London taxi drivers and private drivers compare their target hourly earnings

London’s overland transport scene has long been defined by its iconic black taxis, but the influx of private hire drivers in the last decade using popular apps such as Uber and Bolt has sparked intrigue around earning potential on both sides of the divide.

Recent video by Wizannehosted by taxi company owner Paul Byron, features discussions between a London taxi driver and a private hire vehicle (PHV) driver who outline the financial opportunities and constraints in their respective sectors.

The key is to compare the earnings of a licensed black cab driver and a PHV driver. The debate revolves around how much each driver can expect to earn on a typical work day or night, and what influences those earnings.

According to data presented in the video, London’s black taxi drivers may see their earnings fluctuate significantly depending on the time of day, the areas they work in and the nature of the journeys they make. According to London taxi driver Tony Cornick, he expects to earn an average of about 40 pounds an hour. Under certain circumstances, such as airport flights, longer fares, guaranteed return travel and operating during higher fare hours, this figure can increase significantly.

Paul Byron, also a licensed taxi driver, detailed how by capitalizing on periods of high demand and working at higher rates on weekends or evenings, it is often possible to earn more than £40 an hour.

Private driver Jabir Hussain, who works on apps like Uber and Bolt, faces different earning potential. On average, a private driver said on the podcast that he aims to earn £20 an hour, excluding car costs, but after taking into account platform fees. While job flexibility is attractive, PHV drivers often have to work longer hours to achieve a stable income. In fact, Hussein said during the discussion that he works six days a week.

Surge pricing systems in ride-hailing apps, which can temporarily increase fares during periods of high demand, provide opportunities to boost revenue from time to time. Yet even as rates soar, taxi drivers struggle to match the hourly rates of black taxi drivers.

Several factors explain why London’s black taxi drivers can earn higher hourly earnings than private drivers, but the main difference is that not having an operator takes a significant discount. After taking into account VAT, application fees, pension payments and congestion charges, the PHV driver can only see about 60% of the amount paid by the customer to the operator for his services. After this, vehicle costs and other operating fees also need to be taken into account.

Taxi drivers can also demand a higher rate from clients for their services due to their qualifications. ‘Knowledge’, London’s famous taxi test, requires taxi drivers to meticulously memorize the city’s streets and routes, creating a highly skilled workforce that many passengers trust and are willing to pay a premium for.

In addition, black taxis are allowed to use bus lanes and take more direct routes not available to private hire cars, allowing for 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.

Some people might think that the costs associated with operating a purpose-built taxi instead of a vehicle suitable for hailing would be quite different. However, Hussain said PHV drivers also face challenges.

His private insurance costs around £300 a month and pays £20 to £30 a day in fuel costs for working six days a week.

Hussain said it typically costs more than £250 a week for drivers looking to hire a car using UberX’s standard. This amount will include the cost of insurance.

Compared to hiring a LEVC TX electric black taxi, taxi drivers will pay between £360 and £400 per week. Although car hire costs can be around £100 per week higher compared to base rate PHV model options, it could be argued that the opportunity to earn more, faster, outweighs the additional costs.