Licensed taxi drivers have told the current affairs programme Week in Week Out that not enough is being done by the local authority to combat the problem.
Many fear it will take a serious incident to spur into action those who hold the power to crack down on the illegal trade.
However, Swansea Council – which is in charge of regulating more than 600 taxis – said it was satisfied that it was doing enough to combat the problem.
One of the firms highlighted by the programme, which is broadcast on Tuesday, is Citytax, based in Swansea.
The firm describes itself as the city’s longest-established private hire company.
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 The way I see it, it is going to take a serious incident for the local authority and the police to sit up and take notice  Bob Hoyles, National Taxi Association
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The programme reveals that, as well as employing licensed taxi drivers, it has taken on some people to drive mini buses and black cabs who have not been authorised by the council.
One former employee, who wanted to remain anonymous, explained how she was hired with no checks at all.
“I phoned them on the Thursday, and I was told I could start on the Friday,” she said.
“I was given the keys to an eight-seater minibus and told to be on my way.”
She said that when she drove the mini bus, it was used a taxi – which is illegal without a taxi licence.
In a statement the company’s owner, John Grey, said he was unaware of any incidents involving unlicensed drivers.
‘Long sentence’
The dangers of using an unlicensed taxi are spelled out in the programme by solicitor James Button, one of the UK’s leading experts on taxi law.
“The driver could be anybody,” he said. “He could be perfectly fine, but he could equally be somebody who has just come out of prison after serving a long sentence for serious convictions”.
The licensed taxi drivers in the city believe not enough is being done to combat the cowboys.
Several told the programme how they regularly passed on details of unlicensedl drivers and vehicles to the council, but felt little was being done.
“The way I see it, it is going to take a serious incident for the local authority and the police to sit up and take notice of what is actually going on,” said Bob Hoyles of the National Taxi Association.
Swansea Council has brought 16 prosecutions in the past year.
“I think any complaints that are made to the council, we would investigate,” says Dave Daycock, head of legal services.
“Certainly, if the evidence that we have was of sufficient quality, we would certainly bring prosecutions.”
Since the programme raised the issue, the authority has launched a “safer taxi” campaign in the city.
Week In Week Out is broadcast at 2235 BST on Tuesday on BBC Wales.