London’s ground transport sector has long been defined by its iconic black taxis, but an influx of private drivers over the past decade using popular apps like Uber and Bolt has sparked intrigue around the revenue potential for both sides of the fracture.

Recent video from Wizannhosted by taxi fleet owner Paul Byron, features discussions between a London taxi driver and a private hire vehicle (PHV) driver, who outline the financial opportunities and limitations in their respective industries.

A key element is the comparison between the income of a licensed black taxi driver and a PHV driver. The debate centers on how much each driver can expect to earn in a typical work day or night, as well as what influences those earnings.

According to information shared in the video, black London taxi drivers can see their earnings fluctuate significantly depending on the time of day, the areas in which they operate and the nature of the journeys they take. According to London taxi driver Tony Cornick, he hopes to earn on average around £40 an hour. This amount can reach much higher peaks in certain circumstances, such as traveling to the airport, paying longer fares, obtaining a return ticket, and working hours at higher fares.

Paul Byron, also a licensed taxi driver, explained how, by capitalizing on periods of high demand and working at higher rates at weekends or evenings, he often brought in more than £40 an hour.

Private hire driver Jabeer Hussain who works on apps such as Uber and Bolt faces a different earning potential. On average, the private driver said on the podcast they aim to earn £20 an hour before vehicle expenses, but after factoring in the platform’s commission. Although work flexibility is attractive, ride-hailing drivers often need to work longer hours to earn a stable income. In fact, Hussain said during the discussion that he works six days a week.

Accelerated pricing schemes on ride-hailing apps, which can temporarily increase fares during periods of high demand, provide occasional opportunities to increase revenue. However, even with rising rates, taxi drivers struggle to match the hourly rates of black taxi drivers.

There are several factors that explain why black taxi drivers in London can earn higher hourly earnings than private drivers, but the main difference is that the lack of operator experience a significant reduction. After VAT, application commission fees, pension payments and congestion charges, a PHV driver may only see around 60% of the amount paid by the customer to the operator for their services. After that, vehicle fees and other running costs must also be applied.

Taxi drivers may also charge customers a higher rate for their services due to their qualifications. The Knowledge, London’s famous taxi test, requires taxi drivers to memorize the city’s streets and routes in great detail, creating a highly skilled workforce that many passengers trust and are willing to pay extra.

Additionally, black taxis are allowed to use bus lanes and take more direct routes that are not accessible to private hire vehicles, allowing for faster and more efficient journeys. This access, especially in a congested city like London, gives taxi drivers a distinct advantage in terms of earning potential.

Some people might think that the cost associated with operating a purpose-built taxi versus a carpool-friendly vehicle would be very different. However, PHV drivers also face pressure according to Hussain.

Its private hire insurance costs around £300 a month and pays between £20 and £30 a day in fuel for the six days a week it works.

Hussain said drivers looking to hire a car at the UberX standard typically cost more than £250 a week. This figure would include the cost of insurance.

Compared to renting a LEVC TX electric black taxi, taxi drivers can expect to pay between £360 and £400 per week. Although vehicle rental costs can be around £100 per week higher than the PHV base rate model options, it’s safe to say that the opportunity to earn more, quickly, outweighs the additional costs.