Challenges That You Have to Face During Startup of Taxi Business

by Gert Erdmann Project Manager

Taxi businesses, while expensive to start, can be incredibly lucrative over time. A taxi service can start with a few cars and drivers and then gradually expand until you start earning. Before starting, consider if there is demand for taxi service in your area and make sure you ask for all the necessary and safe licenses.

Investigate the competition. Check online the sites of other local taxi companies. Investigate your services and rates. Consider if your area needs another taxi service. If you live in a relatively small town that does not have much demand for taxis, it may not be worth it. Make a list of ways you can get away from the competition by offering airport fares, reducing fees or large vehicles for group transportation.

Search vehicles and equipment. Buy vehicles that have already been modified to be taxis and thus save time and effort. Look online at auction sites or other sales sites that focus on taxis. Choose vehicles that are clean, with warranty and that offer enough space for luggage. If you modify vehicles to convert them into taxis, you will also need signs of roof lights, taximeters, yellow stickers or other bright paint with your company's name and information on where to place them in the vehicles. For most taxi companies, the only big initial cost is that of vehicles. Even if you start your business with a single vehicle, it can cost between US $ 10,000 and US $ 20,000, depending on the type and manufacturer of the car, if you want two or three in your initial fleet, the costs will increase proportionally. Buying used vehicles can save you money on the initial purchase, but be careful what you buy, since repairs can quickly make a hole in your finances.


Although technically you will not use gasoline until you receive your first customer, this is an important cost that you should take into account in your financial planning at the start. Evaluate the performance of gasoline in your vehicles and the service area where your taxi service will work to prepare a rough estimate of how far you can go with a gas tank. Factor a portion of your initial budget to pay for at least two or three tanks of gasoline per vehicle during the first month or two, based on current prices in your location. You should also be prepared in advance for repairs, mechanical maintenance and regular cosmetic maintenance, such as washing, waxing and vacuuming in your vehicles. Although you do not necessarily have to have cash, at least you must have a plan to obtain the funds you may need, such as a small business loan or line of credit


After buying vehicles and accessories, you have to choose a location with enough space to store the vehicles and a dispatch office. The centrally located sites are the best if you will provide services to the entire city.

Hire drivers and other employees. Choose drivers who have handled taxis before and who currently have the license to do so if possible. Ask for copies of management history and references to the previous companies in which they worked. Only hire drivers with excellent background. Consider dispatching yourself or hiring someone to do it.


After having everything ready, you have to apply for a commercial driver's license in your local motor vehicle department if you are going to drive. Register your vehicles and consult about any required inspection. Apply for a business license at your municipal office. Meet with an insurance agent to discuss the type and amount of insurance you need. Consult other taxi drivers to know where to get the best insurance prices.

Some areas allow you to open a taxi service with only a general business license from the county or city, which is available between US $ 20 and US $ 75 at the local secretarial office. Most towns and cities, however, have some type of regulatory body that supervises and licenses taxi companies, and the charges for acquiring a license to operate may be a little higher to cover the costs of the services. inspections. Many large cities have what is called a medallion system for taxis. Typically, a limited number of medallions are issued every year or every two years, allowing only a certain number of companies to provide taxi services in that city, and there is often a waiting list of applicants. Under this system, fees can cost anywhere from a couple of hundred to thousands of dollars, even if you go directly through the licensing office. However, most cities allow the owner of a medallion to sell it if desired (which means that you do not necessarily have to wait if you have enough money to make the best offer).

Advertise your taxi service. Place a large ad in your online area or print phone notifications to attract more customers. Publish in local newspapers. Make sure to include your services and contact information in all marketing materials. Create and distribute pamphlets with coupons to attract new customers to your business.


As with most other types of businesses, the exact costs of starting a taxi service will largely depend on the area where the company is located. However, during the financial planning process to start your taxi service, there are a number of important things that you should take into account. Carefully evaluating these tasks can help determine the overall costs of opening a taxi business, as well as help you prevent future expenses.

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About Gert Erdmann Freshman   Project Manager

8 connections, 0 recommendations, 36 honor points.
Joined APSense since, May 15th, 2018, From Paris, France.

Created on Aug 16th 2018 05:43. Viewed 474 times.


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