How to Become a Private Hire Driver [Step-by-Step UK Guide]

Becoming a private hire driver might seem as easy as starting the engine and hitting the road, but there’s a route you need to follow first.

Skip a turn and licences, background checks, and a few formalities, and you could find yourself in a dead end before you even pick up your first passenger.

Read on to see what steps to take and what to avoid to become a private hire driver without any unexpected speed bumps.

Ready to get in gear?

Why start a private hire driver business in the first place?

Before you buckle up and start the journey, let’s take a quick detour to understand why so many people are hitting the road as private hire drivers in the UK.

Here’s why it’s worth considering:

✅ Flexible working hours: As a private hire driver, you choose when and where you work. Want to do a few hours after your day job? Or go full throttle on weekends? It’s entirely up to you.

✅ Low barrier to entry: Unlike starting most businesses, you don’t need a massive investment or fancy equipment.

If you have a car or are willing to rent one and meet the licensing requirements, you’re already halfway there.

✅ Growing demand for on-demand transport: With increasing urbanisation and a preference for convenient, app-based transport options, demand for private hire services continues to grow.

✅ Being your own boss: Running a private hire driver business offers entrepreneurial independence, allowing full control over service quality, customer interaction, and the potential to scale with multiple vehicles or drivers.

✅ Earning potential: Private hire drivers serve a broad customer base, including commuters, tourists, business travellers, and special clients with specific transport needs.

Additionally, you can partner with various ride-hailing apps and private hire operators, diversifying your income sources and maximising bookings.

Is a private hire driver business right for you?

If any of the points below ring a bell, launching a private hire driver business could be just what you’re looking for. You:

• Like managing your own schedule, staying organised, and working independently.
• Have good navigation skills and local knowledge.
• Manage traffic, delays, and demanding passengers calmly.
• Enjoy interacting with diverse people and providing a positive passenger experience.
• Are prepared for variable income and expenses, such as vehicle maintenance, fuel, and taxes.
• Enjoy being on the road rather than in a static office environment.
• Are comfortable with potentially long hours sitting and driving.
• Are open to working evenings, weekends, and peak demand periods.

UK private hire driver market: opportunities and trends in 2025

Private hire driving is on the rise, and the numbers prove it.

As of April 2024, England had 313,000 licensed vehicles and over 381,000 driver licences.

Of the total licences, 69% were PHV-only licences, 9% were taxi-only licences, and 20% were dual taxi and PHV licences.

The driving force is a big 10.5% jump in private hire vehicles since last year, now totalling 256,600.

For new drivers, this trend signals strong demand and numerous opportunities to hit the road and start earning.

Between 2023 and 2024, the number of licensed PHV operators grew by 8.9%, hitting 16,300.

London led the way with a 9.9% increase to 1,700 operators, while the rest of England wasn’t far behind, climbing 8.8% to 14,600.

Even more striking, 3,610 new applications came in over the year, either from brand-new companies or existing operators expanding into new areas, marking a 30% jump from the year before.

🚦 Fun fact:

Did you know that Wolverhampton is leading the pack when it comes to licensed private hire vehicles (PHVs)?

In 2024, the city had 109 PHVs per 1,000 people, five times the average across other areas, where the number typically sits below 20.

This big difference often comes down to local rules, licensing processes, and how many vehicles are allowed to operate.

Sometimes, a vehicle might be licensed in one area but spend most of its time working elsewhere.

Wolverhampton’s big jump in licensed PHVs and drivers since 2017 is likely a mix of these factors.

How to become a private hire driver: 4 key steps

In order to be eligible to become a private hire driver, you must meet the following requirements and criteria.

First and foremost, you must have the right to live and work in the UK.

1. What is the age requirement for private hire drivers in the UK?

You must be at least 18 years old in most areas, but 21 years old in London and some other councils.

There is no upper age limit if you meet all other requirements.

PHVs have 3 types of licences: a vehicle licence, a driving licence, and an operator licence.

2. How to apply for a vehicle licence?

Before you hit the road, every vehicle you plan to use needs its own licence, and it can’t have more than 8 passenger seats.

Your local council will want to make sure your car is up to standard. That means it should:

• Be roadworthy and safe to drive
• Feel clean and comfortable for passengers
• Have a working taximeter (if you’ve got one)
• Have doors that close securely and safely.

Your vehicle must also not look like a licensed taxi. For example, like a London-style ‘black cab’. It also mustn’t display licence discs or plates.

If you plan to work in London, you must also display only advertising that complies with TfL guidelines.

Insurance is just as important. You’ll need a policy that covers private hire and lists you as the named driver.

A vehicle licence usually lasts for a year, but don’t be surprised if the council calls your car in for an inspection.

It can happen up to three times during that year, just to check everything’s still in good shape.

👁‍🗨Watch out! In case you fail inspection, you must fix any problems within 2 months.

3. How to apply for the private hire driver license?

Most councils want you to have held a full UK (or EU/EEA) driving licence for at least a year.

However, some set the bar higher. In places like Southampton, you’ll need two years’ experience, and if you’re applying in London, it’s three years before you can hit the road as a private hire driver.

Speaking of London, the criteria for obtaining your license are much more detailed than in other local councils.

Transport for London (TfL) requires that you must pass mandatory assessments, including:

• A topographical assessment,
• English language requirement and
• A Safety, Equality and Regulatory Awareness assessment.
• An enhanced Disclosure and Barring Service (DBS) check that evaluates you as a ‘fit and proper person.’ It involves reviewing any convictions, driving offences, or concerns that might impact public safety, such as checks against the barred lists for adults and children. This is a must since private hire drivers transport passengers, including potentially vulnerable adults and children.
• Passing a medical examination that meets DVLA Group 2 medical standards, proving your overall fitness, eyesight, and health for commercial driving.
• Getting a Certificate of Fitness signed by a registered medical practitioner to prove you meet the medical standards, both before you get your licence and at regular intervals while it’s valid.

Private hire vehicles (PHVs) are also subject to the Congestion Charge and Ultra Low Emission Zone.

How do training and topographical tests vary across UK councils?

Topographical test requirements for private hire drivers vary significantly across UK councils.

1. London (TfL) topographical test format:

✅ A computer-based test at TfL-approved assessment centres.

✅ Divided into four sections testing different aspects of map-reading and route-planning skills:

• Index-based questions: Using the Master Atlas (A-Z) of Greater London to locate specific places by page and grid reference.
• General topography: Questions on directions and spatial relationships between locations using compass points.
• Route planning: Planning efficient routes between two or more points without GPS reliance.
• Compass-point questions: Understanding directions relative to landmarks.

✅ The test has multiple-choice answers with a minimum passing score of 60 out of 100.

✅ The test fee is around £36 with a £16 fee for retakes.

2. Non-London local councils' test formats

Many councils don’t have formalised or standardised topographical tests like TfL.

Instead, some require:

✅ General "District Awareness" training modules assessing basic local knowledge of important locations, landmarks, and transport hubs, such as Bradford Council.

✅ Southampton Council includes local topography questions about central locations and points of interest, but these are typically less intensive and focused on broader local knowledge rather than detailed navigation skills.

The focus is less on detailed map reading and route planning and more on familiarity with the local area.

Many councils require some form of driver training, but not a dedicated, computer-based topographical exam such as TfL.

4. How to apply for an operational licence?

If you want to work as a private hire vehicle (PHV) driver in England or Wales, you have two options:

• Get your own PHV operator licence, or
• Work for a business that already holds one.

There’s a different process for operator licences in Northern Ireland and booking office licences in Scotland.

Remember, unlike taxis, which you can pick up at a rank or hail on the street, PHVs can only be booked in advance.

PHV operator licences last for a maximum of 5 years.

You’ll need to apply for your licence through the authority responsible for the area where your PHV business will operate:

• Outside London: Apply to your local council
• In London: Apply to Transport for London (TfL)

There’s a fee for the licence, so factor that into your costs.

One important rule: your driver's licence, vehicle licence, and operational licence must all come from the same licensing authority.

When it’s time to renew your licence, HMRC will want to make sure you’re paying your taxes.

That means completing a quick tax check to confirm how you report your earnings. (Don’t worry, we’ll get to the tax side of things later on.)

5. Set up your business structure and register

Once your licences are in place, the next step is to set yourself up as an official business. In the UK, you’ve got two main choices:

Sole trader: The simplest option with minimal paperwork. You keep all your profits, but you’re personally liable for any losses.

Limited company: Involves more admin, but offers limited liability and can be more tax-efficient if you earn more. It also adds a professional touch for clients and platforms.

Here’s what you’ll need to do:

✅ Register with HMRC if you’re a sole trader, or with Companies House if you set up a limited company.

✅ Open a business bank account (essential for a limited company).

✅ Choose and register your business name.

Struggling to find the perfect name for your taxi business?

Try ANNA’s free company name checker to see what’s available, or get some great alternatives if your first choice is taken.

The best part? ANNA can handle your business registration in minutes and keep all your paperwork organised.

That means less hassle for you and more time behind the wheel.

Private hire driver startup costs: What to expect before you start?

The cost of starting a private hire driver (PHV) business in the UK isn’t the same everywhere.

It depends on where you operate, the car you choose, and the local licensing rules.

Here’s what you can typically expect to spend:

How to attract your first clients as a private hire driver?

Landing your first customers as a private hire vehicle (PHV) driver takes a mix of smart marketing, great service, and the right tools. Here’s how to get started:

1. Join ride-hailing platforms

Sign up with popular apps like Uber, Bolt, or local alternatives that connect drivers with passengers.

These platforms give you instant access to a large customer base and help build trust through ratings and reviews.

2. Offer exceptional customer service

Be on time, stay polite, and keep your vehicle spotless.

Little touches, such as phone chargers, bottled water, or playing preferred music, can turn a good trip into a great one and boost word-of-mouth recommendations.

3. Build a local network and partnerships

Connect with local businesses, hotels, event venues, and tourist spots to offer your services.

Building relationships with companies can lead to steady work through corporate contracts or airport transfers.

4. Use social media and create an online presence

Set up professional profiles on social media to showcase your service, share special offers, and post customer testimonials.

Join local community groups on Facebook or Nextdoor to let people know you’re available.

5. Provide competitive pricing

Offer introductory discounts, fixed fares for popular routes, or loyalty rewards to encourage repeat bookings.

6. Attend local events or distribute flyers

Show up at community events or place flyers in busy spots like cafés and shopping centres to get your name out there.

7. Ask for reviews and referrals

Happy customers are your best marketing tool. Encourage them to leave positive reviews on apps and recommend you to friends and family.

8. Advertise on local online marketplaces

List your service on sites like Gumtree, Craigslist, or local classified pages with clear contact details and what you offer.

What do private hire drivers need to know about taxes and compliance?

If this is your first time applying for a private hire driver licence, you’ll need to let the authorities know that you understand HMRC’s rules about paying tax.

Once your licence is approved, you’ll have to register with HMRC and make sure any income from your driving is properly taxed.

If you already have, or recently had, a taxi or PHV licence with TfL or another council, you’ll need to go through a quick tax check as part of your application.

This ensures everything’s in order and that you’re paying the correct tax on your earnings from driving.

In both cases, you’ll get a unique 9-character tax check code that you must provide as part of the licence application or renewal.

This code is valid for 120 days.

With ANNA, you get all your taxes covered: Payroll, VAT filing, and Corporation Tax. As a result, you can shift into gear knowing you’ve ticked all HMRC’s boxes.

Avoid roadblocks: Top mistakes new PHV drivers make

Every new driver hits a few bumps in the road. Here’s how to avoid the common mistakes that can stall your PHV journey.

• Relying too much on GPS: Devices can fail, lose signal, or show outdated routes. Knowing the area yourself keeps you on track.
• Not learning local streets and landmarks: New drivers often skip this, but understanding your area is key to efficiency and appearing professional.
• Ignoring passenger comfort: Too much chatter or the wrong kind of conversation can leave a poor impression.
• Neglecting manners and vehicle cleanliness: Poor etiquette, inattentiveness, or a messy car can hurt your ratings and tips.
• Skipping regular maintenance: Overlooking vehicle upkeep can lead to breakdowns, costly repairs, and unhappy passengers.
• Not following local rules: Road, parking, and licensing regulations vary, and ignorance can result in fines or licence problems.
• Overlooking restrictions: Things like bus lanes, no-stopping zones, or proper booking procedures are easy to miss but important to follow.
• Long, irregular hours can lead to fatigue, stress, and burnout.
• Incomplete or incorrect licence applications.
• Misunderstanding operator agreements or bookings
• Poor record-keeping for tax and licensing compliance.

How to stay in the fast lane with ANNA?

ANNA is an all-in-one business account for money, invoicing, expenses, bookkeeping and taxes.

What we bring on your journey?

🚘 Company registration within a day, including a name checker to find the business name that hits your sweet spot.

🚘All-in-one tax support: From VAT and payroll to Corporation Tax, ANNA makes sure you stay HMRC-compliant without the stress.

🚘 Automatic tax calculations and filing: PAYE, VAT returns, and Corporation Tax are all handled automatically, with reminders so you never miss a deadline.

🚘 Smart receipt scanner: Snap a photo of your receipts, and ANNA matches and categorises them instantly.

🚘 Tax-saving pots: Every payment you receive automatically sets aside money for tax, so you’re never caught short.

🚘 Tax Terrapin (AI bot): Got a tax question? This ChatGPT-powered bot gives clear answers backed by HMRC guidance.

🚘 Bookkeeping score: Quick, actionable tasks help you improve your recordkeeping and reduce your tax bill.

🚘 Professional invoicing with card payments: Create invoices with your logo and accept payments via a unique link or QR code.

Try ANNA today and hit the road with confidence.