A quick guide to taxi tipping: Everything you need to know

While tipping isn’t a big part of British culture there are a few areas in which it’s considered the done thing – one of which is when providing a taxi service. However, knowing your way around tipping etiquette isn’t always straightforward, especially if you’re just starting out as a taxi driver. So, if you’re in need of a quick refresher then read this quick guide to taxi tipping.

 

Understanding the ins and outs of taxi tipping is only one part of running a successful taxi service. At the top of any to-do list has to be arranging the right insurance for your taxi. Cover arranged through the specialist team at Taxi Insurer will help protect you, your vehicle and other road users.

 

 

Is taxi tipping to be expected?

 

Let’s get this out of the way first. While tipping for taxi drivers is entirely normal, it certainly isn’t a requirement in the UK.

 

Indeed, your passengers should never feel pressured into tipping. And with the pace of life getting faster and tap-to-pay becoming more and more commonplace in many areas of life, it’s all too easy for passengers to forget to tip.

 

However, tips are a big perk of a taxi driver’s work so it’s important to understand how to increase your chance of a decent tip. Hopefully, if you’ve provided a great taxi service, they’ll be sure to give you that little bit extra at the end of the journey.

 

 

How much should passengers tip?

 

The most common way in Britain for taxi drivers to be tipped is by the passenger rounding up the total fare. After all, it’s why so many passengers say ‘keep the change’ as they hand over the cash.

 

For the average short fare this might be to the nearest pound, but it might be the nearest £5 for longer, more expensive journeys. Aside from a nice tip, it’s often just more convenient for both of you as you won’t need to be handing out or receiving lots of small change.

 

Obviously, the amount of tip coming your way will depend on a range of matters. Such as how much change the passenger has available, the value of the fare, and the quality of the service you’ve provided.

 

Indeed, depending on the fare, a simple rounding up may not feel like enough, which is why a percentage might sometimes be more appropriate.

 

If you’ve been extra helpful, offered to load and unload luggage or shopping, made friendly small talk, and generally provided an overall pleasant taxi ride, then you might think a 10-15% tip is a nice gesture. It would certainly be enough to put a smile on your face.

 

That said, the amount a passenger decides to tip you is entirely up to them.

 

Increasing your tips with great service

 

As we’ve already said, tipping is optional, but there are plenty of ways you can increase the chance of you receiving a tip (and the size!) at the end of a journey. Here are just a few suggestions:

 

1. Smiling – A genuine smile when they first get in your taxi is important. It may be towards the end of your shift and you might have had some difficult fares already but it’s important to make a passenger feel welcome. Showing you’re happy to be there and you value their custom is the first step towards a positive experience and potential tip.
2. Make conversation – Knowing how to make conversation with passengers comes easier to some drivers than others. But whether or not you’re a larger-than-life character who always has something to say, it’s important to not ignore the power of small talk in making your passenger feel at ease. As a bare minimum it’s important to introduce yourself, and try to use their name if you can. Building a personal but professional connection is vital. That said, remember that not everyone wants to talk!
3. Offer to help – If you’re able to, and it’s safe to do so, then get out of the car and open the door for the passenger. Or perhaps help them with their baggage if they have any. This is particularly appreciated by older people and those with children who might need a helping hand. This not only helps your passengers (more tips!), but it also helps you out, too. Sitting in the driver’s seat for hour after hour can cause a range of health problems for taxi drivers. So, take the chance to get out of your vehicle whenever you can – it’ll pay off in the long-term health benefits. Taxi drivers may not think they need to listen to health tips, but they do!
4. Use your unique knowledge – Even little things like offering directions or tips about the local area will give that extra service that’s often rewarded by a bigger tip.
5. Pay attention to the route – Traffic conditions are obviously outside of your control. But a common reason given for not tipping is if a driver has taken a longer route or hasn’t taken into account rush hour traffic. In a sense, you really can’t win either way but it’s important to be aware of this passenger concern. Perhaps discuss if your passenger has a preferred route before you set off. Or explain if you’re going to take a longer route to avoid heavy traffic. Effective communication is a big part of this.
6. Make sure you and your car are spotless – If you provide a clean and pleasant environment then your passengers will appreciate it. From keeping the outside polished and windows sparkling to clearing out any rubbish and wiping down the inside with antibacterial wipes, there are lots of regular chores that need doing. Think of your vehicle as your office and keep it free of clutter and smelling fresh and clean.
7. Common courtesy goes a long way – Always saying thank you, even before the fare is paid. It’s a good way to create a positive feeling. And don’t forget to give them your business card and ask them to call you for future trips or refer you to others. If they do tip, make sure to say thanks again.

 

 

Collecting tips

 

With cash on the wane and more transactions than ever coming through cards or mobile phones, it might be worth thinking about the best way to collect tips.

 

Cash is the traditional favourite but there are the risks with keeping cash in the cab and some issues with accurate record keeping for tax purposes.

 

It may be more convenient for passengers paying by card or contactless, but some passengers still prefer to tip with cash as it provides that personal connection. There are also now apps and services which enable customers to ‘thank’ drivers with a tip of their choice after the ride.

 

Remember that having lots of cash in the cab could make you a target for thieves. Make sure you have adequate taxi insurance in place to cover any damage or injury.

 

 

Paying tax on tips

 

If a passenger gives you a decent tip after all your hard work, you can’t just put it in your pocket and forget about it.

 

Just like any other form of income from your business you have to pay tax on the money received. If you’re self-employed and fill out a self-assessment tax return each year, then you’ll have to include the tips on it.

 

On the other hand, as a self-employed taxi driver, you’ll also be able to claim back various business expenses to a much greater extent than employees can – these include:

 

• Petrol or diesel costs.
• Maintenance repairs, servicing and running your taxi.
• Annual road tax and MOT tests.
• Costs of washing or cleaning your own taxi.
• Interest on any bank or personal loans taken out when buying your taxi.
• Taxi license and any other registration fees.
• Office expenses including rent, gas and electricity. This can even apply to home offices.
• Taxi insurance.
• Breakdown membership.
• Radio and other equipment hire.
• Accountancy fees.
• Phone and broadband usage for business.
• Parking and toll fees.

 

Once you become a self-employed taxi driver you’ll notice lots of benefits. From choosing where, when and how long you work, to making all your own business decisions it’s easy to see why so many people love it!

 

However, something that’ll never be seen as a highlight is completing your annual self-assessment tax return.

 

It can be a real headache, particularly if you’re new to it. Why not give our helpful Taxi Insurer tax return guide a quick read.  It’s sure to help you with this taxing task!

 

Tipping rates around the world

 

As a taxi driver it’s always interesting to hear how drivers in other countries go about their business. From driving styles and preferred car models to rules of the road and driving etiquette, there are lots of differences to discover all over the world.

 

Tipping is one of the many elusive customs that seems to change its rules around the globe – what is considered a welcome personal show of appreciation in some countries, could be offensive to some more subtle sensibilities.

 

Let’s take a closer look at what those travel-aficionados at Lonely Planet say about taxi tipping in some of these popular areas.

 

 

Europe

 

Similar to the situation in the UK, most continental drivers don’t ‘expect’ a tip, but rounding up the fare is the usual way of showing appreciation.

 

Exceptions to this rule include France, Russia and Switzerland, where taxi drivers do expect a 10-15% tip. While in the Scandinavian countries and Iceland tipping taxi drivers, even by rounding up the fare, isn’t expected at all.

 

 

The Americas

 

As you might expect, in the USA tipping taxi drivers 10-15% is the done thing. For short journeys, a couple of dollars will probably be enough. It’s a similar story in Canada and the Caribbean.

 

If you’ve struck a deal on the fare before getting into a taxi in Central and South America, then don’t worry about tipping unless you form a particular personal connection with the driver. If the fare is fixed, then rounding it up at the end of the journey is considered polite.

 

 

Asia

 

Chinese or South Korean taxi drivers tend not to expect tips. If you take a can in Japan then rounding up the fare is standard practice. Indian taxi drivers don’t usually get tips, but rounding up the fare is considered a friendly gesture – and undoubtedly good karma!

 

In Indonesia, the Philippines and Malaysia, expect to pay a 10% tip for fixed-fare rides. While in Singapore and Vietnam, rounding up the fare or telling the driver to keep the change is more usual. Depending on the length of the journey, Cambodian and Thai taxi drivers will consider the local currency equivalent of $1 as a decent tip.

 

 

The Middle East

 

If you’re feeling flush then round up the fare in Dubai, but taxi drivers there won’t expect tips. In most other Middle Eastern countries, including the rest of the UAE, Israel, Jordan, Qatar and Saudi Arabia, taxi drivers should be tipped around 10-15%.

 

 

Africa

 

When it comes to tipping, taxi drivers in African countries will hope you tell them to round up the final fare, or to keep the change. In countries like Egypt and South Africa where tourists are common, drivers will usually expect a 10% tip as a show of appreciation.

 

 

Australia and New Zealand

 

Drivers in Australia, New Zealand and the South Pacific Islands will not expect a tip. But similar to many other places in the world, it’s good form to round up the fare to the nearest $1 or $5.

 

 

Protecting your business with taxi insurance

 

Changing tipping expectations and driving etiquette are just some of the things that taxi drivers need to be aware of. With the amount of rules and regulations that you need to contend with, being a taxi driver isn’t always stress-free.

 

That’s why the team of insurance specialists at Taxi Insurer is always looking to come up with little ways to help. For example, our interest-free payment plans are here to make your payments more manageable alongside other expenses.

 

The taxi insurance we can arrange comes in many different forms and can cover everything from single vehicles to entire fleets, as well as high-value vehicles.

 

In addition, we can offer no claims bonus protection, cover for minibuses and MPVs, and a UK-based call centre.

 

Get a quick quote for taxi insurance today.

 

Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.

 

Frequently asked questions

 

How can I increase positive reviews as a cab driver?

 

As a cab driver, building a positive reputation is essential for success in the industry. One of the most effective ways to increase positive reviews is by providing exceptional customer service. Greeting passengers with a friendly smile, assisting with luggage, and driving safely are all important aspects of delivering excellent customer service.

 

Additionally, maintaining a clean and well-maintained vehicle can create a positive impression on passengers and encourage them to leave positive reviews. By focusing on these aspects, cab drivers can significantly increase the number of positive reviews they receive.

 

Why does the UK not have a tipping culture?

 

When it comes to tipping, the United Kingdom has a reputation for not having a big tipping culture. Unlike countries such as the United States where tipping is expected and often considered mandatory, the British approach to tipping is quite different.

 

One reason for this could be the fact that service charges are often included in the bill at restaurants and hotels. This means that customers don't feel the need to tip on top of the already included service charge. Additionally, the UK has a minimum wage policy that ensures workers are paid a fair wage, which may also contribute to the lack of a big tipping culture.

 

What happens if a customer does not have enough money for a taxi?

 

As a taxi driver, encountering customers who don't have enough money for their fare can be a tricky situation. However, it is important to handle these situations with patience and empathy. One possible solution is to offer alternatives to the customer. For example, you could suggest that they pay what they can and provide their contact information so they can pay the remaining amount later.

 

Another option is to offer to drive them to a nearby ATM or bank so they can withdraw the necessary funds. It's important to communicate with the customer and find a solution that works for both parties, while maintaining professionalism and understanding.

 

How can I improve the customer experience of my customers as a cab driver?

 

Maintain a smooth driving style, adhere to traffic regulations, and ensure the air conditioning or heating is at an appropriate level. Another way to improve customer experience is by being friendly and courteous. Greet your passengers with a smile, engage in polite conversation if they are open to it, and always handle their luggage with care.