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How to Start and Run a Successful Taxi Business
by Elena Wed, 01/29/2014 - 16:23
If you enjoy driving and working with people, then opening a taxi business may prove to be the best decision you have ever made. Taxi businesses, while expensive to start up, can be incredibly lucrative in the long run. An encouraging fact is that many taxi companies expand within their first year.
However, before you start driving, consider whether there is a demand for a taxi service in your area and make sure to apply for all necessary driver's and business licenses and insurances.
Read the following steps to learn how to start a taxi company.
Research the competition and map out a plan. Look online at the websites of other local taxi companies and try to figure out what services they offer and the rates. Consider whether your area needs another taxi service. If you live in a relatively small town that doesn’t have much demand for taxis, it may not be the best business move. If that is not the case, make a list of ways that you can set yourself apart from competitors by offering airport shuttles, reduced rates or large vehicles for group transportation.
Another important aspect is to determine when and where you will drive, to find out where taxis make the most money and at what time of the day, etc..
And last but not least, you have to decide where your office is going to be, how many taxis you are going to start with and where you will park each vehicle.
Search for vehicles and equipment. The best way to go is to purchase vehicles that have already been modified for taxi use because it will save you time and efforts. You can start your search by looking at online auction websites or other vehicle sales sites that focus on cab sales.
Select vehicles that are clean, guaranteed safe and offer enough trunk space for customers’ luggage. Vans are usually the first choice these days, but there are many sedans in use as taxis too. (The new Vans with the automatic doors are a big hit with the customers.) Choose a vehicle that is not too old or worn out. A well maintained vehicle will serve you well for many taxi miles to come.
If you will modify existing vehicles for taxi use, you’ll also need top light signs, taxi meters, ) extra large voltage regulator, 2-way radio & connection (if necessary), yellow or other bright paint and decals with your company name, and contact information to place on vehicles.
Apply for licenses and insurance. Apply for a business license at your city clerk’s office. In most places you will pay a filing fee and have to wait until your background is checked. It could take weeks just to find out if you are approved to be Taxi Owner.
Apply for a commercial driver’s license at your local department of motor vehicles if you will be driving. Register your vehicles and ask about any required inspections. Meet with an insurance agent to discuss the type and amount of insurance you’ll need. Ask other local cabbies about where to get the best insurance rates.
If you decide to start with a small fleet of cabs, then you will need to hire drivers. When interviewing the candidates, ask for copies of driving records and references from previous companies they’ve worked for. It is advisable to only hire drivers with excellent records.
Advertise your taxi service. You can start with putting together your own website and submit it to local listings. People often use their phones to find a taxi service and if your company is high in the local list results, the chances are you will get a good business.
Create and distribute fliers with coupons to attract new customers to your business. Make sure to include your services and contact information on all marketing materials.
Operating your new taxi business . As with any other business, record keeping is vital to success. So your records must be very well kept. You must keep a log of all calls you take for taxi orders, you must keep a running log of your mileage, odometer and meter reading.
In your record you need to include the time picked up, where you picked up, where you dropped and what time you dropped and the amount of the fare plus extras for each client.
How much gas you use in business, how much you spend on supplies, food on the job or entertaining customers, and everything else that pertains to the operations of your business.
If you have drivers work in your taxi you will have to figure out how you will allow them to pay you for the use of your taxi. There are several ways like Lease Driver & 50/50 Drivers.
Follow the 6 steps and you will be well on your way to have a successful taxi business.
The author is owner of CityCab Transportation, a taxi company in Destin, Florida