We also have a similar problems with taxi (and short-distance private mass transport) licences here in Turkey. However, we have learned a lesson from our history and solved medium-distance bus licensing problem, with a very thorough regulation (taxis and short-distance privately owned buses still are a problem, though):

  *Suburban and rural passenger transport on a route, within the same province regardless of distance, or shorter than 100 kilometres without regards of provincial boundaries, count as medium-distance mass transportation.
  *Those medium-distance bus licences are tied to vehicle and non-transferable.
  *Medium-distance bus owners have to get a licence called D4, which is similar in shape to a European intercity bus company licence, however, subject to a more stringent regime. I am going to explain that below.
  *A D4 licence is primarily intended for end-to-end and end-to-mid transportation. Up to 12 such vehicles is allowed to be registered to each such licence.
  *In case that there are multiple overlapping such routes, shorter route takes the precedence of transporting inside the common section. For example, if you want to go from B to C, and there is a medium-distance bus covering B-C route, and one covering A-B-C-D route, the latter cannot accept you (you could also think of this as a mandatory gentleman's agreement). However, if you want to go from B to D, you can take the latter without requiring a transfer in C.
  *D4 licences have their passenger capacity strictly regulated, such that you cannot have more vehicles than that, 100% demand at least one week's worth of trips each year, and 80% demand in average throughout the validity of the licence.
  *D4 licences are reviewed thoroughly during renewals as if you get afresh. It takes approximately two weeks to process a D4 licence application (one week in the provincial transportation coordination centre, one week in the national D4 coordination centre).
  *Those medium distance buses are usually operated by private operators, and allowed to enter the city centers more freely than long distance buses, subject to the restrictions above.