How to Start a Taxi Service

Business Overview:

If you’re looking to start a business that provides an essential service to your community, you should consider learning how to start a taxi service. Once you have determined that there is room for one more taxi business in your area, you need to find out what types of permits and licenses are necessary. Visit your local Department of Motor Vehicles for a special taxi driver’s license and check with city hall for regulations. You may need to display something specific inside or outside your cars that shows you are properly licensed with the city. You’ll also need liability insurance for your cars and your drivers. If you want some insider information on how to start a taxi business, go to neighboring cities (that would not be in competition with your taxi business) and talk to taxi service owners. They can offer you some tips that you won’t find elsewhere. Next, you’ll need to decide what types of cars will work best for your business and if you want to buy new or used vehicles. If you plan to do a lot of shuttle-type business at the airport, you may want larger cars or minivans. To set yourself apart from the standard yellow cab, consider a more offbeat car like a PT Cruiser. It might be wise to form a relationship with a local mechanic who can handle all your maintenance needs. In addition to purchasing radios and meters for your cars, be sure to put advertising on your cars that includes your company name and phone number. A website isn’t as necessary for a taxi service as it is for some other businesses since most of your customers will be calling your dispatcher. Try to get a business phone number that’s easy to remember like 555-TAXI or CAB-FARE. And speaking of cab fare, it is likely that your city sets the standard rates you can charge so you won’t need to worry about pricing yourself too low or too high. You’ll make your money with volume of business and excellent customer service. Quick response time and the ability of drivers to accept credit/debit cards will ensure repeat business from your customers. Starting a taxi service is one of the best scalable business ideas available because you can start with just one car and one driver. As business picks up, you can add cars and drivers.

A Day in the Life of a Taxi Service Owner:

Your daily duties will vary depending on your role with the business. If you are the sole driver, your day will consist of taking calls and picking up and dropping off customers. If you are acting as the dispatcher, you will take calls and dispatch your driver(s) to various locations in the city. If you have a dispatcher working for you, you will spend your day making sure your business is running smoothly.

About Your Customers:

Your customers will be individuals needing taxi services to get them around town.

What You Need to Start:

• Taxi business plan
• Car(s)
• Driver(s)
• Liability insurance
• Business license and permit
• Taxi driver’s license
• Meters
• Radios
• Garage or other place to store your cars
• Computer with dispatch and finance software

The Good:

• Taxis are always needed.
• You can start this business with one car and add to your fleet as you can.
• You can hire drivers to do the work for you.
• You are likely to get repeat and referral business.

The Bad:

• For drivers, the hours are long and irregular.
• Start-up, maintenance and gas costs can be high.

Resources:

• Taxicab, Limousine and Paratransit Association
• International Association of Transportation Regulators
• Bureau of Labor Statistics on Taxi Drivers and Chauffeurs
• Wikipedia on Taxicabs

About The Author

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