The terms 'taxis' and 'private hire vehicles' are often used interchangeably, leading to a common misunderstanding that these two types of passenger vehicles are the same. A taxi is available at any time whereas a private hire vehicle has to be pre-booked in advance.


There are a variety of differences in their operation, licensing, and even insurance requirements. In this article, we'll unravel these distinctions, providing you with a thorough understanding of the difference between taxis and private hire vehicles in the UK.


The basics of taxis and private hire vehicles


Understanding taxis


Taxis, also referred to as hackney carriages, have been an integral part of the UK's public transportation system for centuries. They are easily identifiable due to their distinctive roof sign, taxi licence plate at the back, and an identification card displayed on the front windscreen.


Taxis offer versatile hiring options. You can flag one down on the street, hire from a taxi rank, or even pre-book for a journey. They operate on a meter-based fare system, regulated by the local council. This system ensures the fare correlates with the distance travelled, with the possibility of agreeing on a fixed fare for long-distance rides.


Understanding private hire vehicles


Private hire vehicles (PHVs) offer a different kind of service. They must always be pre-booked through a licensed operator or ride-hailing app. This rule is strict, and it's illegal to pick up passengers without a pre-booking.


Unlike taxis, PHVs don't have meters. Instead, fares are agreed upon in advance, eliminating any surprises when the journey ends. This pre-agreed fare cannot be exceeded, ensuring transparency and fairness in pricing.


PHVs are often associated with ride-hailing platforms like Uber and Bolt. These platforms have introduced a new level of convenience and flexibility into the private hire industry. Despite these innovations, PHVs must still abide by all private hire regulations, including the requirement for appropriate insurance.


Regulations and licencing for taxis and private hire vehicles


Taxi regulations


Taxis, owing to their ability to be hailed on streets and operate from taxi ranks, are subject to stringent regulations. They must adhere to fares set by the local council and are required to offer access for at least one wheelchair.


Learn more about the rights of taxi drivers through our blog. or identification purposes, taxis display a white plate attached to the rear of the vehicle, a tactile plate inside the door, and a vehicle badge inside the vehicle, all showing the licence number.


Private hire vehicle regulations


A private hire driver conversely, cannot operate from taxi ranks or be hailed on the street. All bookings must be made through a licensed operator.


They're identifiable by a yellow door sticker and a yellow plate attached to the rear of the vehicle, both displaying the licence number. Additionally, a badge with the vehicle number is displayed in the windscreen.


Differences in insurance


Taxi insurance


Both taxis and private hire vehicles require hire and reward insurance, which is a specific type of insurance for vehicles carrying passengers in exchange for money. Standard motor insurance, known as social, domestic, and pleasure, does not cover drivers while carrying passengers for a fare.


Protect your business and renew your taxi insurance with Taxi Insurer today! Call one of our friendly insurance specialists on 0192 645 4929 or click here to get a quote.


Private Hire Vehicle Insurance


Private hire vehicle insurance is similar to taxi insurance, but it's designed specifically for drivers carrying out pre-booked journeys. The cost of insurance can vary based on factors such as the driver's age, driving record, type of vehicle used, and past claims history.


Fare pricing and earnings


Taxi fare pricing


A taxi driver will operate on a metered pricing system, with fares set by the local council. The meter calculates the fare based on the distance travelled. For long journeys, passengers may negotiate a fixed fare upfront.


Private hire vehicle fare pricing


Fare pricing for a private hire car differs significantly from taxis. As mentioned, fares are agreed upon in advance, providing passengers with certainty about the cost of their ride. With the advent of ride-hailing apps, passengers now receive a quote before booking a journey, further ensuring transparency in pricing.


Earning potential: taxi drivers vs. private hire drivers


Taxi in traffic late at night

The earning potential for taxi drivers and private hire drivers varies, mainly due to the differences in their operational rules.


Earnings for taxi drivers


Taxi drivers' earnings are somewhat regulated, seeing as the council sets the fares. Drivers cannot charge more than the amount showing on the meter at the end of the journey, unless the journey ends outside of the council area. In such cases, the fare should be agreed upon with the passenger beforehand. Find our ultimate guide to the best earning cities in the UK.


Earnings for private hire drivers


Private hire drivers, on the other hand, have a greater degree of control over their earnings. Their income largely depends on how and when they work. By driving for a private operator or ride-hailing platform, they can often enjoy additional benefits that help maximise their income.


What does the term 'hackney carriage' mean?


It's none other than the iconic black cab, a quintessential symbol of British culture. These vehicles are licensed to 'ply for hire', meaning they can pick up passengers from the street without requiring a prior booking.


Common-use for a London taxi driver, the term 'hackney' is believed to originate from a village in London where horses were raised, a nod to the carriage's historic roots. So next time you hail a black cab in London, remember you're not just hopping into any taxi, you're stepping into a piece of British history!




While they may seem similar, the operational rules, regulations, and even insurance requirements for these two types of vehicles are distinct.


By understanding these differences, passengers can make informed choices about their travel options, and drivers can choose the working model that best suits their needs.