THE EARNINGS DIVIDE: London taxi and private hire drivers compare their hourly earning targets
London’s ground transport scene has long been defined by its iconic black taxis, but an influx of private hire drivers in the last decade utilising popular apps like Uber and Bolt, has brought intrigue around earning potential on both sides of the divide.
Wizann’s recent video, hosted by taxi fleet owner Paul Byron, features discussions between a London taxi driver and a private hire vehicle (PHV) driver, who outline the financial opportunities and limitations within their respective sectors.
A key focus is the comparison between the earnings of a licensed black cab driver and PHV driver. The debate revolves around how much each driver can expect to make on a typical working day or night, as well as what influences these earnings.
Average Earnings for Taxi Drivers
According to the insights shared in the video, London black taxi drivers can see their earnings fluctuate significantly depending on the time of day, the areas they operate in, and the nature of the journeys they pick up. According to London taxi driver Tony Cornick, he expects to earn on average, around £40 per hour. This can spike much higher under certain circumstances, such as completing airport runs, longer fares, securing return fare and working during higher tariff hours.
Paul Byron, also a licensed taxi driver, detailed how by capitalising on high-demand periods and working higher metered rates at the weekends or evenings, would often return more than £40 per hour.
Uber Driver Earnings and Challenges
Private hire driver Jabeer Hussain working on apps such as Uber and Bolt face a different earnings potential. On average, the private hire driver said on the podcast he aims to make £20 per hour before vehicle expenses, but after accounting for the platform’s commission. While the flexibility of the job is appealing, PHV drivers often need to work longer hours to achieve a stable income. In fact, Hussain said during the discussion that he works six days a week.
Surge pricing systems on ride-hailing apps, which can temporarily increase fares during periods of high demand, provides occasional opportunities to boost income. However, even with surge rates, ride-hailing drivers struggle to match the hourly rates of black taxi drivers.
Why Taxi Drivers Often Earn More
Several factors explain why London black taxi drivers can command higher hourly earnings compared to private hire drivers, but the main difference is that the lack of operator taking a significant cut. After VAT, app commission fees, pension payments and Congestion Charge fees, a PHV driver might only see around 60% of the amount paid by the customer to the operator for their services. After that, vehicle costs and other operating fees must also be applied.
Taxi drivers can also command a higher tariff from customers for their services due to their qualifications. The Knowledge, London’s famous taxi exam, requires cabbies to memorise the city’s streets and routes in great detail, creating a highly skilled workforce that many passengers trust and are willing to pay a premium for.
Additionally, black taxis are allowed to use bus lanes and take more direct routes that aren’t accessible to private hire vehicles, enabling faster and more efficient journeys. This access, especially in a congested city like London, gives taxi drivers a distinct advantage in terms of earning potential.
What are the vehicle costs though?
Some people would think that the cost associated with running a purpose built taxi over a vehicle suitable for ridehailing would be poles apart. However, PHV drivers are also facing the squeeze according to Hussain.
His private hire insurance costs around £300 per month and pays between £20-30 a day in fuel for the six days work a week.
Hussain said drivers looking to rent a car at UberX standard usually cost upwards of £250 per week. This figure would include the cost of insurance.
Compared with renting an electric LEVC TX black taxi, cabbies can be expected to pay between £360-£400 per week. Whilst vehicle rental costs may be around £100 per week higher when compared with PHV base rate model options, it can be argued that the ability to earn more and fast outweighs the additional costs.
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