Taxi use for medical travel will now be restricted to exceptional, evidence-based cases, such as physical disability, pregnancy, or serious illness, requiring direct Home Office approval.
This policy change follows a BBC investigation into "widespread" taxi use and aims to save taxpayer money by introducing alternatives like public transport.
All service providers are mandated to cease using taxis for these medical journeys from February.
The measure is part of a broader overhaul of the asylum system, which includes making refugee status temporary and increasing payments for voluntary returns.