Taxi Versus Rideshare Apps: the Pros and Cons

UK transportation has dramatically evolved over the past decade. Compared to a decade prior, people are making 10% fewer trips per person on public transport, while the population has grown by around 4–5 million during that same period. 

Along with declining public infrastructure, one reason might be that taxi services are now more accessible. It has never been easier to hire a taxi - simply tap a button, and a customer’s smartphone GPS will indicate to the Driver where they are. 

We can see this shift in demand take form in the breakdown of what kind of taxi Drivers there are now. Private hire licenses have skyrocketed (which are used to drive for ridesharing apps) while traditional licensed taxis have fallen. 

So with trains and buses in decline, does this mean taxi services are one of the few areas of UK transportation to have seen an improvement? And, if so, why do ridesharing platforms get such a bad rap?

The rideshare revolution—technology meets transportation

Rideshare platforms are hugely popular, with Uber alone maintaining over 1.9 million weekly active users, and Bolt around 474,000 active users by mid-2024. These apps have essentially changed how many people move around cities, and it’s also brought in users who otherwise wouldn’t be using a taxi service. This is even highlighted in the fact there is an Uber for Teens service.

But what about the Drivers? It’s clear more Drivers than ever before use these platforms, so let’s look at why.

Advantages of using a rideshare platform

High demand

The data above shows that people are beginning to prefer using rideshare apps. From the user’s perspective, it’s convenient and, at times, can be cheaper. Therefore, working for a ridesharing app can capture a large portion of the market, where much of the taxi demand is. This can mean potentially more rides, and in turn, earning more money.

Efficient dispatch

The greatest power of rideshare apps is their advanced algorithms that can find users, plan their routes, and then dispatch the job to the right Driver. With traditional taxi services, this can be a manual process requiring human labour, that can be prone to mistakes or misunderstandings. With modern software, Drivers can rest assured that the algorithm’s efficiency is to their benefit because it’s in the company’s best interest to minimise the friction (i.e. time and distance) between Driver and customer.

Dynamic pricing

In addition to efficient dispatching, is dynamic pricing, which has a few different uses. Firstly, it can charge customers more during peak hours, but secondly, it can help distribute Drivers more evenly across a city by charging more for awkwardly placed jobs that may be out of the way. Both benefit the Driver, as they get paid more for the traffic-laden or far-out jobs.

Work for multiple apps simultaneously 

Often, a taxi Driver would typically work with a dispatcher and pay a weekly fee. However, due to the commission-based pay and the ability to decline jobs at will, Drivers have more freedom to work with various ridesharing apps simultaneously. This provides flexibility, the spread of risk, and the potential to take on many rides.

Flexibility 

Ridesharing apps are profoundly flexible, with Drivers being able to choose their own hours. This isn’t always the case with traditional PVH operators, which often require certain shifts for vehicle leases within fixed time periods. Plus, with ridesharing apps, Drivers don’t need to pay money to operators during holiday periods.

Onboarding 

The onboarding process with ridesharing apps can vary widely from company to company. Depending on the apps, the barrier to entry can be low. In the UK, Drivers are obliged to use private hire licensed or hackney vehicles, which pass minimum standard checks.

Cashless 

Many ridesharing apps have the customer pay in-app. This secures the customer’s card payment thus reducing the risk of the customer not paying at the end of their journey. It’s also faster and more efficient than having to count change at the end of each journey, allowing Drivers to get on with their next job immediately. 

Feedback system

Ridesharing apps typically rely on a rating system. This meritocracy allows Drivers to be rewarded for their good service, but it can also highlight problematic customers upfront.

The traditional taxi industry

The UK's traditional taxi industry (both PVH and hackney carriage) is far from dead. Traditional services are deeply rooted in not only public infrastructure but also British culture. Furthermore, they are still a necessity in many rural communities which have been left out of the ridesharing app supply.

Consistency in supply and pricing

Traditional private hire operators typically have a limited number of private hire Drivers (or in the case of hackney carriages, a limited number of licenses). With some ridesharing apps, Drivers never know if there will be a steep influx of Drivers the next day which will reduce their workload. Drivers also can’t predict if the app’s algorithm will slash fare prices.

With a meter, there are set-in-stone minimum fees per journey by every council in the country.

Chain of command

A traditional operator is also more likely to have a simpler chain of command. If a Driver has an issue, they can raise it more easily with management. While there are some local ridesharing apps, most of the market is dominated by Uber and Bolt, where Drivers can have a difficult time speaking to in-app customer service.

Is it possible to work for both?

The short answer is yes, many traditional taxi operators will allow Drivers to also be rideshare app Drivers on the side. While not all do, this method can help Drivers top up their income during quieter hours, with the added benefit being it typically doesn’t cost them anything extra upfront. 

Interestingly, there is a rise in ride-sharing apps that act with traditional values, meaning Drivers can get the best of both worlds. For example, Zippe Transport is a ride-sharing app that has similar flexibility and efficiency as the others. However, being a local company in the Bath and Somerset area, it also has a richer work culture. The chain of command is clear, like a traditional operator, and they service the community directly, as an approved transport provider for multiple local authorities. 

This highlights the need for due diligence as a Driver. Not all ridesharing apps can be grouped together, nor can all traditional taxi services—as many have scandals of their own.

Specialised taxi services 

This highlights the need for a third category, which is working with specialised firms. Here, the advantages of both traditional firms and ridesharing apps can come together.

Specialised taxi services can come in many forms. For example, corporate contracts (taking workers to their workplace), school contracts (taking children to school), serving the disabled community, or picking up VIPs.

Whatever the speciality, there may be more stability. Despite being app or algorithm-based, there is likely going to be more control over the supply of Drivers, as well as the price. 

For example, a platform like Zippe Transport, which has a duty to honour its contract of getting children in rural areas to school, isn’t going to introduce surge charges. Last year, Uber was accused of charging users with low batteries more for their fares. Zippe would never be awarded another school contract again if it were to deploy similar exploitation, and it’s this accountability that also benefits Drivers. For example, because surge pricing is restricted, they can also rest assured fares won’t be slashed to unprofitably low levels.

Final recommendations

There are pros and cons to working with both traditional operators and ridesharing apps. However, the two do not always need to be polar opposites, and a middle ground can be found. 

While regulation over ridesharing apps is now catching up, large multinational operators continue to bend the rules and show little loyalty to their Drivers. The existing technology is incredible and is to the benefit of both Drivers and passengers. However, while the tech, environment, and regulation are in their infancy, there will be volatility. By next month, Drivers can never be sure that a change in the law, base fare, algorithm, or Driver supply will not occur. A clear red flag of such an employer is when they’re actively fighting a legal battle against their Drivers.

Therefore, Drivers need to seek out operators that work with some clearance between themselves and the law.

One way to do this is to seek out local, reputable ridesharing apps, and another way is to find operators in a lucrative, specialised niche.