What Is the Formula for Taxi Fare?

There isn’t a single universal formula, but most regulated taxi meters follow this structure: Fare = flag fall (base fare) + distance-based charge (when moving) + time-based charge (in slow traffic or waiting) + surcharges + tolls + tip − discounts. In practice, the meter alternates between charging per distance and per time depending on speed, and local regulators define the exact rates and extras.

The Generic Taxi Fare Formula

Across cities, the fare is typically computed by a meter that starts at a base amount and then adds increments based on movement or waiting, plus mandatory fees and optional gratuity. A broadly applicable expression is:

Fare = Flag fall + Distance charge + Slow-traffic/waiting time charge + Surcharges + Tolls + Tip − Discounts

Here is what each term generally means and how it’s used in many cities:

• Flag fall (base fare): The amount shown the moment the trip starts.
• Distance charge: A per-mile or per-kilometer amount applied while the vehicle is moving above a threshold speed (often computed in small distance “steps”).
• Slow-traffic/waiting time charge: A per-minute amount applied when the cab is stopped or moving below a threshold speed.
• Surcharges: Time-of-day fees (e.g., peak or overnight), city or state taxes, congestion charges, airport access fees, or special event surcharges mandated by the regulator.
• Tolls: Bridge, tunnel, highway, or congestion-zone tolls passed through to the rider.
• Tip: A discretionary gratuity (in some places pre-set percentages appear on payment terminals).
• Discounts: Promotional or accessibility discounts where applicable.

Together, these components let you estimate a fare once you know the trip’s moving distance, time spent in slow traffic, and any location- or time-based extras.

How Meters Actually Count Distance and Time

Most meters don’t add the distance and time charges simultaneously. Instead, they add one “unit” at a time: either a distance unit (for example, 1/5 mile) when the cab is moving above a set speed, or a time unit (for example, 60 seconds) when the cab is stopped or crawling. Each unit adds the same monetary increment to the fare. Conceptually, this can be expressed two equivalent ways:

Two equivalent ways to express it

Increment model: Fare = Flag fall + (Per-unit increment × Number of units) + Surcharges + Tolls + Tip − Discounts, where each unit is either a distance step or a time step, whichever occurs first as the trip progresses.

Split model: Fare = Flag fall + (Distance rate × moving distance) + (Slow-traffic time rate × time at or below the threshold speed) + Surcharges + Tolls + Tip − Discounts.

Common surcharges and extras you might see

Local rules determine which surcharges apply and when. The following items are commonly added on regulated taxi trips in many major cities:

• Time-of-day surcharges (peak-hour or overnight fees).
• Municipal or state taxes (e.g., transit or improvement surcharges).
• Congestion charges for entering busy zones.
• Airport access or pick-up/drop-off fees.
• Holiday or severe-weather surcharges (occasionally).
• Credit-card processing fee (where allowed by regulators).

These extras can materially change the total, so even with a known distance and time, the final fare depends on when and where you travel.

Worked example with typical meter logic

Below is an illustrative calculation using typical (but not city-specific) values that mirror how many meters behave. Replace the numbers with your local rates to estimate a real trip.

Assumptions:

• Flag fall: $3.00
• Distance rate (when moving above threshold speed): $3.50 per mile
• Slow-traffic/waiting time rate (when at/below threshold speed): $0.70 per minute
• Moving distance above threshold: 7.2 miles
• Time in slow traffic or stopped: 9 minutes
• Surcharges (taxes/fees): $0.80
• Tolls: $6.94
• Tip: 15%

Calculation: Subtotal before tip = $3.00 + (7.2 × $3.50) + (9 × $0.70) + $0.80 + $6.94 = $42.24. Tip (15%) ≈ $6.34. Estimated total ≈ $48.58.

City snapshot: New York City (yellow taxis)

New York City’s Taxi & Limousine Commission (TLC) publishes detailed rates. As of recent schedules, a typical yellow cab fare uses:

• Flag fall: $3.00.
• Per-unit increment: $0.70 per 1/5 mile when traveling above 12 mph, or $0.70 per 60 seconds when traveling at or below 12 mph (the meter alternates based on speed).
• Common surcharges: $0.50 MTA state surcharge; $0.30 Taxi Improvement Surcharge; weekday peak surcharge (late afternoon/early evening); overnight surcharge; congestion surcharge for trips that start, end, or pass through Manhattan below 96th Street; plus any tolls. Airport access fees may also apply.
• Tip: Customary but discretionary.

Exact amounts and time windows are set by the TLC and can change; always consult the latest TLC rate card or the in-cab placard for the current schedule and applicable airport or congestion fees.

Why formulas differ across cities

Local regulators balance driver earnings, operational costs, congestion policy, and consumer protection. Some cities use simple per-distance/per-time tariffs; others add flat fares for airport corridors, zone pricing, or congestion-zone fees. App-based ride services may use dynamic pricing, which is different from regulated taxi meters even if both show distance and time.

Summary

The practical formula for taxi fare is: Fare = base fare + per-distance charge (when moving) + per-time charge (in slow traffic) + surcharges + tolls + tip − discounts, with the meter switching between distance and time increments as conditions change. Because surcharges and rates vary by city and can be updated, check your local regulator’s current tariff to compute an exact fare.

What is a $20 minimum on a taxi fare an example of?

price floor
I n t h e c a s e o f a 20 minimum on a taxi fare is an example of a price floor. A price floor is a government-imposed minimum price below which a good or service cannot legally be sold. It sets a lower bound on the price that can be charged. In the case of a 20minimumonataxifareisanexampleofapricefloor.

Do taxis charge by time or mile?

Are Taxi Rates Based on Time or Distance? Taxi rates are based on both time, and distance traveled.

How much is a 30 minute cab ride in New York City?

A 30-minute taxi ride in New York City could cost between $30 and $60, or more, depending on traffic conditions, time of day, and the specific rate code, as fares are a combination of distance and time. Since meters calculate fares based on both distance and the time it takes to travel that distance, a slower, 30-minute trip could be more expensive than a faster one covering the same distance. 
Here’s a breakdown of what influences the cost:

• Time and Distance: The meter charges for both the distance traveled and the time elapsed. 
• Traffic: You’ll pay more in heavy traffic because the meter keeps ticking up based on time, even if you aren’t covering much distance. 
• Rate Codes: NYC taxis use different rate codes, with “Rate Code 1” being the Standard City Rate. 
• Tips: The fare displayed on the meter does not include the tip. 

To get an estimate, you can:

• Use a Ride-Sharing App: While you’re asking about a traditional taxi, you can use apps for services like Uber or Lyft to get an idea of how much a trip of that duration might cost in your specific area. 
• Estimate on Your Own: If you have an idea of how far 30 minutes of driving would take you in NYC traffic (which is highly variable), you can roughly calculate based on the rate per mile and rate per minute. 

Are taxi fares based on distance or time?

If the vehicle is traveling below the speed limit, then the taximeter calculates the fare based on the time elapsed. To do this, it multiplies the distance traveled by the rate per kilometer and the time elapsed by the rate per minute.