I am comparing actual motor costs with using a mileage allowance for a taxi driver client and using a mileage allowance gives motor expenses of 68% of turnover. Does this seem particularly high for a taxi driver or reasonable based on your experiences?
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I would say so?
If I remember correctly from my training days income should be 5 or 6 times fuel costs.
So you would have insurance and repairs on top of that, but your guy would have to go to the moon and back to make a living if 70% of costs were for vehicle does he pay to taxi office for leads etc on top of that.
Does the mileage rate being used reflect use of own car and thus in effect replace capital allowances/depreciation?
Still think it sounds high but might partially explain.
I would think that miles off. (see what I did there).
I live in North East and Taxi from my house into local town costs £7 to £8 yet its only 2.5 miles away. So at 45p per mile the cost would be £1 even if he returned empty it would still get you no where near 70%
I got a taxi from Bristol Airport recently to city centre and was £30, be suprised if journey was 10 mile.
I think he is either overstating his mileage or highly understating his income.
I obtained the Taxi Fuel Formula, when it was published decades ago. I put it on a spreadsheet, and have updated it annually. The starting point is "how much is a 2.5 mile JOURNEY?" The next stage is to compare the annual cost of FUEL. By analysing the fuel COST over MILES per GALLON (yes not litres). That establishes the ANNUAL MILES. Next apply a percentage for ENGAGED MILES. (Say 65%?). Compare the ANNUAL MILES. Does that seem reasonable?