How To Start A Taxi Business

June 30, 2018 275 views
Image of a cab

Quick Overview of Operating Your Own Cab  Service

Everyone needs a place to go, especially in the city.

Cabs are one of the first choices people make when deciding to get somewhere.

If one knows the roads and is sociable, they can make quite a living as a cab driver. They can make an even better living if they run the whole operation.

A taxi service is a potentially profitable venture that you can invest on particularly if you live in the city and there are plenty of people who need the services of cabs.

In larger cities, many people rely on public transportation or cabs to get around. In other areas, cabs may not be used as much, but there will be less competition.

Regardless of the size of your metro area, starting a cab company and operating your own taxi cab can be a financially rewarding business opportunity

It is important for one to decide whether they want to go solo or if they want a lot of drivers. Regardless of what one chooses, the next step is to factor in the price of the car, having the meter fitted, getting insurance, and keeping in mind future repairs. Many banks will offer a loan for this type of business venture

How To Start A Cab Business – Tasks And Skills Needed:
Business Specific Tasks:

If you are planning to do all the business tasks or hiring or subcontracting tasks, here’s a list of tasks that need to be attended to when it comes to the business side of running a cab business:

  • Bookkeeping
  • Logging of hours
  • Scheduling
Industry-Specific Tasks:

Same as above if you plan to do everything yourself or get help, here are some of the tasks necessary to operate a cab business:

Pick up and drive customers to destinations

  • Log and record mileage and fares
  • Detail cabs (clean them)
  • Fuel cabs
  • Map city streets and major intersections
Approximate Daily Hours Needed:

General Hours of Operation: – When your business is open – These could vary significantly. In cities people never sleep, therefore one might need to run cabs 24 hours a day. If you are the only driver than it might be up to you to decide when the best hours are for business.

Hours Needed to Prepare – Before Opening and After-Hours Activities

Detail cabs, fuel cabs, outline (map) pickups or plans to park at the airport, bus stations, etc., order cleaning supplies/have cars cleaned, advertising and promotion.

Number of Employees Needed To Run This Business:

Minimum Number of Employees -During the Start-Up Phase:

You can start this business yourself on a full-time basis.

Number of Employees – Once Your Business is Up and Running Successfully:

  • Website maintenance
  • Record/Bookkeeping
  • General office
  • Customer Service
  • Cab drivers
  • Mechanic
  • Dispatcher
  • Detailer
Skill Requirements for This Business:
  • Great driving skills
  • Knowledge of immediate and surrounding areas
  • Good personality
  • Ability to work odd hours/on-call and 24/7
  • Near-perfect driving record/background check
  • Pass drug screening

The first step is for one to gain a license for driving a taxi. One needs to find out who regulates these licenses in their area. One idea is to visit the local city hall for more information.  Naturally, a driver’s license is also a set requirement, although additional testing may be required depending on your specific area.

Visit your local licensing agency to apply for any licenses needed to operate a cab in your area. Regulations and requirements will vary from state-to-state.

Approximate Minimum Startup Cost:

Bare essential: – Even the minimum price can be steep. It is suggested that one goes to a bank and attempts to get a loan to start this business. The price of the car and all the modifications alone can be out of many people’s price range so it might be a good idea to get some help.

Minimal exposure – There are several ways to advertise for free; however, the best way is to put signage in on the cabs themselves.

Necessary Equipment to Run this Business:
Necessary Start-Up Equipment & Supplies:
  • Computer
  • Printer
  • Cell phone
  • Website
  • Cab
  • GPS
  • Vehicle mileage meter
  • Insurance
  • Multiline Phone or Answering service

Supplementary Equipment: – Equipment or helpful products that you can acquire to once your business is off and running:

  • Garage for storing and repairing vehicle(s)
Monthly Expenses To Consider:
  • Wages
  • Phone/cell phone
  • Internet access
  • Permits
  • Advertising/Marketing
  • Utilities
  • Maintenance/Repairs
Special Requirements and Considerations For This Business:
  • Find out all you can about the trends in the industry. Know your competition, in particular, their strengths and weaknesses. This will help you identify your competitive advantage. In other words, this will help you figure out what you can give your customers that they’re not getting from the other businesses. And keep from emulating the competition’s strategy. Instead, make the most of your own advantage points.
  • Operators of taxi cab businesses have the option of choosing whether they will buy second-hand cars or purchase new cars for their taxi business. If you prefer to use new cars for your taxi cab business, it is important that you understand it will require you to have more start-up capital.
  • Maintenance of taxi cabs will make up a bulk of your taxi business expenses so it will be wise to find a mechanic who can repair and provide maintenance of your taxi cabs on a regular basis.
  • Operational requirements for a taxi business include having a garage for your yellow cab taxi business where you will keep taxi cabs that are not in use.
  • Modify your vehicle for taxi cab use. Taxi cabs are traditionally yellow, but painting the vehicle is optional. Make sure it is recognizable as a taxi cab. You need decals on the sides with the name of your taxi business and a telephone number.
  • Larger cab companies have dispatchers who answer the phone and relay information to the cabs; this is unnecessary when first starting out. Other major modifications needed are a cab meter and a top light (roof of the vehicle).
  • If you have the extra capital to spend, consider purchasing a vehicle specifically modified for taxi cab use. This would save you time from having to modify a vehicle. Contact other cab companies to determine what you should charge per mile. Cab prices vary between different parts of the country. Price lower to gain an edge over the competition.
Pros And Cons of Opening A Cab Business:

The Pros of Running a Cab Business:

  • In today’s fast-paced world, people need to go to lots of places, and they’re going to need someone to take them there. Cabs are one of the easiest and most affordable means of transportation for those who don’t have cars or don’t know their way around the city.
  • People will always be needing and always be using cabs.  You will not only make a fee based on the charge of the cab driving per mile or minute, but most patrons of cabs will also tip their drivers, allowing them to make even more money on top of their normal rate.

The Cons of Running a Cab Business:

  • This is not the safest job. There is a risk with picking up complete strangers and inviting them into an enclosed place. People who are under the influence of alcohol or drugs could create a problem.
  • This isn’t a terrifying occupation by any means, but it is a very specific means of customer service, one some might try to take advantage of.  One must be prepared for strange and off-putting people.
  • You may have to operate your cab for long hours while you get your business off the ground.
Type of Customers You Need to Attract:

Your customers will come from all walks of life and circumstances. Depending on if you live in a big city or rural area will determine the major types of customers.

Cab Business Resources:

Taxi Cab Electronics

Equipment and Supplies:

Taxi Cab Electronics