How Much Does It Cost to Become a Taxi Driver in the UK?

You can spread the costs per week if you decide to hire a PCO car to maintain your initial investment extremely low, at an average of £250 per week.

With full-time cab drivers earning £20,000–£30,000 annually on average, and top earners in busy cities pulling in even more, the income potential can outweigh the startup price tag. Curious about how the numbers stack up long term? Explore the full taxi career journey here.

What It Really Takes to Get Licensed as a Taxi Driver?

Licensing Procedures You’ll Need to Follow

Every taxi driver in the UK must go through a defined legal process to operate professionally. Procedures vary slightly by region, with Transport for London (TfL) overseeing the process for private hire and taxi drivers in the capital, and local councils managing licensing elsewhere. In London, getting a PCO Licence is essential, you can explore every step in this detailed guide to becoming a PCO driver.

Initial Licensing Costs Broken Down

Licensing isn’t just about ticking boxes—it’s a sequence of paid steps. Here’s how the costs stack up:

Application Fee: Varies by council. In London, it's approximately £124 for a private hire licence application.
Licence Grant Fee: For a three-year PCO licence, TfL charges around £186.
Topographical Skills Assessment: TfL requires this. The test costs around £36.
ID Badge: An additional fee, usually around £6.

Medical Fitness Doesn’t Come Free

The licensing authority won’t move forward without proof of medical fitness. Every driver must complete a DVLA Group 2 standard medical exam, and GPs typically charge £80–£150 for this.

Fluent in English? Prove It

English language proficiency isn’t optional. TfL mandates a Secure English Language Test (SELT) from an approved provider if you can’t prove qualifications like GCSE English. The cost of the SELT starts from £180. Preparation guides like this resource on mastering the TfL English test will help streamline the process.

What the Criminal Background Check Costs

All applicants must undergo an Enhanced Disclosure and Barring Service (DBS) check. TfL and most councils require this to be done through a certified channel. Expect to pay roughly £52 for the check itself, plus a small admin fee (normally under £10) depending on your provider. For an inside look at the DBS process, check out this breakdown: DBS Checks for PCO Drivers.

Vehicle Acquisition Options: Buy, Rent, or Rent-to-Own?

Vehicle acquisition represents one of the largest upfront costs for new taxi drivers. Prices vary dramatically depending on the vehicle's age, condition, and model. Buying a brand-new car suitable for PCO (Public Carriage Office) use typically starts around £22,000 to £30,000, especially for popular hybrid models like the Toyota Prius or Hyundai Ioniq.

These cars meet required emissions standards and offer reliability under constant daily use.

Opting for a used vehicle can reduce the price significantly. Well-maintained, ULEZ-compliant used vehicles that meet PCO criteria can range between £9,000 to £18,000. However, lower purchase costs might come with higher maintenance bills, depending on mileage and history.

Rent-to-Own: Spread the Cost While You Work

For drivers who want ownership without paying the full amount upfront, rent-to-own plans provide an appealing middle path. These agreements typically last from 24 to 48 months, allowing drivers to use the vehicle immediately while making fixed weekly payments. At the end of the term, ownership transfers to the driver.

Typical weekly rent-to-own payments fall between £190 and £250.
Most agreements include road tax, licensing, and sometimes servicing, reducing unexpected expenses.
Providers often require a refundable deposit ranging from £250 to £500.

PCO Car Hire: Pay as You Operate

Short-term PCO car hire offers flexibility without long-term commitment or ownership. This option suits drivers testing the industry or balancing rideshare/taxi work with other commitments.

Weekly hire rates range between £180 and £265, depending on the model.
Electric vehicles like the Kia e-Niro may cost more upfront but cut fuel costs significantly over time.
Insurance, road tax, and licensing are typically bundled into the rate, which simplifies budgeting.

Choosing the Right Vehicle: What Matters Most?

Reliable, fuel-efficient, and ULEZ-compliant vehicles are non-negotiable for London taxi drivers and ride-share operators. Mileage matters too: high-mileage cars may appear cheaper but often incur higher ongoing maintenance costs. Consider.

Fuel Economy: Prioritise hybrid or full electric vehicles when possible — fuel savings accumulate quickly in city traffic.
Maintenance Record: Ask for a full service history to avoid surprise repairs.
Comfort and Space: Choose a model with plenty of legroom and a sizeable boot — both drivers and passengers benefit.
Residual Value: Vehicles that hold value well (e.g. Toyotas, Hyundais) will fetch a better price if sold later.

What Are the Dash Cams for Taxi Drivers?

For taxi drivers navigating everyday risks—fraudulent claims, passenger disputes, and accident liability—a dash cam adds a layer of security that pays for itself over time. The market offers several types of dash cams designed to support taxi operations, each with unique features and levels of visibility.

Forward-Facing Dash Cams: Mounted on the windshield, these record only the road. They capture traffic incidents but offer no interior footage.
Dual-Facing Dash Cams: These record both the road ahead and the vehicle’s interior. Especially relevant for taxi drivers, they deter passenger misdemeanours and support incident investigations.
Three-Channel Dash Cams: Equipped with front, interior, and rear lenses, they capture a 360-degree view. These models suit those wanting complete coverage, including for rear-end collisions.

Which Dash Cams Meet TFL Requirements?

Transport for London (TFL) sets specific standards for in-vehicle cameras in licensed taxis and private hire vehicles. TFL-approved dash cams must comply with data protection legislation, offer AES 256 encryption, and not record audio without explicit consent. A full list of compliant models and manufacturers is available here.

How Much Do Taxi-Grade Dash Cams Cost?

Prices for dash cams vary with features and quality. For TFL-compliant models tailored to professional drivers, expect the following cost ranges:

Basic Forward-Facing Units: £70–£120. These models deliver HD video and loop recording but have no encryption.
Dual-Facing TFL-Approved Dash Cams: £180–£300. These offer G-sensor activation, infrared cabin recording, and secure data storage compliant with TfL's standards.
Three-Channel Connected Systems: £350–£500+. These come equipped with fleet monitoring features, cloud uploads, GPS tracking, and wide dynamic range imaging.

Some rental and fleet operators offer bundled packages that include dash cam installation, hardware rentals, and cloud storage subscriptions. Several of these packages are outlined on this dash cam cost breakdown page.

What is the Real Costs of Becoming a Taxi Driver in the UK?

Understanding the financial outlay to start a taxi driving career in the UK begins with a breakdown of both one-time and recurring costs. Here’s a straightforward guide to what drivers spend and what they can earn in return.

Taxi Driver Licence (Private Hire or Hackney Carriage): £250–£500 upfront, depending on the local council.
DBS Criminal Record Check: £40 (enhanced check).
Medical Test (DVLA Group 2 Standards): £60–£120, often required every 5 years or sooner over a certain age.
Driving Assessment and Knowledge Test: £75–£150 for assessment; £50–£100 for topographical or 'Knowledge' tests.
Taxi Driver Training Course (if applicable): £300–£500 including classroom and on-road instruction.
PCO Vehicle Purchase or Lease: Purchase can range from £5,000 (used) to £30,000+ (new, electric or wheelchair accessible); leasing costs are £150–£300 per week.
Insurance (Public Hire/Private Hire, annual cover): £1,500–£4,000 per year (£125–£333 per month).
Vehicle Licence (MOT + council inspection): £100–£250 annually.
Vehicle maintenance (servicing, tyres, MOT): £100–£250 per month, depending on mileage.
Fuel or EV charging costs: £80–£160 per week (£320–£640 per month), heavily influenced by mileage and vehicle type.
Dash Cam installation: £100–£250 one-off or £10/month if financed.
Platform Commission Fees (Uber, Bolt): 20%–25% of ride fare.

Weekly and Monthly Cost Breakdown (Averaged)

A driver working full-time (approx. 45–60 hours/week) will see the following averages:

Weekly Costs: £400–£600, depending on whether the vehicle is owned or leased, and fuel usage.
Monthly Costs: £1,600–£2,400.

Cost vs Income: What Can a Taxi Driver Expect to Earn?

Working in a major UK city like London, Birmingham, or Manchester, weekly gross earnings sit between £800–£1,200 for full-time work. London drivers can push beyond £1,400/week with surge fares and longer hours.

Typical Monthly Gross Income: £3,500–£5,200.
Net Income After Costs: £2,100–£2,800/month if leasing; £2,500–£3,600 if owning the vehicle.

If you're weighing your options, consider this: Are you planning to rent or buy your vehicle upfront? That single decision can swing your weekly outgoings by more than £200. Have you factored in holiday downtime or slow-season gaps? Plan accordingly with this breakdown in mind.