How to Start a Taxi Business

If you are looking to start a taxi business, you will need to do a lot of meticulous planning and consideration, the same as with other types of businesses. Taxi businesses are amongst the most profitable businesses. However, you have to understand how to start one before commencing the planning process. In case you want to learn how to establish a taxi business, the step by step guide below will prove to be very useful.

1. Research Local Demand

The initial and fundamental step when starting a taxi business is doing research on the demand for such a business in your area. Where you choose to locate your business is crucial. The last thing you need is to become a taxi driver when there is no one in that area who is in need of this service. You need to ensure that there is a substantial demand in your area by looking at driving apps. Alternatively, you can choose to locate your business in an area that has a greater demand for taxi services. 

2. Find A Car

Once you are certain that people in your area need taxi services, you have to acquire a car to kick off your fleet of company cars. Since you are just getting started, renting a car online is a good option. You have to put into consideration if you want to start with a sedan or a bigger van. Don’t forget to take into account your area when making a decision. In case your taxi service will be situated in a college town, then a van might be the best option. If you are looking to operate an airport taxi service, a good choice would be a luxury sedan. You have to put into consideration your budget and business plan. Then, find a car to start driving people so as to earn money.

3. Get Licensed

After you have acquired a car, the next step is getting taxi cab licensing. This is a requirement if you are looking to run a business that offers you and your future clients legal protections. Taxi regulations differ from state to state and even city to city. Therefore, you have to do research on the regulations in your area. However, a lot of taxi apps are altering recent laws that let any person become a driver. Then, adhere to stipulated laws and regulations to a T. Failing to do so will crash your business even before it has taken off.

4. Ensure That You Have Insurance

In order to get a license as a taxi driver, you will need to have a proper insurance policy. When starting a taxi business, getting insurance will be one of the heftiest expenses you will incur. However, there isn’t a way around it. Ensure that you already have in place a proper commercial auto policy. Do some shopping around to find a plan and price that suits your needs and budget. You can compare taxi insurance here.

5. Get A Taxi Meter

If you plan on becoming a taxi driver, you will need to get a taxi meter for your first cab. It is smart to acquire one that also supports credit card processing. A lot of people don’t carry around cash nowadays. The device should also have a certificate of compliance that proves that it is approved by the federal government. Ensure that you acquire a taxi cab meter that has a C.O.C. in case you plan on charging customers per mile.

6. Download GPS Navigation

At this stage, you are very close to beginning driving for hire. After you pick up clients, they definitely want to reach their destination within the shortest time possible. Ensure that you download the best navigation app. Such an app will help you avoid traffic, unnecessary delays, and long routes. In addition, there won’t be a need for memorizing an entire area. Instead, you will just have to enter an address and you’ll be good to go. There are a number of GPS navigation apps on the internet, hence, make sure you get accustomed to one before you begin driving for pay.

7. Start Driving

You are finally ready to start driving. After you have completed the steps mentioned above, you can begin marketing your business and promoting it to customers. (Check our post “What Is Marketing” to find out more). In the early stages, you should think about advertising in local papers, concert venues, bars, and hotels. These are good places to find customers that may be looking for taxi cab services. After you have made your first ride, you can legitimately state that you have successfully started your own taxi cab business.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.