How taxi companies work

how taxi companies work

We are often asked how a taxi meter works out the fare it displays. It is obviously worked out in some way from the length of the taxi ride, but how?

We will try to explain this here.

This description related to the standard charging method used by taxi meters in the UK and also in many other countries. It's often called "Time or Distance" charging and is described in the European Standard for Taximeters: EN50148.

The Fare Table

In the UK, local authorities publish "Fare Tables" which taxis display in their vehicles. If the taxi has a taxi meter, this should be programmed to charge in accordance with this chart.

A section of one of these Fare Tables is shown below. As you can see, it includes information in the form of distances, times and amounts of money.

It is the job of the Taximeter Dealer to program this information into the taxi meter.

Scan of fare table

The table above describes a 2-stage tariff which starts out charging £2.00 for the first 265 metres of travel and after this, a rate of £0.20 for every further 265 metres.

Paying in Advance

You "pay" for each section of your taxi ride in advance. This is why the taxi meter shows £2.00 immediately in our example, even if you've not moved off yet.

So when the taximeter is first put into "Hired" mode, you pay £2.00, and it buys you 265 metres (and an amount of time which we'll talk about later).

Distance and/or Time

In our example, let us take the part of the journey after the first part, when we pay £0.20 for each 265 metres. We'll deal with the first part (£2.00 for 165 metres) later:

In the Fare Table, it also says "WAITING TIME - for every 60 seconds or part thereof, £0.20".

So, when £0.20 is added to your fare, it "buys" you 265 metres of taxi ride. If you're not moving, you'll get 60 seconds of "waiting time".

But what happens if you're stopping and starting, or moving slowly, for example in heavy traffic?

The answer is that the taximeter "mixes" the two, depending on how fast the taxi is moving.

Now here's the difficult part:

In our example, there is a speed at which your £0.20 is used up at exactly the same rate regardless of whether you calculate it by distance (265 metres) or time (60 seconds).

It is the speed at which you would travel 265 metres in 60 seconds, i.e:

* 265 metres per minute, or:

* ( 265 x 60) = 15900 metres per hour, or:

* 15.9 km/h

This is called the "changeover speed" and the taximeter uses up the £0.20 at the rate of £0.20 per 60 seconds below it, and £0.20 per 265 metres above it.

The changeover speed is worked out as:

Taximeter changeover speed formula (metric)

Or in imperial units:

Taximeter changeover speed formula (imperial)

What this means is that, above 15.9 km/h, it doesn't make any difference what speed your taxi moves at, it costs £0.20 for each 265 metres. However, below 15.9km/h, it costs £0.20 for each 60 seconds.

This is why the same

journey can cost a slightly different amount, depending on any "waiting time".

This doesn't really explain how the taximeter works it out, but it shows you what it works out. For a more detailed explanation, see the pulses paragraph.

How Much Time for the first £2.00?

It was helpful of the Fare Table to tell us that £0.20 buys us 60 seconds or 265 metres, but what about the first £2.00?

Does this buy us 10 times as much time? You might think so, but this is not always the case.

Some Fare Tables, such as the one in London, tell us how much time is bought with the first "payment", but not our example.

So we have to work it out somehow. It is sometimes calculated so that the changeover speed stays the same as for the rest of the ride.

To make this true in our example, the "initial waiting time" actually 60 seconds, which makes the "initial changeover speed" also 15.9km/h.

Calendar Control

You may have noticed that our example also says:

Scan of fare table

There are actually another two "tariffs" or "rates" like the one we have seen above. One of these is below:

Scan of calendar control part of fare table

So taxi meters also have to include this version of the tariff as an option.

Some taxi meters allow the driver to press a button to choose between the "tariffs", but taximeters are increasingly "calendar controlled" (for obvious public confidence reasons!)

This means that the taxi meter needs an accurate calendar-clock built in and needs to include the "20.00 to 06.00 hrs, Monday to Friday" information, so it can select the correct Tariff.


This section explains how the taximeter calculates the distance/time charging we described earlier.

The taximeter finds out the distance travelled by the taxi through a series of electrical pulses received from somewhere in the taxi's electrical system. Each pulse represents a certain distance of travel.

This distance depends on the mechanics of the vehicle, but let us assume that each pulse represents 1 metre.

So a series of pulses would represent distances as below:

Diagram showing taximeter distance pulses

In our example, the first £2.00 buys us 265 metres. The taximeter works this out as 265 pulses.

So the meter starts counting pulses, and when it reaches 265, the first £2.00 is "spent".

Now for another difficult part:

To deal with the Waiting Time and Changeover Speed, the taxi meter generates "time pulses" internally. In our example, these are produced at the rate of 265 pulses in 60 seconds. or one every 0.226 seconds..

At any time, the meter counts whichever arrives fastest: the distance pulses, or the "time pulses".

Diagram showing how time and distance pulses are mixed in taximeter software

When the counter reaches 265, the £2.00 has been "spent" and the meter adds the next £0.20 and calculates everything again.


We hope that this article has helped clear up a few misconceptions, and has answered more questions than it raises. If you have any questions, or would like to add anything, please feel free to e-mail us at: .


Category: Taxes

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