INSURANCE, FUEL, MAINTENANCE AND MORE: What are the running costs taxi drivers face in 2025 outside of cab expense?
- Perry Richardson
- Aug 15
- 2 min read
Updated: Aug 17
To operate a taxi and private hire vehicle it costs a fair amount of money. A combination of increased energy prices, high insurance premiums and persistent wear-and-tear costs are leaving drivers with tighter margins and tougher business decisions.
Fuel prices remain a daily concern for those using petrol or diesel. RAC Fuel Watch confirms that fuel duty remains frozen at 52.95p per litre through spring and summer, but overall pump prices moved up in July. Petrol rose by nearly 1p per litre and diesel by close to 2p, according to RAC data. For high-mileage drivers, these small increases quickly add up to extra weekly costs.
Electric vehicle drivers are also under pressure, depending on how and where they charge. The Ofgem price cap for domestic users in the July–September quarter sets average rates at 25.73p per kWh. This still offers savings when charging at home, but rapid public charging averages around 79p per kWh, based on RAC Charge Watch. That means a typical rapid top-up can cost around £40 for a mid-size EV, cutting into the savings EVs traditionally held over diesel.
Taxi drivers who can charge on home rates can still benefit from charging at night rates. For the LEVC TX black cab home charging came in at 7–12p per mile, while a diesel TX4 averaged 20.5p per mile.
Insurance remains a major cost for cabbies. The Financial Conduct Authority’s latest update shows premiums stabilising after sharp rises between 2022 and 2024, driven by parts shortages, rising claims costs and labour issues. The FCA notes an easing of motor premiums in recent quarters, with the ABI citing an average private motor premium of £562 in Q2 2025, down from £622 the year before.
Taxi-specific insurance, however, continues to cost significantly more. According to Patons, prices remain high due to the continued rise in vehicle values and repair costs. Broker feedback suggests more drivers are looking at usage-based policies, especially in the private hire sector where shifts and work platforms can vary week to week.
Maintenance has now become the biggest cost worry among drivers. According to the National Taxi & Private Hire Driver Survey 2024/25, it ranks highest in the list of challenges faced. Drivers reported annual outlays averaging around £2,700 depending on region and work type.
Basic service and compliance costs are another factor. MOTs remain capped at £54.85 across most of the UK for Class 4 vehicles, though many garages offer bundle deals. Standard full services for passenger cars can range from £170 to nearly £400, and taxi-use wear often demands more frequent intervention. The higher mileage needed to run a taxi business increases costs on items like brakes and tyres.
In response to these pressures, drivers are always looking to take steps to safely shave off the costs eating into their profit margins. Charging schedules are shifting towards cheaper overnight slots. Insurance excesses are being tweaked to control premiums. Maintenance intervals are being tied to mileage rather than the calendar.
Energy markets, claims inflation, and vehicle part shortages all continue to shape what it costs to operate a taxi in 2025. With margins still tight, the decisions drivers make around energy use, vehicle type, and insurance cover remain critical to staying on the road profitably.
