How to start a taxi and private hire firm

May 29, 2019
Taxi Hire Website Design

The first step in the creation or starting a taxi and private hire firm is to make a business plan which will make it possible to check the reliability of the project company and which will be useful to create partnerships or to find financing or associates in building a taxi booking or dispatch company.

With the high, increasing democratization of modes of transport and improved mobility, jobs in this area are on the high rise. Just beware, this is a highly competitive environment, the number of taxi transport companies created is steadily increasing. So that you can start with peace of mind, we put at your disposal various practical guides to help you set up a taxi and private hire firm.

The business plan of a taxi company is above all an important element for the entrepreneur himself, as it can help him to analyze his needs, and discover the potential weaknesses of the project before it is too later.

When the business plan of your future taxi business seems credible and attractive, then we will have to look at the financing of the company. If the funding is not already present, we will have to contact the banks to obtain several loan proposals to study and choose with all the cards in hand. In banks, it is always important to be able to show your seriousness by making a personal contribution to your taxi or private hire project.

 

 

 

Choice of legal status and drafting of company statutes

When starting a business, it is important to know which legal status will be most appropriate for the project being developed; in the case of setting up a taxi business, this is a choice based on simply creating the company for one or more people.

If the project is planned for one person, then it will be necessary to choose a legal status of a single-person company, but if it is planned to work with partners, it will be necessary to choose a status of company type.

When the legal form of the taxi company was chosen, then it is necessary to write the statutes which will define their organization: the bottom and the form. It is important to notify the information about the drivers who will be employed. The statutes must include a large number of necessary data.

The conditions to become a driver

To become a driver, you must pass a certificate of professional competence, have a driving license, a clean criminal record, no road crime, be trained in first aid and pass the road safety, management and regulation tests before accepting a driver.

How much does it cost to start a taxi business?

As with most other types of businesses, the exact costs of starting a taxi service will largely depend on the area where the company is located. However, during the financial planning process to start your taxi service, there are a number of important things that you should take into account. Carefully evaluating these tasks can help determine the overall costs of opening a taxi booking business, as well as helping you prevent future expenses.

Vehicles

For most taxi companies, the only big initial cost is that of vehicles. Even if you start your business with a single vehicle, it can cost between US $ 10,000 and US $ 20,000, depending on the type and manufacturer of the car, if you want two or three in your initial fleet, the costs will increase proportionally. Buying used vehicles can save you money on the initial purchase, but be careful what you buy, since repairs can quickly make a hole in your finances.

Team

Whether you buy new or used vehicles, you will still have to paint them or have some type of logo attached to identify your taxi company. The costs will vary, but often the labels are cheaper than a professional paint job, and you can usually place them yourself with a lot of care. You may also want to install lights on top of the cars to help customers more easily identify taxis, which cost between US $ 50 to US $ 150 per car, depending on the method of fixing, personalization and lighting options. Keep in mind that in some areas, this may be a regulatory requirement, and you must show certain identifying information, so check with your local licensing agency before purchasing. Meters should be purchased and installed in each vehicle, which often must be placed by a professional meter workshop approved by your local office of the Department of Weights and Measures. There is a wide variety of taxi meters available; the average cost is between US $ 200 and US $ 400 each. This does not include installation/calibration, which usually costs around another US $ 100. You will also need a taxi dispatch system and app or some kind of radio or mobile phone communication system (which is a bit archaic), so your dealer can contact the drivers and vice versa. Again, the costs depend on your area and the system you choose but expect to spend another couple of hundred dollars in advance, as well as a monthly charge for data subscription if you use mobile taxi dispatch software.

License

Some areas allow you to open a taxi service with only a general business license from the county or city, which is available between US $ 20 and US $ 75 at the local secretarial office. Most towns and cities, however, have some kind of regulatory body that supervises and licenses taxi companies, and charges for acquiring a license to operate may be a little higher to cover the costs of inspections. Many large cities have what is called a medallion system for taxis. Generally, a limited number of medallions are issued every year or every two years, allowing only a certain number of companies to provide taxi services in that city, and there is often a waiting list of applicants. Under this system, the fees can cost from a couple of hundred up to thousands of dollars, even if you go directly through the licensing office. However, most cities allow the owner of a medallion to sell it if desired (which means that you do not necessarily have to wait if you have enough money to make the best offer).

Insurance

In accordance with the laws of most states, any vehicle on the road must be insured. This goes double for taxis. Most states leave the establishment of the minimum insurance necessary to obtain a license to the local taxi license agencies, but even if there is not an adequate level of coverage, the best thing for you is to buy a policy more beyond the minimum required. You can expect to pay 20 per cent of the annual premium as a down payment, and then factor around the US $ 60 or more per week, depending on the number of fleets you have and level of coverage you have. Also, consider unemployment or independent employment insurance, medical insurance and life insurance, especially if you have employees. This coverage can increase your monthly premiums,

Gasoline and other contingencies

Although technically you will not use gasoline until you receive your first customer, this is an important cost that you should take into account in your financial planning at the start. Evaluate the performance of gasoline in your vehicles and the service area where your taxi service will work to prepare an approximate estimate of how far you can go with a gas tank. Factor a portion of your initial budget to pay at least two or three tanks of gasoline per vehicle during the first month or two, based on current prices in your location. You should also be prepared in advance for repairs, mechanical maintenance and regular cosmetic maintenance, such as washing, waxing and vacuuming in your vehicles. Although you do not necessarily have to have cash, At least you must have a plan to obtain the funds you may need, such as a small business loan or line of credit. Depending on your resources and the size of the business you wish to start, you can also choose to invest in the rental or purchase of a garage. In addition to your business office (not only your cars remain in better condition when stored indoors, but also you can also hire a mechanic at the company to perform maintenance and repairs at a significantly lower cost.

 

 

Taxi dispatch system

Every taxi company needs a taxi dispatch software that will be managing their affairs of booking, tracking and managing your fleet. You can now get an excellent app for taxi booking for Android and iOS. The application works in real time that has integrated a mobile payment that ensures that the payment for signed drivers can be automatically taken care of. There are two sides of the app. One for booking the taxi app like Uber Passenger for booking and tracking cabins and the Driver app that pilots can use to accept mobile booking requests.

With the Passenger application, your potential customers can register. To use the application, passengers can register directly from their mobile application.  For the automatic payment feature, card registration can be done by passengers directly from the application.  The booking application gives you the benefit of tracking driver availability and setting the recovery location after logon.

The passengers can:

  • Pickup Location: Passengers can set their location by setting the destination on the map or via Google Places.
  • Select the type of cabin: the type of taxi can also be chosen as well as explored various other details such as the price per km, the price charged per minute and the minimum fare for each type of cabin.
  • Price Calculator: In this case, the rate to reach a certain location is determined by calculating the distance between the pickup point and the destination point using Google’s APIs.
  • Live to track: As the taxi is booked, the passenger can update the taxi live on his application since the initial stage itself, such as the start of the cabin, the arrival of the cabin, the departure and the end of the journey.
  • Review and Assessment: As we are open for feedback from the passenger, from where they can rate the driver and write the textual review about their experience with your service.
  • Reservation History: The history of passenger bookings can be tracked using this app.

Driver Application:

  • Sign up: Drivers get the platform to register directly from their mobile app, but it is approved and live only once the administrator approves their profile.
  • Reservation: The driver has a limited time to approve or disapprove any new reservation request. They are shown PICKUP point with the distance of the current location and also the travel distance between the pickup point and the drop point.
  • Status: The driver is allowed to update the passenger when he has accepted or rejected the reservation, reached at the pick-up point, and dropped the passenger.
  • Reservation History: The driver has access to tracking the booking history and checking the status of each booking, including cancelled reservations.

Other additional tips

  • Build your client portfolio, you can start with friends, former co-workers, family members, even they could recommend your company.
  • The modality that is most used in the taxi companies in the collection by the commission, for it, the company contacts with the clients, the taxi drivers do the service, and the company charges a percentage of that service.
  • To define the rates, it is advisable to look at the market, compare the rates of other companies in the same category.
  • Preferably, try to make sure that the drivers, know all the alternative routes they could take, a differential advantage of your company could also be oriented by the speed.
  • Continuously monitor the drivers, so you can verify that the service is provided correctly, and correct any problems quickly.

And you, would you like to put a taxi business? More business ideas.