Motorists have been warned they could be slapped with £2,500 fines for breaking a little-known driving law while travelling on UK roads.
Experts have explained that drivers could face a steep fine as well as risk invalidating their insurance cover if they are found to be charging passengers and making a profit from providing lifts.
While car sharing can be a popular practice, if drivers charge friends or family members, they may be seen as operating as an unlicensed taxi.
This could breach the Public Passenger Vehicle Act 1981, which details how passenger contributions should be arranged before the journey and should only cover the running costs of the vehicle, such as fuel, and wear and tear.
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Drivers can be charged under the Public Passenger Vehicle Act 1981 for operating as an unlicensed taxi
|GETTY
If the contributions exceed these limits, drivers could be fined up to £2,500 by the Magistrates' Court, along with other penalties such as driving licence points and disqualifications.
Ian Wilson, car insurance expert and managing director at Tiger.co.uk, said: "Sharing a car is a great way to split the cost of your journey and reduce your carbon footprint.
"Most drivers are more than happy to offer a friend or a co-worker a lift, and there is nothing wrong with accepting a few pounds from passengers to help cover running costs, particularly given the fluctuating prices of fuel."
He explained that this is because many insurance providers may consider this to be operating an unlicensed taxi, which is not typically covered in standard policies.
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| GETTYThe expert did note that while "it is perfectly legal" for drivers to take petrol money from their friends and family in exchange for the occasional lift, there is a limit.
Police have been cracking down on groups who use social media platforms to arrange illegal "cash for lifts" schemes, essentially operating as unlicensed taxis.
Dorset Police recently found a closed Facebook group with 7,000 members in Bournemouth, which was set up to buy and sell car journeys online through an illegal taxi service.
Meanwhile, in Jersey, reports have found that the illegal taxi trade is valued at a staggering £1million a year, with some drivers reportedly making as much as £300 in a single night by providing lifts.
Mr Wilson added: "Issues can arise if you are making a profit from doing this, as it can be legally classed as a 'hire or reward' transaction.
"This would require taxi insurance rather than standard car insurance, which typically only provides cover for social, domestic, and pleasure use."
He said this is a "relatively unknown law" with many "unwitting motorists" risking being caught out by it. "To make sure you aren't benefitting financially from your act of kindness and stay on the right side of the law, you can use legitimate and regulated ride-sharing apps," Mr Wilson warned.
The expert urged drivers to calculate a suggested contribution per passenger for journeys based on the trip length to avoid being caught out by the law.
Drivers can be fined for charging passengers for journeys
| GETTYEarlier this year, a case of an unlicensed taxi in Ipswich resulted in a man being found guilty of driving without the proper requirements and was fined the maximum penalty available of £1,000.
He was also ordered to pay a victim surcharge of £400 and prosecution costs of £760, totalling £2,160, which was to be paid within 28 days.
Councillor John Cook of Ipswich Borough Council said: "Ipswich Borough Council expects everyone in the licensed trades to be honest, to abide by the rules of their licence, and to comply with the law.
"I'm pleased that the court backed us by fining the driver concerned and making an order for the costs incurred by the Council. More importantly, it is right that we act robustly to maintain the safety of hackney carriage customers."