There was a call to introduce new rules for renting limousines, wedding cars and hearses.
Wrexham Council has also proposed installing CCTV and tracking equipment in taxis after alleging that current legislation is “inappropriate” for licensing taxis and private rental vehicles.
The Welsh government is advising reforms to the system after ministers raised issues with inconsistent standards and the inability of the authorities to exchange protective information.
In their response, the Council Presidents said technology would help improve records.
They said: “The existing legislation is archaic, ineffective and requires fundamental reform with new primary laws.
“The panel believes that, ideally, records should be kept for every trip taken. There are obvious practical difficulties with this approach, however.
“A better option would be to use technology to improve protection processes.
“The use of CCTV, trackers and GPS systems would not only represent a more robust system for recording, but would also not impose any administrative effort on the taxi drivers
“The cost of installing video surveillance in licensed vehicles, especially for small businesses, may require subsidies from the Welsh government.”
The government has made several proposals to transform the system, including transferring the licensing powers of the 22 local authorities in Wales to a single national authority.
However, the Council has objected to the possible loss of local enforcement controls.
It said this would result in more than £ 150,000 a year in income loss for the agency, which could lead to the property being used by its licensing department being scrutinized.
They said: “We do not support the proposal on the information provided as there is no evidence that the existing licensing function for taxis and private rental vehicles needs to be diverted from the local authorities.
“At this point in time, this White Paper does not contain any details on how the Joint Transport Authority would perform the licensing function.
“Our primary concern is the protection of the public and there is nothing in this proposal to suggest that public safety is at the forefront of this proposal.”
The Council’s draft reply will be discussed by the members of the Environmental Permitting Committee on Monday 25 March.
