Taxi vs Limo

What is the difference between a taxi, and a limousine?

There is a legitimate need and role for both taxis and limousines; but they are quite different—especially here in the Australian market, so it is important to be aware and informed. That way you can get the services you want, at the price point you want. If you are trying to get your mother from North Shore to a complex medical centre in Sydney CBD, you might want one kind of service. If you are a very drunk college student who wants a lift for three blocks to the next bar, with some leeway on demands for reliability and luxury, you might want a very different type of service. Of course there are good reasons that the two services should not be mixed.

The main differences between a taxi and a limousines or (taxi vs limo) on two broad areas: “service” and “equipment”—though we will also highlight important differences between how they are scheduled: “reserved vs. on-demand” modes of operation; and differences in “methods of pricing and charging.”

Service Differences

“Service” is easy to understand and includes everything from on-time reliability and levels of professionalism and care from the driver, to quality of communication (at all phases from reservation to follow-up), attention to in-vehicle comfort, having a complimentary newspaper, availability of music and news choices, access to a bottle of water, and many other elements that could affect your overall comfort, safety, and enjoyment of travel.

Equipment Differences

“Equipment quality” refers to the differences in quality, condition, and luxury associated with the vehicle itself, and continues through maintenance quality, cleanliness, and other aspects of the physical environment. Limousines and car services tend to offer equipment and services at the high end of the spectrum for both. Taxis tend to offer lower levels of service and equipment. This is primarily because taxis work under a different business model and tend to serve different customers, desires, and needs. As in most things, to some degree you get what you pay for, but that doesn’t make either one “right” or “wrong”—just different!

Reserved Limos vs. On-Demand Taxis

But there is an important third difference between taxis and limos which has to do with how they operate logistically, and how they make money. When you hire a car service, you are hiring a dedicated personal chauffeur and a car. You have hired a team to serve only you, to transport you or even to just be “on call” for a designated period of time. As much as you are buying a ride, you are also buying dedicated time. That team leaves the garage with you in mind, travels to meet you, takes care of your comfort while transporting you, and then drives home until the next mission. This is very different than how an on-demand taxi works.

Benefits of On-Demand Taxis

Taxis usually work as part of larger fleets, floating around like bees on a hive so as to always be nearby for that next trip. Taxis are about volume over quality. In most cities, and even in Kalamazoo, this system yields a great benefit: a specific taxi does not have to drive a great distance to come to you. They are set up for quick hops and short trips. You just grab the taxi cab that is closest, or call to have one dispatched to you from nearby. By floating all day as part of an on-demand fleet, each cab can scoop up many little fares per hour. This make the per-hour income for the cab decent, and the consumer cost often is often lower (but not always!).

Weaknesses of On-Demand Taxis

Taxis are not so much focused on comfort, luxury, equipment, service, or cleanliness, but on banging out lots of trips. Although on-demand taxi fleets are generally efficient and cheap, by definition the high-volume, low-price model demands less than luxurious vehicles, as it cannot “afford” the kind of service and personal attention that a dedicated car service would provide.

Remember that drunk college kid example? Where the taxi had masses of people stumbling in and out all evening—or worse? Is that the same vehicle, and exact same seat, that you want your frail mother to have to sit in tomorrow morning for an hour-long drive to a medical centre, or for a morning of shopping and a visit to the beauty parlour? Or that as a business person you want to sit in on the way to the airport while you spread out your laptop and papers? No! You want to work on your laptop in a clean, luxurious environment.

A taxi operator would be crazy to have a luxury vehicle, because it would get torn apart very quickly by the night time bar crowds and short-hop on-demand traffic. Operators would also be crazy to hire top-tier drivers who could serve as personal assistants and courteous attendants, because the additional cost would have no value to the bar-hopping college student.

Strengths of the Advance-Schedule Limousine model

Finally, it is important to realize that the on-demand taxi mode of operation is often unreliable when you want to schedule a specific pickup time. Why? Because the floating bees sometimes get tied up. They try to sneak in one more fare. Or maybe the last trip turned out to be to a destination on the other side of the county, and now your reservation just doesn’t work out so well for the cab company. We hear it from clients all the time. The on-demand taxi model is simply different than the advance-schedule, dedicated car and driver service model that limousines use.

Methods of Pricing and Charging

The way taxis and limos charge for services is another key difference. Taxis are always metered, so they charge for both time and distance—which can surprisingly add up to even a significantly higher charge for some trips, particularly where traffic or longer distances outside the city are involved!


There are some overly simple generalizations here, depending on the market and city size, but in general taxis tend to be efficient and cheap, but offer lower levels of comfort, service, and equipment. Limos and car services offer dedicated, higher-end care and personal attention, in more luxurious levels of equipment.