How much does it cost to become a taxi driver?

Below is a breakdown of the various costs all new taxi drivers (public hire, private hire and self-employed) will incur before being able to operate as licensed drivers. The cost may vary between local authorities and the prices shown are approximate values.

Licence fees

Before applying for a taxi licence, drivers are required to have had a full driving licence for at least 12 months in most regions, and three years in London.

Application fees

Depending on the local authority, the initial application fee varies between £150 and £250. This fee is non-refundable and covers administration costs. Some council fees may cover other costs relating to obtaining a taxi licence, but again, this may differ between regions.

Taxi driver’s licence fee

The initial application fee is for a three-year licence and costs £292. This is made up of a £103 search fee and a £189 licence fee. Annual renewal fees cost £272 which includes a £83 search fee and £189 licence fee. The search fee mentioned here covers a background check.

Vehicle licence fees

• Vehicles under three years – £215 a year
• Vehicles over three years – £251 a year
• Vehicles over seven years – £299 a year

It is important to note that vehicle licences and taxi drivers’ licences must be obtained from the same local council.

Taxi insurance

Taxi insurance is a legal requirement in the UK. All new drivers must present their licensed taxi badge before applying for a policy. Insurance costs vary between public and private hire. Further factors influencing the cost include:

• Age of the driver
• Driver history
• Criminal record
• Location
• Vehicle

Let’s look at a breakdown of the average costs:

• Public hire taxi insurance costs between £1,600 and £3,500 per year. A newer or younger driver will likely pay more for insurance.
• Private hire driver insurance costs between £1,600 and £1,800 per year. This price will depend on the same factors as public hire insurance and the policy level you choose.
• Public liability insurance costs between £50 and £500 a year. Every UK taxi driver is legally required to have public liability insurance to protect themselves against third-party liabilities relating to their business. This kind of insurance is not included in most taxi insurance policies.

Bonus Read: How To Get Cheaper Taxi Insurance In The UK

Tests

Certain tests are mandatory for new taxi drivers. These tests are for the driver and the vehicle they will be using and ensure that both are fit to be on the road.

• Class 4 MOT tests for private and public hire taxis cost £54.85 per year. VAT does not have to be paid on this fee, which is a plus. New taxi drivers are required to get their MOT test done during the initial application stages. If the vehicle is over three years old, an annual retest is required.
• A skills assessment test costs £40.
• Theory tests such as The Knowledge test (only applicable to London cab drivers) or the “Cabology” test cost around £75.

Certificates

There are many certificates that a UK taxi driver can obtain during their career. Some are not mandatory, but the ones mentioned below are a legal requirement for any new drivers.

Medical certificate

The cost of a medical will vary according to your doctor’s fees or if you go via the NHS. However, you would be looking at an average cost of £100. All new applicants must meet certain medical requirements and have a certificate stating such.

Every taxi driver over the age of 60 must have a medical check and a renewed certificate done each year. Those under 60 are only required to have a medical done every five years. Your medical certificate cannot be dated more than eight weeks prior to the completion of your taxi application process.

Background checks

A background check may be included in the initial licence application fee and renewal. If it is not covered, this is what you can expect to pay:

• Disclosure and Barring Service (England, Wales) – £18 (basic) or £38 (enhanced DBS certificate)
• Protecting Vulnerable Groups scheme (Scotland) – £59 (initial joining fee) or £18 (existing members)
• AccessNI (Northern Ireland) – £16 (basic) or £32 (enhanced)

The enhanced checks go a bit deeper than the basic or standard background checks and include things such as warnings, reprimands, and convictions.

Training

A Safeguarding training course costs on average between £10 and £65. It is a legal requirement by most councils for new taxi drivers. The cost of the course may or may not be included in the application fee and varies between councils.

Vehicle costs

Many factors will influence the cost of any vehicle you purchase specifically for taxi driving. Likewise, the cost of leasing a vehicle for business purposes will depend on the type of vehicle, your record, and driving experience.

It’s good to remember that if you have taken out a loan to finance a vehicle for your taxi business, you can claim the interest as a business expense.

Bonus Read: Best Car For Private Hire Taxi: UK Guide 2024

Yes! There are many ways a new taxi driver can save on costs when starting out in the industry.

1. Find cheaper taxi insurance by comparing quotes with SimplyQuote’s 100% free online comparison tool.
2. Consider telematics insurance to prove to insurers that you are a sound driver and lower your costs.
3. Do your research on which areas would be most lucrative to operate in.
4. Study hard and try to pass tests and assessments the first time around to avoid retesting fees.

Bonus Read: What Expenses Can A Taxi Driver Claim?