Running a private hire vehicle offers freedom, flexibility, and the chance to earn a steady income—but it also comes with a range of expenses. For new and experienced drivers alike, understanding the true cost of operations is key to staying profitable.
In 2025, the costs aren’t just about fuel and tyres. From licences to insurance, let’s explore the main areas where drivers spend money to keep their business moving.
1. Vehicle Ownership or Lease
Whether you buy your vehicle outright or lease it, the vehicle is your biggest investment. Most private hire drivers choose reliable, fuel-efficient models that suit their work. Some go for hybrids or electric cars to reduce running costs and stay compliant in clean air zones.
In either case, you’ll have ongoing monthly payments or depreciation to consider over time.
2. Fuel or Charging
How you power your vehicle will shape your weekly spending. Petrol and diesel vehicles need frequent refuelling, especially in stop-and-go traffic. Electric vehicles have lower fuel costs, but they require access to charging points and may involve longer charging times during your shift.
Either way, your energy use is one of the most consistent expenses in your daily operations.
3. Maintenance and Repairs
Even the best-maintained car experiences wear and tear. Tyres, brakes, oil changes, and servicing are part of running a vehicle full-time. The more miles you clock, the more frequently you’ll need to visit a garage.
In addition to regular maintenance, unexpected repairs—like a broken sensor or failed alternator—can pop up and affect your earnings if your car is off the road.
4. Hire and Reward Insurance
One of the most important—and required—expenses for private hire drivers is hire and reward insurance. Unlike standard car insurance, this policy is made for drivers who carry paying passengers.
It can covers accidents, passenger injury claims, and legal issues tied to your business. Without it, you can’t operate legally.
The cost of hire and reward insurance depends on your experience, location, vehicle type, and how often you drive. Working with a specialist provider helps ensure your cover fits your driving habits without overpaying. Some providers also offer flexibility for part-time drivers or those just getting started.
Keep in mind, hire and reward insurance is a non-negotiable cost—it protects you, your passengers, and your income.
5. Licensing and Compliance
Every private hire driver must meet local authority requirements. This usually includes:
- A private hire driver’s licence
- A vehicle licence
- A background check (DBS)
- A medical assessment
- Regular MOT and vehicle compliance checks
These are recurring costs that vary depending on your local council’s policies. Staying compliant means keeping documents updated and following all rules that apply to your operating area.
6. Platform and Service Fees
If you drive through an app like Uber, Bolt, or Ola, you’ll pay service fees or commissions. These are usually a percentage of each fare and can affect how much you take home. Some platforms may also charge weekly access fees or deduct costs for cancellations or support services.
Independent drivers won’t pay platform fees but may invest more in marketing or customer loyalty incentives.
7. Day-to-Day Extras
Smaller costs also add up:
- Keeping your car clean and presentable
- Mobile phone data and chargers
- Snacks, drinks, and rest breaks
- Business cards or local ads if you’re self-employed
Though minor individually, these daily expenses have an impact when added up over weeks and months.
Conclusion
The true cost of running a private hire vehicle in 2025 goes far beyond just fuel and tyres. Success depends on understanding your full list of expenses, including regular servicing, platform fees, and especially your hire and reward insurance—a key part of running your business legally and safely.
When you’re fully informed and properly covered, your vehicle becomes more than just transport—it becomes a stable and profitable way to work on your own terms.