A minicab firm in Rochdale has admitted to offering customers the option to book a white driver on request.
The company made the service available after two local drivers of Pakistani origin were jailed for involvement in trafficking and raping young white girls in the area.
Stephen Campbell, the manager of Car 2000 which operates in Heywood in the Greater Manchester borough of Rochdale, told The Guardian that following the scandal many white customers began to ask for white drivers – or "local drivers" as they referred to them.
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"We have had quite a lot of customers requesting what they call a 'local' driver," he said. "A bit insane if you consider that most of the [Asian] lads were born in Rochdale. But it's a business and we have got a duty to do what the customer asks us to. I don't think we can discriminate against the customer in the same way. It is a business at the end of the day. We have a large bank loan to pay back."
Car 2000 took over one of the minicab companies at the centre of the scandal, Eagle Taxis. Two drivers from the now defunct firm were among nine Asian men jailed for their involvement in the crimes.
Since the convictions, there has been a spate of racial incidents against drivers in Rochdale, including assaults and threats with knives.
Simon Danczuk, the MP for Rochdale, told the Guardian: "This is extremely worrying and a stark reminder of the impact that grooming scandals have had on northern towns. This will not be a problem exclusive to our borough, I'm sure."
According to Rochdale Borough Council, the "white drivers on request" policy does not contravene the terms of holding a minicab licence.
Mark Widdup, the director of economy and environment at the council, said: "This appears to be a decision made by the company and there is currently nothing in the conditions of their licence which state that they cannot operate such a policy."