As per a recent answer:
A Private Pilot certificate removes a lot of the restrictions of the recreational cert. You're no longer restricted in where you can fly*, the number of passengers you can carry, can fly at night, and are even allowed some (very limited) business use. You still can't be compensated for being a pilot, though.
A Commercial Pilot certificate allows you to work as a pilot, and fly for compensation or hire.
But... why does this distinction exist? If you can be trusted to fly safely on a Private Pilot license, why can't you be trusted to do the exact same thing while getting paid?