How Much of Fare Do Taxi Drivers Keep?
Determining a taxi driver's pay varies based on several factors. If you own your own taxi, you get to keep the entire fare, minus expenses. If you lease, you must pay a daily rate out of your incoming fares, plus the cost of gas. Some companies take a percentage of your fare instead of a flat-rate lease payment. Research the taxi company policies carefully to ensure driving a taxi is a money-making venture before you commit.
When you work for a taxi company who charges you a percentage of your fares for the right to drive the cab, that rate is typically one-third of your overall gross fare income. If you bring in $200 in fares during your shift, one-third is about $66. That means you have $134 left, part of which you use to pay for your gas, if required by your company,
Many licensed taxi companies choose to lease vehicles to independent contractors for the day or the week. The contractor must refuel the vehicle and pay a flat fee that typically ranges from $75 to $150 per day, depending on your location. With a daily fare total of $200 and the lowest rental of $75, you have $125 left before buying gas for the vehicle.
The U.S. Bureau of Labor Statistics (BLS) gives the median income for taxi drivers and chauffeurs as $25,880 per year as of May 2017. This means that 50 percent of cabbies earned more than this amount and the other half earned less. It should be noted that this number doesn't necessarily include tips, as cash tips are difficult to trace unless the cabbie reports them as income. However, this income often is hard earned. Cab drivers work long hours, usually eight- to 12-hour shifts. They deal with traffic, irate customers and lift heavy luggage all day. On the positive side, driving a cab is usually flexible, allowing you to pick your own schedule and take breaks whenever you don't have a customer. Many cabbies prefer to work nights and weekends, when business is easier to find.
In addition to paying a daily rental fee or return a portion of the fares to the cab company, many companies require you to pay additional fees for the right to drive a cab. Most require you to refuel the vehicle before returning it, and some charge you up to 10 percent for customers' credit card transactions. Because many cabbies are independent contractors, cab companies might require you to carry insurance, such as general liability. The cab owners typically take care of insuring the vehicle and maintenance costs. As an independent contractor, you might discover other costs involved, such as the need to purchase your own health insurance and pay your own taxes.