Planning to Start a Taxi Company? Here’s What You Need to Know
In a world full of Cargo, Uber, and Lyft services, taxi cabs have still not lost their appeal. They are certainly needed, even if only in certain areas. What better time to start a taxi service than now?
Finding the Right Market
One of the most important things about starting a business is supply and demand. That is why one of the first steps in your business plan should be to research if there is space for another taxi company in your area of choice. You have to find out if the area is big enough for another cab service. If it is well-covered, maybe a taxi service is not needed, and your taxi business would be doomed to failure from the start.
This is the main challenge, and it leads to another one: How would you make your cabs stand out from the rest? You can look into ads, websites, and even social media to get to know your competition. Another thing that you should do is ask around about their rates, services, and why people use them. This info can help you decide which direction to go to make a dent in the industry.
The Costs: Equipment and Insurance
Once you see that you can start a cab business in your area of choice, it is time to gather the equipment that you will need. How much would it cost? Here’s an example:
- A used Sedan may cost you 10,000 USD
- A new model (depending on the make) could cost you double the amount (20,000 USD)
You could go for a used car. However, you would have to look into the downsides of the used car since it has experienced wear and tear. Sometimes, it may be easier to have at least one new model that is fresh out of the box with nothing holding it back. However, this all depends on your budget. Another issue is the maintenance of the cars. It has to be done regularly, not merely yearly.
Other things you would have to account for include signage, a taximeter, and even a new coat of paint. Signage is important since this can be the main way for you to advertise your company. The difference between taxis and Uber is that people flag down taxis when they see them driving in the street instead of using an app. Plus, a paint job can also help your brand stand out — think Yellow Cabs in New York.
The taxi meter is the most important item you need (other than the car itself) since this is how you and the professional driver you hire can keep track of the fees.
Ways to Advertise
Once you have your drivers, equipment, and paperwork ready, it’s time to advertise. You can advertise on the cars themselves with your business number on the sides. Other ways can be through digital marketing, such as starting a site and using social media. Keep in mind that you would have to stay on top of these outlets so as not to lose future customers since people do not like to wait. You may want to consider hiring someone part-time just to keep track of your social media accounts in the future.
You can also go the old-school route of posting in newspapers. However, one of the best things that you can do is strike up a deal with local bars and hotels. Hotels have visitors who might not have cars — hence, they would want to use your services. On the other hand, bars have drunk customers who have to get home safely.
Hiring Your Drivers
Now that you have gotten the word out, it’s time to put it into action. You can even hire drivers before you start looking for clients. You can use job alerts targeting taxi drivers. However, you should have an application process to help you find the best of the best. Do they have a valid driver’s license? How many years of experience do they have? Do they use GPS? If not, can you supply them with one? Did they pass the drug test? This test is something that has to be done regularly as well. It is part of a taxi driver’s job to be tested.
The process of taxi driver hiring can be something that can make or break your company, so put more time into it than anything else. A car can look good, but if the drivers are incompetent or unpleasant, you can kiss your investment goodbye and rip up your business license.
If you follow the above steps, you should have your company up and running in a decent amount of time. Taxis will always be needed.