Taxi firms can become profitable in many different areas and are not limited to urban locations, making them particularly attractive to entrepreneurs who do not wish to relocate.
What skills will I need?
Organisational skills are essential, particularly as you grow. You’ll need to not only be aware of what your drivers are doing but also your office staff. If you plan to stay at the base and maintain the radios then you’ll need to be able to multitask effectively at all times. You’ll also need knowledge of the local area, whether you’re driving a vehicle or staying behind at base. Passengers want a taxi as soon as possible, and you need to know which jobs to give which drivers in order to minimise waiting time for customers.
A considerable local geographic knowledge is essential. For this reason it makes sense to start taxi companies in your local area, but don’t do this out of convenience if the market is saturated or non-existent. Profitability is your main concern; choose the most potentially profitable market even if you have to learn about the local area from scratch. Good driving skills are also essential
Start-up costs for taxi firms can be considerable. You’ll need a fleet of cars unless you request drivers supply their own vehicles, which is becoming more popular. You’ll also need to pay for radios, signage, and electronic systems such as meters. Marketing and promotion will also be important as it’s unlikely people will use your service unless you’ve achieved some type of presence in the marketplace. Patrons are commonly advised about the dangers of unlicensed taxis and this makes marketing, promotion and a strong and reliable brand essential.
Insurance and compliance
In most areas you’ll need an ‘operator’s license’ to practice as a taxi company. This is supplied by the local licensing authority, typically your local council. Contact them in advance to find out how applications are processed as the rules are likely to differ throughout the country. Taxi offices will also need permission due to the high vehicular activity, and taxis themselves must be licensed and display these licenses clearly. Be aware that taxis have to be registered as one of two types: private hire vehicles that can only be pre-booked, and vehicles that can make unplanned pickups. Drivers themselves must also be registered, both owner drivers and employees.
Your first step
Market research is essential as you’ll need to find a market that’s developed but not too saturated. You’ll also need to decide whether you’ll operate with owner drivers (employees who provide their own vehicles) or provide cars yourself. The latter option is far more expensive. Talking to your local council is also a good idea as you’ll need to know more about the application process for operator licenses and what compliance regulations you’ll need to fulfil before you can get one. If your geographic knowledge is sub-par, work on this until you’re an expert.