How do taxi drivers make money?
Have you ever wondered how taxi drivers make money? Or how much money they make? We had a really talkative driver tonight who gave us the low down.
There are two kinds of drivers: Owners and Renters.
Renters have to rent a car from yellow cab or whatever. They don’t make as much as the owners from what I could tell.
Owners buy a car. Our driver said that generally there is a middle man who goes to police auctions and buys slightly damaged (dinged) Crown Victorias for about $1,500 and then sells them for about $4,000 to cabbies. The owner then pays Yellow Cab about $180 a week for dispatching service. This comes out to about $35 per working day, so the driver can pocket anything above that in the day. If you calculate that the average ride is about $20, and the average ride takes about 25-30 minutes, a cabbie could make almost $300 after dispatch and brand fees.
The cable driver is also responsible for gas, maintenance and insurance. Insurance costs, according to our driver, $5,500 per year. Apparently it fluctuates year to year but that’s this year.
He said when there’s no traffic, long trips are the most lucrative (like from downtown Seattle to the airport.) but when there is rain and traffic, short trips will make more money.
He said he always tells the new drivers not to worry so much about the money, it always averages out over time and no matter what he makes almost the same amount every year. He said a given ride is pretty much luck.
“How much should I tip?” He said most people in Seattle tip about 10 percent. He is happy to drive a New Yorker because they tip more than 10% usually.
There you go. Everything you could have ever wanted to know about Seattle taxi economics.