000 licensed vehicles on London's roads.

Regulation of the trade passed to the Metropolitan Police in 1850 and was undertaken by the Public Carriage Office, which was originally located in an annex to New Scotland Yard in Whitehall called "the Bungalow". It moved to 109 Lambeth Road in 1919, remaining there until 1966, when it moved to its present home, 15 Penton Street, Islington.

On the formation of Transport for London on 3 July 2000, the licensing authority changed, however the day to day licensing function remained with the Public Carriage Office.

With the introduction of the Private Hire Vehicles (London) Act 1998 the role of the PCO has extended to include the licensing of private hire operators, drivers and vehicles, bringing the capital in line with the rest of England and Wales. The purpose of regulation is to give passengers confidence, when they use a licensed private hire operator, that they are dealing with an honest, professional organisation with reliable drivers and safe vehicles.

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