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The In’s and Out’s of a Taxi Driver

There were some comments trying to understand how and what a taxi driver pays and earns driving in Las Vegas. In addition, comments about tipping and what amount should be given in a tip. I will try to explain as the best I can.

Of all the different companies in the Valley, some are individually owned and some companies have a few taxi company names under one ownership.

The costs and benefits vary per company but overall, the cost to the driver balances out. Here are the items involved with earnings. The amounts I will mention is from drivers I have talked to from different companies.

As a driver you pay a trip charge to the company, it can be as low as .60 per trip you drive and as high as $1.25. One company charges a flat fee of $16.00 a day, which is great if you get many customers each day, but is bad if you only have a few, like in a restricted area.

Every driver from every company pays .20 per trip that goes to the Taxi Authority to cover their discounted Senior Citizen program.

Most companies make the drivers pay for their gasoline. Some the full cost, some a percentage and a lesser percentage if you have a North-North restriction since sometimes you drop off in a area where you are restricted from taking on customers and have to drive back to your area without a paying customer.

Then the drivers get a percentage of the meter. It can be from 39% to 50%.

Some companies give the drivers a better percentage of some of the charges after the driver has completed one year of employment.

Now if you look at a customer riding in a taxi and paying the fare on the meter, the driver has to pay a trip charge, a Taxi Authority fee, some or all of the gasoline used and then a percentage of the meter, there is not a lot left. Then a percentage of the earnings of the driver are added on for tax purposes since the IRS wants to tax employees on tip earnings too.

Another problem for the driver is if the meter malfunctions, or the driver presses the wrong button on the meter and causes it to put on a charge that was not supposed to be added, the driver loses that amount. For instance, any taxi leaving the airport with a passenger has to pay a $1.80 Airport Fee. There is a button on the meter for this charge. If a driver has a customer on a ride that is not from the airport, and by accident presses the Airport Fee button adding $1.80 to the fare, the driver cannot charge the customer, but has to pay it to the taxi company.

The driver keeps the Tips, but not everyone tips at all, or well. I have had a few times where the customer pays the charge and says keep the change and the change is .10 to .20. Some drivers get mad. I just smile and say thank you.

Two Labor Unions represent some of the taxi companies. I am not sure if all companies are organized by a union and since Las Vegas is a “right to work” city, drivers have a choice to join the union or not. But regardless if you’re in the union or not all drivers get the same rules and pay. When you complain about something, the answer is, “Well, the Union did not get that in the contract, maybe next time the contract is negotiated.”

One thing that protects the driver is they must, by law make minimum wage set by the Federal Government. However, since it is a job where tips can be earned, the minimum wage for this class of employees is lower than normal types of jobs.

About tipping, I have thought many years that tipping should be abolished and the employer should pay correct wages. If this happens the business owner will raise his prices or lower his staff to cover the costs. Then everyone loses again. In America, it has become a standard for service people to receive tips by the customer to show their appreciation. Good service gets better tips than poor service.

I know one driver who has this policy. If is picking up a customer at a hotel and the doorman just leaves the luggage at the curb and does not load it into the taxi, but received a tip, the driver will say, you load the luggage or give me the tip. I have not experienced this so I do not know how I would react. The doorman loads the luggage at the hotel and I load and unload luggage at the airport.

I had a bellman for a customer the other day and we discussed tipping. We brought up the subject of getting coffee at Starbucks. Many people tip the person giving them the coffee at the counter at coffee shops but we do not give a tip to the person handing you your burger at McDonalds.

One comment mentioned his barber. As my rule of thumb, if a person owns the business, you do not tip him since he gets the profits. If a barber owns the shop you do not tip, but if a shop has barbers who get paid per client serviced or rents the chair, he does deserve a tip.

So far I have not had enough experience to give an “average” amount.

12 Responses to “The In’s and Out’s of a Taxi Driver”

  1. *lynne* says:

    Heyya Bruce,

    Tips are a source of stress for me in the US; most of the rest of the world doesn’t require tips for services rendered, and in fact tipping is discouraged. Then in the US you HAVE to tip, if nothing else then because the service provider is assumed to be “raking in” x% and is then being taxed on this assumption, whether or not that assumption is correct.

    I don’t want to gyp any service providers, though, not on purpose anyway… I recently blogged about forgetting to tip the person who did my hair, and not realising it until a few days later. I feel bad, and intend to go back to refresh my cut, and make it a point to go to the same person and specify that I’m tipping for the both times she did my hair!

    Is it not posted somewhere within the taxi that “a x% gratuity is expected”? … in Malaysia I usually tell the drivers to keep the change, but since tips are not expected, any extra, even if it’s just 20sen, is appreciated.

    (p/s: I’m no longer with! if you have the time, please replace ‘today’ with ‘blogspot’ and you’ll have my new site. Thanks!)

    • Bruce says:


      Tipping is not a law but a part of a service providers income. Waitresses, taxi drivers and some other occupations get a lower minimum wage because they will receive tips. Also a percentage of the income is added to the gross wage for taxes and then removed for the net pay. If tips were eliminated the business owner would have to pay higher wages and thus charge higher rates. The only now that saves is customer if they do not tip and the driver losses.

  2. Marvin says:


    • Bruce says:

      I hope you ride in my taxi someday. I welcome all customers, chat friendly, open the door if I get the chance and if a drop off at the the airport, I unload their luggage and place it on the walk and not in the street, even if I unload from the second lane over.

  3. Anthony says:

    Wow, sounds very complicated! Hang in there!!!

  4. Caesar Erel O. Macahilig says:

    Hello Bruce,

    How are you today dear friend? I hope that you get many trips with most if not all, tips from your passengers. Drive safely.

    Caesar Erel O. Macahilig
    Davao City, Philippines

    • Bruce says:

      I am fine but tired most of the time from the hours. I apologize for not replying to your email but working so many hours I forget at times. I hope you and your family are well.

  5. Tom says:

    Hope things are picking up for you there. Never easy to start over in a new place. If you ever make it down to Phoenix let me know.

    • Bruce says:

      I am working so much to survive, I do not know how soon I could visit Phoenix, but if you come to Las Vegaas, I know a good and honest taxi driver.

  6. To another topic. How is the economy looking there in the US? There is so much worries that economy is not growing enough and there are even worries about a double dip. Europe and the US seems slow at the moment. What do you people living in the US think about this? It would be nice to get some opinions from people and not only doomsday news from CNN.

    • Bruce says:

      Life is harder in the US with all the unemployment. Las Vegas is now the city with the highest unemployment. It will take a long time to recover and I think the US will never be as it was in the past.

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