Could you make more money as a taxi driver in a different city? Here’s a quick guide to some of the potentially highest paying cities in the UK, do any of them look attractive for your taxi business?
Attracted by the flexible hours, independence and the chance to earn some decent money, there are just over 330,000 people working as taxi or private hire vehicle (PHV) drivers in the UK in 2022. But those numbers are still down when compared to pre-pandemic levels, with many drivers leaving the industry to take up other careers.
In this guide, you’ll not only find out how much taxi drivers can earn, we will also answer key questions, such as:
- How to boost your earnings
- Which cities are the highest paying when it comes to taxi driving
- How much you could earn if you turned to Uber
We’ll also discuss how important it is to have the right insurance for taxis.
What’s the average salary for a taxi driver in the UK?
According to the National Careers Service, the average annual salary for a taxi driver in the UK is between £14,000 and £30,000 based on a typical 41 to 43 hour working week. But other salary surveys and jobs sites paint a slightly different picture and are well worth taking into consideration. For example:
- Job site Indeed claims an average salary of £30,658 based on 188 reported salaries.
- Glassdoor claims that with a low of £16,000 and a high of £51,000 giving an average salary of £28,248 based on 51 anonymously submitted salaries.
- Talent.com claims that with a low of £26,000 and a high of £46,800 the average salary of a taxi driver in the UK is £34,248 based on 291 reported salaries.
- Check-a-Salary claims a minimum salary of £18,720 and a maximum salary of £50,000, giving an average salary of £31,223. Although on its own figures, London is the only city that has an average salary above that, with many below.
- PayScale estimates an average salary of £19,733 with the bottom 10% of drivers earning £12,000 or less and the top 10% earning £39,000 or more.
- Adzuna reports the average annual salary of a taxi driver as £28,539.
But be aware, research into salaries for taxi drivers can sometimes come up with strange results. Back in 2019, cabbies in Stoke-on-Trent were surprised to find they were among the nations most well-paid drivers earning an average salary of over £50,000 – a figure very few of them recognised as being anywhere near reality.
As you can see, the ‘average’ salary for a taxi driver in the UK can vary and be affected by a wide range of factors. Let’s take a closer look.
What factors affect a driver’s earnings?
For anyone looking to get into taxi driving you’ll want to know how much it pays. There are many different factors affecting how much a taxi driver takes home each week, making it very hard to put a precise figure on earnings.
Some of these factors are within your control and some are not. Circumstances that can determine your salary include the following.
Customer demand
During the Covid-19 pandemic, as customers became few and far between, many drivers opted to change careers. However, as the country has opened up again, rising customer demand has been met by driver shortages in some areas, creating both challenges and opportunities for those drivers still in the game.
If you’re working in an area where demand is outstripping supply then this could be good news for your bottom line. Equally, if you’re in an area where there are too many drivers to meet the customer demand then you might find it difficult to earn a decent wage.
Wondering which areas could be good for taxi business? Research from the Taxi Centre suggests the North East, North West and West Midlands are the regions with the biggest shortage of taxis per head of population.
Cost of fuel
As a professional driver, fuel is going to be one of the largest drains on your finances. But quite how big will depend on many factors including:
- How many miles you cover.
- The type of roads you’re driving on.
- The way you drive.
- How much fuel your vehicle uses per mile.
- The current cost of fuel per litre in your area.
That said, there are plenty of ways to reduce your fuel bill and stay profitable. Our list of 23 ways to save on fuel includes details of fuel-efficient driving techniques and a whole lot more.
For lots more ideas on how to cut the cost of living as a taxi driver, you’ll also want to take a look at this recent Taxi Insurer article. From checking your breakdown and insurance for taxis to how to save money on coffee and sandwiches, why not try a couple out and see how much you can save?
Vehicle repairs
Whether bumps and scrapes or wear and tear, if your car is on the road all day then there are bound to be repairs that need to be made.
Vehicle reliability is also a big factor here, so opting for a tried and trusted manufacturer should mean less days spent off the road in the garage.
As well as maintenance and repair costs, you’ll also need to take into account MOT and service costs. Some local licensing authorities also require vehicle inspection testing, so you’ll need to pay an additional fee for that.
Licence fees
Driving licence fees and vehicle licence fees for taxis and PHVs will be an ongoing expense. Check your local council’s website for current prices.
To find out the licensing authority for your area, simply enter your postcode into the government’s online checker. Be aware, each council will have slightly different procedures for applying for a licence and different fees to be paid.
For examples, to find out what procedures you might need to go through and the fees you need to pay, read our recent article on how to become a taxi driver and our 10 reasons on why you should become a taxi driver.
Cleaning costs
Keeping your vehicle clean both inside and out is part of the regular maintenance routine to keep your car hygienic, safe, and in good working order. While you’ll probably do most of the regular cleaning yourself, you may want to opt for a professional deep-clean every now and again.
Insurance for taxis
Depending on your location, age and the type of vehicle you drive, insurance for taxis can get expensive. Contacting the helpful team at the Taxi Insurer will ensure you find the best value insurance for both your needs and budget.
Clean Air Zone fees
To improve air quality in cities and discourage the use of older, more polluting vehicles, many cities across the UK are now charging fees for drivers to drive within certain zones. Such zones include the Ultra Low Emission Zone (ULEZ) in London and Clean Air Zones (CAZs) in other cities.
Cabs in London may be exempt from the congestion charge but watch out if you have recently had your licence revoked or it’s expired.
Waiting time
Whether you’re driving a taxi or a PHV, you’re certain to spend part of your working day waiting around for work. You’ll also have to spend time getting to and from pick-up locations.
This can all add up to a significant amount of time, all of which is unpaid. So, in some areas where competition for fares is much greater, some drivers may have to work between 60 and 80 hours per week to earn a decent income.
Location
In some cities you can charge more for fares than in others. For more details on how much you could charge in some of the UK’s biggest cities refer to this recent article on how much a taxi costs per mile in the UK.
But this will still depend on the precise location in the city, day of the week, time of day, and whether there are any special events or holidays taking place. You’ll really need to refer to your local authority for more details.
Hours spent driving
There’s not always a big secret when it comes to why some drivers earn more. If you’re looking to earn over £30,000 a year then you’ll probably need to work long hours and work through late evenings, nights and weekends.
Unfortunately, it’s a fact of taxi driving for a living that long and unsociable working hours are often required to not only meet your expenses but also come out with a decent reward for your hard work.
Driving during peak periods
Focusing on driving during peak periods such as evenings and weekends can be the most financially rewarding. Although it is possible in busy areas of some cities to be able to pick up enough work during the day that you may not need to work nights.
Employed or self-employed?
Deciding whether to become employed or self-employed can have a big effect on your earnings. As well as being able to choose how many hours and where you want to work, being self-employed also lets you reduce your tax bill by claiming back some business expenses.
Many drivers start out by working for an established taxi firm as a contractor or employee before becoming self-employed later. For more on how to become a self-employed taxi driver, read our useful guide.
Taxi or PHV driver?
Another important choice that can affect how much money you typically make is whether you drive a taxi or a PHV. As a taxi driver you’ll get the majority of your work from hail-downs, while as a PHV driver it’ll mostly be pre-booked business.
Own or rent a vehicle?
Vehicles suitable for taxi or PHV work can be an expensive investment if you don’t already own one. If you do not own a vehicle and wish to hire one then you’ll need to take that cost into account.
Highest paying cities in the UK to be a taxi driver
As you can see, your potential earnings could vary hugely depending on a wide range of factors. But to give you an idea of some of the highest paying cities in the UK we took a look at what jobs site Indeed had to say.
Read on to find out the highest paying cities in the UK and a little bit more about working there.
Manchester
Potential salary: £46,526 per year
From the tireless engine of the industrial revolution to innovative testbed for urban developments, outside of the capital, Manchester has no rival. World beating football clubs, a thriving music and arts scene and incredible restaurants means there’s plenty to bring visitors into Manchester, so lots of business for taxi drivers.
Manchester has a two-tier system of fares based on the time of day. You can also charge extra for journeys starting or ending at Piccadilly Station taxi rank or the Manchester Airport Ground Transport interchange.
Birmingham
Potential salary: £40,769 per year
The second largest city in the UK with a population of over 2.5 million there’s an incredible mix of cultures here making it one of the country’s most cosmopolitan destinations. The enormous National Exhibition Centre (NEC) on the outskirts of the city is also a popular site for exhibitions and shows. While Birmingham’s nightlife is recognised as some of the best in the country.
In terms of taxi tariffs there’s a standard day rate, weekday night rate, weekend night rate, and one for the Christmas and New Year season.
London
Potential salary: £33,834 per year
London really doesn’t need any introduction. By far the largest city in the UK, the capital still dominates the national horizon in pretty much every area of life. And that includes taxi driving!
Working as a taxi driver in London will involve hard work and long hours, but generous peak tariffs and high customer demand means that London drivers are among the highest earners. That said, there are significant pressures on them, particularly due to the rise of ride-hailing apps like Uber.
To drive a black cab, you’ll also need to take the Knowledge test.
Newcastle
Potential salary: £28,563 per year
Newcastle is one of the fastest-growing and best places to work in the UK. And there’s a real sense of community in this close-knit northern city on the banks of the River Tyne.
Highlights worth pointing out to passengers include Anthony Gormley’s iconic Angel of the North, the Baltic contemporary arts centre, the pubs and clubs of Quayside, the Tyne Bridge, the castle and the cathedral. What an interesting place to earn a living from driving!
Cambridge
Potential salary: £27,647 per year
A great place to live and work, the small and picturesque city of Cambridge offers a wonderful balance between urban and rural areas. With a big student population, plenty of tourists and a range of big businesses in the area, there should be plenty to keep you busy.
For more details on becoming a taxi driver in the city visit the Cambridge City Council website.
Durham
Potential salary: £26,971 per year
Famous for its Norman cathedral, 11th Century castle, and university, Durham is an interesting and apparently lucrative place to work as a taxi driver. You won’t be stuck for something to say when ferrying passengers around this stunning northern city.
Glasgow
Potential salary: £24,226 per year
Glasgow was recently voted the second-best city in the UK by Conde Nast Traveller. And with world class museums and attractions, a vibrant music scene and friendly locals, it’s easy to see why. Could it be the next step in your taxi driving career?
Be aware that Glasgow, alongside the Scottish cities of Aberdeen, Dundee, and Edinburgh are introducing Low Emission Zones.
Five great ways to boost taxi earnings
Let’s face it, times are certainly tough for many people at the moment. So, if you’re looking for ways to boost your income, here are five quick ways to boost your earnings and keep in business.
- Pick the right time to work – Early morning airport runs, Saturday night pick-ups, big sporting and music events? Being in the right place at the right time can lead to a customer bonanza for you.
- Encourage tipping – Offering great service, safe driving and a friendly but polite demeanour are all ways to leave a good impression and make a tip more likely. For more details on taxi tipping there’s a great Taxi Insurer guide.
- Develop a taxi specialism – From school runs and hospital visits to food delivery and executive transfers, there are many lucrative ways to expand your business beyond the usual pick-up and drop-off. Take a look at our guide to taxi specialisms for more guidance.
- Take care of your regulars – Regular customers means a steady income and often a decent tip, so make sure to take extra special care of them. Keep a stack of business cards in your taxi to encourage repeat business and help spread the word.
- Cut your costs – We’ve already mentioned there are plenty of ways to cut the costs of doing business as a taxi driver. And remember, whatever money you save on costs means more for your pocket. If you’re looking for ways to cut the cost of insurance for taxis then be sure to give the Taxi Insurer a call. We’re specialists at finding you the best deal.
Could you earn more money as an Uber driver?
Just as with taxi driving, how much you earn with Uber will largely depend on your location and how many hours you’re prepared to work for. And if you’re canny enough to hit those peak periods, then you could be on to a nice little earner.
In our recent article, ‘How much do Uber drivers make?’ we discovered that drivers tend to earn around £15 an hour, which equates to an annual salary of around £20,000. However, Uber drivers in big cities can earn more, so it’s worth contacting Uber directly about earning potential in your local area.
Whether or not you could earn more as an Uber driver is a difficult question to answer. After all, a busy Uber driver is likely to earn more per day than a taxi driver with very few customers. Just as a busy taxi driver would probably earn more than an Uber driver in an area where there isn’t much demand.
Stay protected with specialist insurance for taxis
Working as a taxi driver is a great option for many people, particularly if you already have a vehicle that’s ready for business. With that in mind, you’ll want to protect your car with specialist insurance for taxis.
Insurance for taxis like yours is easy to find at the Taxi Insurer. We’ll do all the leg work for you! Get a quick quote to suit your business needs by contacting the team today.
Frequently asked questions
Is taxi driving profitable in the UK?
Taxi driving in the UK can be a profitable venture for those who are willing to put in the time and effort. With the rise of ride-hailing services like Uber, there is a growing demand for taxi services across the country. However, it is important to note that profitability can vary depending on factors such as location, competition, and operating costs.
Should I drive Uber or be a traditional taxi driver?
Both options have their pros and cons, so it ultimately depends on your preferences and circumstances. Uber offers flexibility and the opportunity to be your own boss, allowing you to work whenever and wherever you want.
However, becoming a traditional taxi driver can provide stability and job security, as well as the potential for higher earnings during peak times. Ultimately, it's important to weigh the benefits and drawbacks of each option before making a decision that suits your lifestyle and goals.
Do taxi drivers own their cars?
In many cases, taxi drivers do not actually own the cars they drive. Instead, they lease or rent them from a company or individual. This arrangement allows drivers to have access to a vehicle without the financial burden of purchasing one themselves. So, while the driver may be the one behind the wheel, it's not uncommon for them to be driving someone else's car.
Best locations to pick up customers as a taxi driver in London?
One of the prime areas to find passengers is in the bustling city centre, particularly around popular tourist destinations like Oxford Street, Covent Garden, and Trafalgar Square. These areas are always teeming with people, both locals and tourists, who are in need of a ride. Furthermore, busy commercial districts like Canary Wharf and the City of London are frequented by office workers who often require taxis for their daily commute or business meetings.
Best locations to pick up customers as a taxi driver in Manchester?
Manchester Piccadilly train station sees a constant influx of commuters, tourists, and business travellers. With its central location and excellent transport links, it's a hot spot for taxi pickups. Another great spot is the Trafford Centre, a popular shopping destination with ample parking facilities, making it convenient for customers to hop into a taxi after a long day of shopping.
Additionally, areas with high footfall such as the Northern Quarter and Deansgate are also prime locations to pick up customers, as they are bustling with bars, restaurants, and entertainment venues.
Best locations to pick up customers as a taxi driver in Newcastle?
As a taxi driver in Newcastle, it's important to know the best locations to pick up customers and maximise your earnings. One of the top spots is undoubtedly the city centre, around popular attractions like Grey's Monument and St. James' Park. These areas are always bustling with tourists and locals alike, ensuring a steady stream of potential fares. Additionally, the Quayside area with its vibrant nightlife scene is another good area for taxi pickups, especially during weekends and evenings.