Becoming a taxi driver on a ridesharing platform can be a great way to earn extra income, or a lucrative full-time job. Find out everything you need to know about getting started with major taxi ridesharing apps like Uber, Free Now, Gett and Bolt, wherever you live in the UK.

Discover our essential advice on how to become a taxi driver in your local area, including:

  • What you’ll need to get started
  • Safety checks on your vehicle and while driving
  • How to choose an app to drive with
  • How to set up your new business legally
  • How to keep your finances in good shape from day one 

If you’re looking to change careers or build a side hustle in taxiing, this article is for you. Read on to find out how to become a taxi driver and how Countingup can help make managing your business finances a breeze.

What you’ll need to get started

If you’re looking to become a taxi driver with a ridesharing app, you’ll need to have a number of things like legal documents for you and your car to get started. We’ve included a rundown of them below; each of which will be necessary, no matter what app or service you choose to join. Find out more advice in our dedicated article: What do I need to become a taxi driver?

Driver’s licence and vehicle

Unsurprisingly, taxi drivers will need a full UK driving licence and a vehicle with its road tax paid and a valid MOT. If you’ve been driving for a number of years and are looking to start taxiing on a ridesharing app, you’ll likely already be familiar with this and may have a car ready to go. However, if you’re a newer driver or are yet to start entirely, you’ll need to secure each of these:

  • Book your driving test here,
  • Find an MOT centre near you here or search online for a local MOT garage,
  • Pay your road tax here,

Specifically, even if you have each of these already, certain apps like Uber or Free Now require drivers to be over 21 and have a qualified car. Therefore, make sure you read and comply with the terms of the ridesharing provider when signing up. We’ll discuss the differences between ridesharing apps in a later section.

Recently, a number of UK council authorities have announced environmental measures for cars and vehicles, restricting the engine standard entering into certain city and town limits. Currently, these measures vary between regions as some UK areas are yet to introduce them. All cities will still allow taxis and private hire cars, however, vehicles must have a Euro 4 or 6  engine (petrol and diesel respectively). If you’re starting out or are looking to pivot to be a taxi driver on a ridesharing app, it may be wise to upgrade your engine ahead of time.

Crucially, it’s also worth noting that these restrictions may still exclude your vehicle from entering if you’re not actively working. Clean Air Zones of categories C and above prohibit cars from entering. Therefore, if you’re off duty and not actively looking for fares, you will have to be aware of these limits as a regular driver.

Taxiing licence for private hire

Depending on where you’re looking to taxi in the UK, you’ll need some sort of taxi licence. The process is slightly different depending on whether you work in and around London or elsewhere in the UK. 

During this process, you may be asked to undertake a medical examination, a ‘knowledge’ test of routes in your local area and a criminal background check. These are methods for local councils and taxi licencing authorities to make sure drivers are qualified for the job and fit to work with the public. Find out about how you can secure a licence for taxis and private hire vehicles in your area here.

Private hire or taxi insurance

As a minimum, all UK drivers need third-party insurance while driving. However, while this type of coverage can reduce your costs, these types of policies don’t provide much protection for you or your passengers. Similarly, taxis and private hire businesses have special requirements and added costs to their insurance as their driving volume and patterns incur higher risks. 

These costs include the extra premiums on your standard car insurance because of the volume of driving you’ll be doing. Then there are things like public liability insurance and special taxiing insurance, depending on whether you’re a public or private hire car. 

If you plan on only working for apps like Uber or Free Now, you’ll need private hire insurance as you’re not technically allowed to pick up fares from the street (in which case you’d need public hire insurance). Search online for the insurance policy you’ll need and use price comparison sites to get a good deal. 

You can reduce your insurance costs by having dashcams, a ‘no claims’ history and safe driving record, but make sure your policy protects your car and earning ability if anything were to happen. While not mandatory, insurers also like to see drivers with enhanced driving abilities. We discuss these more in the next section.

Identity documents and driving info

Ridesharing apps will need a number of documents as you sign up. These cover some of the safety and legal requirements mentioned above but are also needed so you can work on their platform.

As well as each of the documents outlined above, make sure you have:

  • A bank statement, such as one from Countingup (so you can get paid)
  • A selfie (so passengers can see who to look out for during fares)

With all of these basics sorted out, it’s almost time to get started. Before your first fare, we thought we’d cover some safety aspects while driving and operating as a ridesharing driver.

Safety checks on your vehicle and while driving

There are various safety requirements for vehicles and their drivers while operating on UK roads. We discuss the essentials below and offer recommendations so you can get to driving safely and confidently.

Being ‘roadworthy’

Even if you have a current MOT, all UK vehicles must still be roadworthy. While the MOT standard establishes a minimum threshold for road-safe cars, damage or breakage can occur to vehicles in between checks that would render your vehicle unsafe. As a taxi driver, this will be an especially relevant problem for you to manage.

Make sure your vehicle is safe to drive at all times by consulting your vehicle handbook for regular maintenance and performing daily checks on your windscreen, mirrors, lights and breaks. 

When can you use devices while driving?

As you’re driving, it’s critical not to handle your phone or sat nav as it could be a distraction. The Highway Code specifies you must use hands-free methods while on the road. These can include a bluetooth headset, voice commands and a secured mount that doesn’t block your road view (such as a cradle or dashboard mat). 

Importantly, these rules still apply if you’re stationary at traffic lights or in congestion, so be careful when and how you use any apps to accept fares.

Enhanced driving qualifications

Having a strong driving history free of accidents can be a good way to show insurers you’re a competent and safe motorist.

One way to evidence this if you don’t have years of driving history behind you is through the Pass Plus scheme. This is an additional voluntary qualification that recognises a higher standard of driving and safe practice while using a vehicle. They’re particularly favoured by insurers, allowing you to reduce the cost of your coverage. It can also provide you with more competency in driving in risky situations – protecting you and your passengers better.

How to choose an app to drive with

With almost all of the basics now sorted, you may not have fully considered which ridesharing provider you’ll join. Below we’ve listed some of the major hurdles you might want to consider before deciding on a platform to join.

Is my car accepted?

The first way you might decide is if you already have a car. In this case, your options might be a bit more limited. Apps like Uber require seating capacity for at least four people with as many doors, while Free Now adheres to Transport for London’s requirements. Therefore, you’ll need to double-check whether your car will be accepted with a particular service before signing up. If not, you’ll need to upgrade. Find out if your vehicle is accepted with Uber, Free Now, Gett and Bolt.

Can I operate in my local area?

Other factors to consider are whether or not certain providers operate in your local area. Ridesharing platforms have become competitive, with some brands more dominant in certain cities than others. Find out which ridesharing platforms operate in your local areas below:

What benefits can I get on top of the income?

As a driver, you may also be enticed by the various pay and reward features on offer. Uber offers drivers surge pricing as well as other benefits, including exclusive insurance deals through Axa and gym memberships. Free Now also has surge pricing, a driver referral scheme, health support and loyalty rewards. Gett allows drivers to buy routine expenses like fuel at a cheaper rate with Esso garages, while Bolt offers drivers commission rates as low as 15% and a carbon offset scheme. Consider how you could benefit from each of these before signing up.

How to set up legally and declare your new income

As a driver on ridesharing apps, your work and income come from self-employment like freelancing. For this reason, you’ll need to register as a sole trader. We have a dedicated guide available on this process: How to register as a sole trader

What is a sole trader?

Sole traders are how HMRC categorise self-employed people. Sole traders are allowed to keep all the profits they’ve earned after taxes but are also personally responsible for any debts their business undertakes. 

Because of this, your personal and professional finances are intertwined. This means you’ll be responsible for providing any tools or equipment you need to run your business (like your car, insurance costs, MOT and servicing, etc.). However, you may be given some promotional and marketing materials from the ridesharing app of your choice to show customers you’re a driver for them. This can include things like stickers or other visual branding materials. If you choose to buy any additional materials for your work, you can expense them in your accounting, but only for the proportion of usage that is for your business. 

For example, if you buy a laptop to stream films, buy clothes and manage spreadsheets for your business, you can only claim to cover the usage directly linked to running your business (e.g. managing spreadsheets).

Find out more about tax returns for taxi drivers in our article How to file income tax as a taxi driver.

Specific considerations when becoming a sole trader as a taxi driver

While registering as a taxi driver, you won’t have to worry about filling out specific sections like “trading name” as you’ll be working under someone else’s brand name (like ‘Uber’ or ‘Bolt’). Therefore, when registering with HMRC, you can use your own name where appropriate.

What you’ll need to keep records of

Like many businesses, you’ll need to keep records of your finances, but being a sole trader means your admin is a little lighter. You’ll need to keep records of:

  • The income and expenses of your business
  • Records about any additional income you have from other employment
  • Grant money you may have received in 2020-2021 if you claimed through the Self-Employment Income Support Scheme because of Covid-19

Over the next few years, sole traders are expected to transition to digital bookkeeping through HMRC’s Making Tax Digital (MTD) initiative. This is a new method for business accounting and a new era for tax collection. Businesses can now – and will soon be expected to – record and manage their finances using completely integrated digital accounting software. As a taxi driver for apps like Uber and others, this should fit into your existing work and can help simplify your accounting overall.

This is where software like Countingup comes in. Read on to find out how you can run your business with it below.

Steer yourself to success with Countingup

Countingup is your business current account with free, built-in MTD compatible accounting software. You can use it to help manage your taxes and business finances more efficiently.

Countingup provides thousands of self-employed people across the UK with real-time profit and loss insights, automatic expense categorisation and receipt capture on the go. If you’re new to self-employed bookkeeping, you can also take advantage of the tax estimates so you can set aside the right amount for your tax return.

Gain complete confidence in your bookkeeping and make your new venture on ridesharing platforms a success. Find out more here and sign up for free today.