Becoming a self-employed taxi driver can be a rewarding career, but from choosing the right vehicle to tracking expenses, there’s a lot to understand and get right in your first few months on the road.
As industry experts who have been serving the taxi industry for over fifty years, we’re here to help you understand the basics. Here are 7 essentials every taxi or private hire driver should know before getting started.
1. Get the right licences first
To become a taxi or private hire driver, you must apply for a taxi licence – it’s illegal to operate without one.
You can apply for a licence through your local licensing authority, which is either Transport for London (TfL) if you’re in London or your local council if you’re outside of London. If you plan to use your own vehicle, you must get a vehicle licence from the same authority who issued your badge.
Different authorities have different rules, meaning that there may be additional requirements depending on where you want to work, which can include medical exams, DBS certificates, and more.
If you choose to work as a private hire driver, you will also need to have an operator’s licence or work for a company or with a ride-hailing app that has one.
2. Have the right insurance in place
New drivers should know that personal car insurance will not cover them once they start carrying fare-paying passengers. Taxi work requires a specialised taxi insurance policy, which is designed for drivers to transport passengers for payment.
The details of taxi insurance, from cover levels to how premiums are calculated, are worth knowing about, and we’ve covered all of that in our dedicated taxi insurance guide.
For many taxi and private hire drivers, insurance is the boring bit. But getting the right cover in place is essential, as without it, your vehicle – which is your livelihood – is exposed to risk. It’s also illegal to carry out taxi or private hire work without the correct insurance in place.
3. Choose the right vehicle
The vehicle you choose needs to meet your council’s specific requirements, which often go beyond a standard MOT. You may find restrictions on things such as tinted windows, vehicle age and vehicle colour, and rules can vary from one licensing authority to another. It’s always best to check these before going ahead and purchasing or renting a vehicle.
When it comes to choosing a vehicle, reliability also matters. A fuel-efficient and well-maintained vehicle will always take you the extra mile.
4. Track your expenses from the start
If you’re operating on a self-employed basis, you are responsible for managing your own income, costs, licences, insurance and vehicle repairs, and you will need to register your business activities with HMRC.
Receipts and invoices for fuel, vehicle maintenance, licensing fees and taxi insurance add up over time, so relying on your memory alone to keep track is not enough. Good record keeping from your very first day will save you headaches later on and will help ensure you’re claiming everything you’re entitled to when it comes to paying tax.
5. Prioritise vehicle maintenance
Taxi mileage racks up faster than the average private motorist, so some licensing authorities require more frequent inspections than a standard MOT. Staying on top of your vehicle maintenance is essential for protecting your income – you cannot take bookings if your vehicle is off the road.
6. Know how to keep safe
Personal safety is something to consider with taxi work. Some drivers choose to invest in a dashcam or CCTV, both for evidence in a dispute and as a deterrent. However, if you choose to install CCTV in your cab, it’s important to know about the legal and licensing rules that apply.
It’s also worth knowing your rights around refusing fares you feel unsafe accepting, and the process for reporting incidents to your operator, the police, or your licensing authority.
7. Build a routine that avoids burnout
It’s tempting to chase every available fare in your first few months, especially when building a client base or app rating. But taxi driving can be physically and mentally demanding, and burnout is common among drivers who do not pace themselves.
To avoid burnout, you may choose to learn your local peak hours – such as school runs, commuter times, or weekend nights – and build a shift pattern around them rather than simply driving as many hours as possible. A sustainable routine will allow you to keep earning steadily over the year than finding yourself burnt out after a few exhausting weeks. There are also plenty of tips and resources out there to help you look after your mental wellbeing.
Final thoughts
The drivers who thrive treat taxi and private hire work like the small business it is by staying on top of paperwork, maintaining their vehicle, and building a steady routine.
Check out our full guides linked throughout this article for a deeper dive into any of these areas.
