Should I be a taxi driver or an Uber driver? Pros, cons and differences explained

‘Should I be a taxi driver or an Uber driver?’ This is a question on the lips of many budding taxi drivers looking to earn a comfortable living from ferrying passengers from A to B. The truth is, there is a distinct difference between working as a fully-fledged taxi driver and an Uber driver.


That’s why we’ve put together this article to put you firmly in the picture and debunk any industry myths so that you can make an informed decision about your future driving career. 


We’ll cover the differences between taxi and Uber driving, their pros and cons, whether you can work for both, and what you’ll need in order to sign-up for taxi insurance.


What is the difference between a taxi driver and an Uber driver?


Taxis have been on the world’s streets since the early 19th century. By contrast, the concept of Uber has only existed since 2010. The biggest difference between taxis and Uber vehicles is that taxis must be hailed either from a taxi rank or booked well in advance.


In the UK, taxis can either be Hackney carriages or a private hire vehicle. The latter is only legally permitted to pick up pre-booked passengers, while Hackney carriage permit holders only pick up passengers from the roadside and cannot make pre-arranged bookings.


There’s no doubt that Uber drivers have angered Hackney carriage drivers in London. That’s because Uber drivers are required to have a private hire licence from Transport for London (TfL), putting them in direct competition with black cab taxi ranks. And as a result, many black cab drivers feel they are being left on the scrapheap by apps like Uber. However, the High Court recently ruled against a challenge made by London’s Hackney carriage drivers.


London’s black cabbies challenged Uber’s operating licence in London, with the court’s senior judges throwing out claims of “actual or apparent bias” towards Uber’s ride-sharing app.


There’s no denying that Uber really has streamlined the process of hailing a cab. Instead of simply walking down a busy street and trying your luck with finding a free taxi, travellers can digitally ‘hail’ a taxi using the Uber app and wait at their starting location. The other challenge Hackney carriage drivers are facing in big UK cities such as London is that Uber drivers are able to undercut their per-mile day rates.


Jurys Inn recently undertook a study that looked into the average cost of Uber day rates compared with black cabs. It found that Uber’s day rate in the capital was almost half the price of a Hackney carriage. So, does this mean that Uber drivers make more money than taxi drivers? That’s difficult to say, but one thing an Uber driver can rely on is volume of passengers over a smaller number of profitable bookings for black cab drivers.


The rise of Uber


The ride-sharing app of Uber was born in San Francisco’s Silicon Valley. Citing affordability and convenience for passengers, Uber has since spread to more than 600 major cities around the world. The saying “calling an Uber” is now as commonplace as “hailing a cab”. In the early days, Uber sought to attract private hire drivers to use the app by committing to taking only a small percentage of their drivers’ earnings. It also heavily subsidised new passengers, too, offering cut-price fares to ramp up its worldwide interest.


In the UK, Uber’s remarkable emergence has been met by fierce protestations from taxi drivers, particularly in London. In fact, public pressure saw Uber lose its licence to operate in the capital back in October 2017, with TfL claiming the company was unfit to hold a licence on the grounds of safety. However, in June 2018, a London judge overturned the ban, enabling Uber to return to operation in London under a 15-month conditional licence.


In London, roughly 45 000 drivers work for Uber compared to roughly 24,000 black cab drivers. So, is it simply a case of evolve or die? If you can’t beat them, join them?


The pros of being a taxi driver


You’ll get passengers of all age demographics


It’s well known that the typical Uber passenger is aged 30 and under. The millennial generation include those that are most fascinated by the concept of Uber. If you are someone who likes meeting different people of all ages and from varying backgrounds, you can’t beat being a taxi driver.


From taking an elderly 75-year-old woman to visit her grandchildren to picking up 45-year-old executive professional from their last business meeting, the variety is appealing.


Your knowledge and driving skill come to the fore


Uber drivers rely solely on their GPS built into their Uber app. This doesn’t require them to have any prior knowledge of neighbourhoods or any possible short-cuts that can get passengers from A to B without unwanted traffic congestion. As a taxi driver, you can rely more heavily on your knowledge and awareness of local routes and keep that GPS firmly in the background for emergencies only.


Being part of the taxi rank camaraderie


There’s something to be said for being part of the traditional taxi driver union. The rise of Uber has created a kind of “them against us” mentality among traditional taxi drivers, leading to camaraderie and spirit among the taxi fraternity that you simply don’t get with Uber.


Taxis still offer a more personal experience than an Uber


Building on the personal angle of being a taxi driver, the Uber experience is far more impersonal. Uber drivers are merely a name at the top of a smartphone screen rather than a human being. Taxi drivers tend to offer a higher-quality, more personable service, while Uber drivers are more focused on the volume of journeys as opposed to the quality of service they provide.


Cons of being a taxi driver


You might be beaten by price


As we’ve already alluded to, the likelihood is that taxi drivers are going to be more expensive than most Uber drivers. That’s because the Uber app undercuts the day and night rates set by each local council.


The wait at the taxi ranks can be a long, hard slog


If you are a taxi driver that relies solely on passengers hailing your services from a taxi rank, you’ll likely need the patience of a saint. Some evenings can be long and tiresome while you sit stationary at the rank waiting for a potential passenger.


You aren’t covered by Uber’s taxi insurance policy


Taxi drivers have to sort their own specialist taxi insurance out for themselves. Uber drivers get access to a Partner Protection policy that allows them to claim for on-trip accidents as well as off-trip life events.


Pros of being an Uber driver


Pick up passengers in your proximity


As Uber’s app is a location-based platform, when a passenger requests a lift in your proximity, you will be alerted to the available job. This helps to cut down on vehicle emissions and keeps waiting times for passengers to a minimum. Ultimately, for Uber drivers, this means a more convenient working day.


Convenient, cashless system


Uber drivers don’t have to worry about handling cash and change. Uber’s users pay for their journeys via the app. This digital cashless system is useful for drivers, allowing them to cash out their earnings several times a day if they so wish. Just remember that Uber does take a cut of your fee.


Flexible working hours to suit you


If you’re thinking of becoming a taxi driver to earn a second income, being an Uber driver could suit you down to the ground. You’ll be able to choose your driving destinations and working hours to suit your work-life balance around your main job and family.


Ability to ramp up rates for in-demand hours


Uber does allow its drivers to increase their rates for periods of high demand. Whether this is rush-hour, at the end of a major music concert or sporting event, or any other big occasion. Often, these rates are still cheaper than some taxi drivers.


Cons of being an Uber driver


You may need to work unsociable hours


While some taxi drivers are able to take off public holidays such as Bank Holidays, Uber drivers may not be quite so fortunate; particularly those that use Uber to supplement their primary income. Bank Holidays and late nights at weekends can be the most profitable hours to work for Uber drivers.


At risk of unfair Uber ratings from passengers


Uber drivers are rated by their passengers via the app at the end of each journey. You can be very unlucky and find a spiteful passenger that gives you a poor rating, resulting in your average rating declining and making you less acceptable to future Uber passengers. Worse still, low Uber ratings can lead to Uber de-activating you from their platform.


Accepting some Uber lifts can be dangerous at times


Driving late at night for Uber can result in you driving into some potentially dangerous areas and neighbourhoods. You’ll need to be prepared to deal with rude, drunk and even aggressive passengers.


Can you work for Uber on the side?


Absolutely. Providing that you have a legitimate licence to work from your local council, you can work as little or as often with Uber as you like in your spare time. The beauty of app-based taxi services like Uber is that you have ultimate flexibility; you can be your own boss.


How much do Uber drivers earn compared with taxi drivers?


According to The Telegraph, London’s Uber drivers typically earn £11 per hour, which is 80p more than the London Living Wage. However, this is actually £4 an hour less than what Uber claims London’s Uber drivers can earn before driver costs such as fuel and licensing.


Remember, Uber now takes a 25% cut of the majority of rides accepted via the app, which is why some unions have insisted that being a taxi driver is still the best policy as you can keep 100% of your fare.


Which type of driver should you be?


A career as an Uber driver does at least offer a base level of day-to-day work. Drivers working in big cities can be sure of regular journeys coming through the app, while every day is different for taxi drivers sitting at a rank.


Uber may be more suited to drivers looking for a side income, where they can take full advantage of “surge” fares that give drivers 80% of the fare, regardless of the price, rather than 75%. By being selective and picking and choosing your working hours with Uber, you can maximise your income.


Being a taxi driver, picking up regulars and being a part of passengers’ everyday lives is an enriching experience. If you really do want some guaranteed work, consider incorporating Uber into part of your working day rather than relying on it for your primary income.


Protect your livelihood with specialist taxi insurance


If you choose to become a fully-fledged taxi driver, looking after your vehicle is of paramount importance. After all, it’s your all-in-one business premises. Perhaps you don't want to be an Uber driver or a taxi driver and want to learn more about other ride hailing apps?


It’s true that taxi insurance premiums tend to be higher than conventional car insurance premiums due to the nature of a taxi driver’s work. However, at Taxi Insurer, we have a broad panel of insurers that can offer a taxi insurance policy to suit your needs and budget.


Whether you’re seeking cover on an individual basis or taxi insurance to protect an entire fleet of vehicles, Taxi Insurer makes it easy to get taxi insurance quotes at the touch of a button. Just make sure you have the following details to hand:


  • Taxi licence details
  • Contact information
  • Vehicle registration number
  • Driving licence


Becoming a taxi driver? Protect your livelihood with The Taxi Insurer and get quotes from some of the leading specialist taxi insurance firms across the UK.