THE HIDDEN COSTS OF TAXI DRIVING: What costs new drivers might often overlook
- Perry Richardson
- Jul 15
- 3 min read
When entering the trade, most new taxi drivers focus on headline expenses like vehicle rental, fuel, and insurance. But there are a number of additional, less obvious costs that can add up quickly and catch new drivers off guard. These costs affect earnings and should be factored into early planning.
Licensing and regulatory costs
Before any driver can legally begin work, there are several one-off and recurring costs linked to licensing. These include application fees, enhanced DBS checks, medical assessments, topographical tests, English language tests and SERU exams. All of these cost both time and money.
Vehicle preparation and presentation
Even for drivers renting vehicles, there are regular presentation costs. Taxis must remain clean, inside and out, particularly for private hire inspections and customer experience. Weekly valeting can cost £10–£20 per session if they choose not to clean the cab themselves. Over a year, that’s several hundred pounds spent.
Drivers also need to replace seat covers, floor mats, and signage items such as licence roundels, fare cards, and no-smoking stickers when worn or damaged.
Equipment and tech upkeep
Most taxi drivers use multiple tools to carry out their work which include meters, card machines, phone mounts, navigation equipment, and sometimes radios or tablets. When renting a taxi most garages provide meters and fixed payment terminals as part of the rental price. Drivers who own their cabs will have to supply or maintain these themselves.
Backup data and charging cables, screen protectors, printer rolls and receipts also add small but steady outgoings throughout the year.
Downtime and vehicle changeover
A broken-down vehicle or maintenance appointment can mean hours, sometimes days, off the road. For a driver that’s lost money. Larger garages can offer swap vehicles quickly, but smaller fleets may leave drivers waiting.
Drivers not on maintenance-inclusive rental plans must cover the cost of new tyres, minor bodywork, or glass repairs. Insurance excesses can also be high. Even with cover in place, a single fault claim can leave the driver with a £500–£1,000 bill before the insurer pays out.
It’s also common to lose work during annual inspections or licensing renewals. These delays can take hours or more out of a shift and reduce weekly earnings.
Financial admin and tax preparation
Taxi drivers are self-employed, meaning they must manage their own accounts and file tax returns. While some do this themselves, others use accountants or software platforms to handle returns and VAT submissions if registered.
Bookkeeping software, receipt tracking apps, or accountant fees can range from £100 to £500 annually. Failure to keep proper records can lead to fines or lost expenses. New drivers who do not set aside funds for tax may also face surprise bills after their first year of trading.
Holiday breaks and vehicle return
Drivers are also responsible for planning unpaid time off. Some garages do not refund rental fees during holidays unless a formal return or break is arranged in advance. This can make holiday planning more costly than expected.
While many drivers focus on obvious expenses like rent and fuel, the mountain of hidden smaller costs of working as a taxi driver can easily amount to several thousand pounds per year.
Planning for licensing, equipment upkeep, downtime, financial admin, and holiday coverage helps drivers protect their income and make more accurate forecasts. For those just starting out, getting ahead of these quieter costs can make the difference between sustainable earnings and unnecessary financial strain.
