Are longer taxi and private hire journeys actually more profitable for drivers?

Longer taxi and private hire journeys account for most of the passenger mileage travelled in England, but a higher fare does not necessarily mean a more profitable job for the driver.

Fresh Department for Transport (DfT) data shows that only 16% of taxi and PHV trips exceeded 10 miles in 2024. Those journeys nevertheless represented 61% of the total distance travelled by passengers.

For cabbies, the attraction is easy to understand. A longer booking produces more revenue from one passenger, reduces the time spent waiting between jobs and may provide a substantial addition to the day’s takings.

However, the downside of a long fare begins when the passenger leaves the vehicle. A journey can place the driver many miles outside their normal working area, without a rank, local customer base or operator capable of providing a return booking.

If the driver travels back empty, the profitability of that fare changes. The fare may cover the outward journey, but fuel, charging, vehicle wear and the driver’s time continue to accumulate during the return.

The true value of a longer fare therefore should be measured across the complete working cycle. That includes travelling to the pick-up, carrying the passenger, waiting at the destination and reaching the next paying customer.

A 40-mile passenger journey can become considerably longer once positioning and empty return mileage are included. The headline fare may look strong, but earnings per hour can fall if much of the driver’s time is spent without a passenger. But that’s the calculated risk a cabbie must make. Snare a job on the return leg of the journey and its very much quids in!

Get FREE WhatsApp news updates here

Taxi and PHV pricing also works differently. A taxi journey may be charged according to a locally regulated meter tariff, while a private hire fare can be agreed in advance or calculated by an operator or app.

A metered taxi fare generally increases with distance and, where applicable, time. However, the tariff does not usually compensate the driver for returning to the licensed area after a one-way journey.

Private hire drivers may know the offered fare before accepting the booking, but platform commission can remove a significant percentage of the revenue. A high-value fare can therefore also generate a high commission charge and make the fare a less attractive proposition.

Independent drivers with their own operator licences may be better placed to arrange return work directly. Airport passengers, business clients and regular customers can be offered a return booking, potentially giving the driver paid journeys in both directions.

Airport work provides a useful example of the mixed economics. The fare may be higher than a local trip, but the driver could face terminal charges, waiting time, traffic delays and a long journey back without a passenger.

Flight delays create another risk. If the driver commits to meeting a returning passenger, waiting can consume time that might otherwise have been spent completing local journeys. Operators need clear policies covering waiting charges and delayed collections.

On a side note, vehicle costs also become more important as distances increase. Fuel, tyres, servicing and depreciation are all linked to mileage. A driver covering a large amount of unpaid mileage shortens the interval between maintenance and vehicle replacement without generating extra income.

The DfT figures show that longer trips now form a significant part of the taxi and PHV market. They account for most passenger mileage despite representing a small share of bookings.

For drivers, however, mileage alone does not determine profitability. The important figures are paid mileage, total working time and the cost of reaching the next customer.

A long fare can be one of the best jobs of the day when there is paid work in both directions. Without that return booking, the impressive price shown on the meter or app may be far less rewarding than it first appears.