How Much Money COULD a London Taxi Driver Earn?

CODE: taxi-YouTube

I don't know much the average London cabbie earns, but I share some ideas as to how much a cabbie COULD earn!

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WHO AM I:
I’m Tom, a London Taxi driver of 5 years. I also have a keen passion for all things London whether that’s; history, geography or a good spot for coffee!

WHY DO I MAKE VIDEOS?:
To PROMOTE and PROTECT The Knowledge of London
And to PRESERVE the high standards of London Taxi Drivers

GET IN TOUCH:

CHAPTERS
00:00 - Intro
00:29 - No fixed salary
02:02 - What about an average?
04:08 - What I think of the job
04:40 - Freehold vs Lease payments
07:48 - You can't multiply hours
09:37 - Working as hard as the meter
12:27 - Working off the meter?
13:36 - The earnings ceiling?

[TomtheTaxiDriver]

Thanks again for their support on the channel! 🎉 🙌🏻

[hptt]

The best time to work is when you’re young and single, once you’re married with kids you could no longer do the long hours, the older you get the harder it gets to do long hours, and the older you get the more you realise health is your biggest wealth

[bobbrewer]

The VAT is an interesting point, Tom.

Here in Australia, we have our Good & Services Tax (GST) equivalent.

GST is factored into our metered rate, in our cabs, and therefore, when the GST scheme was implemented 20 years ago, cab drivers are now required to pay GST on every dollar we earn.

[clarenceishmael]

Some real gems there! Never managed to get into the VAT territory in 25 years behind the wheel, but now I'm kind of glad I didn't. 👏🏾👏🏾

[SamTheBalerMan]

Tom, if your earnings exceed the threshold for VAT, you’ll be able to reclaim VAT on your expenses - fuel, some running costs and the vat you pay on your LEVC. It would probably somewhere near balance out but needs a LOT more accounting and bookkeeping records.

[Markstaxidiaries]

The great thing about being a london taxi driver is that you have the ability to earn money if needs require. You can basically call in your own overtime! Need more money-Work more hours. Great vid Tom 🚕

[markpunt]

Very interesting and if, for example one driver lives in Chiswick he can put his light on as soon as he gets in. Whereas another driver who lives out of town may have to drive for an hour before he can start picking up fares.

[smallmj]

As a driving instructor, a similar answer applies to my job. There are many variables although unsurprisingly the national driving schools always give absurd figures in their adverts that pretty much nobody achieves. Usually they provide a turnover figure rather than profit but aren't transparent about it and/or they will assume a ridiculous number of lesson hours a week. 40 hours a week sounds reasonable for a full time job but 40 hours a week of lessons can easily become 55+ hours due to travelling to and from lessons, admin, diary management, washing the car etc.

Personally I rarely do more than 25 hours otherwise I'd go insane and I'll be changing my job in the summer because I'm fed up of teaching people to drive and sitting in a car for hours each day, among other reasons.

[jdbgames]

Comparing a driver who has paid for his taxi with one who hasn't is a false comparision. Their profit is in substance the same. The one who has paid for his vehicle has merely front loaded his expenditure over the first year or two of the vehicle's life, whereas the other driver has spread the cost out further. Over the life of the vehicle, that cost (and hence profit) will be the same for both. Don't confuse cashflow with profit.

[mikebuick]

I never thought watching a fella talk about driving a cab would be so interesting. It’s like Clarkson’s Farm but for London Cabbies!

[Essential.WP.]

Tom! You have inspire me to open my own channel, I've been a cab driver for about 4 years now in my hometown about hour away from NYC and we got a good taxi system out here. If you have any tips, would surely appreciate it. Blessing my man and stay safe on the road in London!

[billybattams-scott]

I guess being a cabbie, you can pick and chose your hours. It’s swings and roundabouts with your earnings.

[btkb]

I never knew that about VAT. I honestly thought it was anything above 85k is taxed at 20%. That's insane...

[danielfoxwell]

I left the trade in March 2020 (covid)...never went back. After 23 years it was the best thing to happen to me.
I've got my life back.
My blood pressure is normal now and my stress levels are manageable.
Wait till you settle down, maybe have kids, you become a slave to the meter.
That's my take for what it's worth.

[Tuppoo]

So, in essence, the VAT liability threshold makes it so that being a taxi owner-driver isn't about maximizing your turnover, but about minimizing your costs. For example, 60k of costs on a turnover of 85k leaves a much smaller profit than 30k of costs.

[Gerald]

Im a cabbie and earn just under a taxable income. Thank you very much Mr Tax man.

[danidriver]

The answer is where you talk about the decorator, who adds the 20% VAT. As a tour guide, if a 50% of your income comes from pre booked tours, you add there the 20% VAT that you can claim back later. This helps you to pay a 10/9% difference instead of a 15% (20%-5% VAT for your energy expenses).

[KSIOjedibt]

Tom one thing to clarify is that you aren't taxed VAT on income you earned before registering. So if you hit the threshold (£85, 001) you would have to register, but you would not need to pay VAT on those earnings - it would be all earnings from that point. Your point still very much stands though, as if you earned a similar amount over the following 12 month period, you would pay full VAT on those earnings. Without a way to charge it through the meter, you're right - it's a completely unfair system.

[lewis]

Interesting stuff Tom, especially with how you guys have to deal with the VAT, seems bizarre to me that they would just dump a massive load of tax after you cross the £85k threshold, surely it would make more sense to do it gradually, that way the government would actually earn more of this tax from taxis as people wouldn't mind as much going over the 85k limit?

[jamesjohn]

Earn a lot yes but expenses are crippling. There’s many people very well off in the taxi trade and none of them are driving cabs. 😊