The U.S. Bureau of Labor Statistics reports that employment for taxi drivers and chauffeurs is expected to increase 20 percent through 2020. People like taxi services because of the flexibility they offer in terms of costs and time. The costs for you to start a taxi business will vary depending on the number or types of taxis and licensing regulations in different states and cities. The taxi industry, however, is one in which small companies can compete effectively with larger firms.
Buy a Taxi Franchise
You can kick-start your taxi cab business by purchasing an existing taxi company in your area. Make sure the company has a strong track record of giving good service. The ideal franchise should also have brand recognition. Conduct market research on consumer needs to avoid purchasing a franchise that is out of touch with your market.
Obtain Appropriate Licenses
Obtaining a license is key to getting your taxi business off the ground. Licensing requirements vary according to your location. Ask your state department of motor vehicles or municipal licensing office about licensing requirements. Licensing could amount to $3,000 every year. In some metropolis regions, such as Chicago, New York and Boston, you have to purchase a taxi medallion, which are a kind of license that allows you to operate taxis. They can cost up to $80,000 or $90,000.
You must have vehicles that are properly outfitted as taxi cabs. You could paint your cars a bright color, such as yellow, or utilize cars that stand out. You can purchase brand new vehicles or used ones, although used, high milage cabs could eventually cost you more in maintenance. You and your drivers must apply for a taxi driver’s licenses and your must have liability insurance for the taxis and drivers. Insurance costs for your taxis could cost around $100 for every week. You should print the name of your business and your contact information on your cars. You also will need a garage to park or repair the vehicles. The building probably would include office space. You could have to pay $1,000 monthly toward the operations of the office. It must be big enough to accommodate dispatchers, accountants and mechanics.
Obtain Electronic Dispatchers
You will need electronic dispatching software. It consists of mobile computers in the taxis that are connected with dispatch software in your office. Electronic dispatch software streamlines the dispatching of drivers so you can handle multiple trips. Dispatch systems also produce comprehensive reports on locations that need your services, miles traveled, time logged and other details.
Hire Drivers and Dispatchers
It's best to hire drivers who have prior experience in operating taxis and who have commercial driver’s licenses. Ask for their references from previous employers. Some drivers may work at night when you are away from the business. You also need to hire courteous dispatchers who can attend to consumer needs, and they should be able to operate the modern communication equipment comfortably. Do interviews to evaluate the suitability of prospective dispatchers. You should seek references from their previous places of work, as well.
- Bureau of Labor Statistics: Taxi Drivers and Chauffeurs
- First Research: Taxi & Limousine Services Industry Profile
- Gaebler.com: Opening a Taxicab Services Business
- Bright Hub: Tips for Starting a Taxicab Business
- Character & Wealth: Taxi Medallions for Wealth Building—Focus on Chicago, New York, Ignore Boston (for now)
- Clay Collins’ Business Ideas: How to Start a Taxi Service
- Mentor Engineering: 6 Ways to Improve Your Bottom Line with Electronic Dispatching
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