Wondering how to start a taxi service business? Well, it’s not a straight road (no pun intended), but it’s not extremely challenging either. The key to starting your own private taxi service is figuring out where the demand lies. Ask yourself things like:
- Is there an area that’s under-served?
- How much competition is there in my focus areas?
- How many rideshare customers are there in those areas?
- Is there any firm like Uber operating already?
Knowing the answers to these research questions will help you assess if there is enough demand to penetrate into these regions. Also, conduct a thorough SWOT analysis of your competitors to find out their weaknesses and the opportunities you can avail to have the edge over them. Once you’ve got a clear idea of what you need to offer, follow the steps below on how to start a taxi cab service.
Here Are Five Key Steps On How To Start A Taxi Service Business In 2021
1 – Setting up the Business:
You can have the best taxis in the world with excellent drivers, but if you haven’t covered the fundamentals of setting up your business, you won’t have a clear guiding light to reach your goals. Here are a few things to take care of before you put the wheels of business in motion (no pun intended).
Have a Plan:
Before we dive into the action, what is needed to start a taxi service is a good business plan. Add the following things to your plan:
- Hammer out all the details of areas you’ll be operating in. This is directly connected to the demand analysis you did before deciding to launch the business.
- Knowing the demand will also help you find out the number of cars/drivers you need, your financial outlook for the next five years, and how much money you need to get started now.
- Decide the routes and regional limits your taxis won’t exceed along with the time of the day or night they’ll be on the roads.
- Will you buy all the taxis, rent them or a mix of both? Depending on the initial capital you have, you’ll have to make a decision.
- Once you establish starting capital requirements, you’ll know where to arrange the funds from. Should you knock on the banks’ doors or go to an investor?
Make sure your funding covers the infrastructure, marketing, insurance, statutory and legal aspects of the business.
Getting an Office:
Anyone wondering what do you need to start a taxi service should know this –office space is an absolute necessity. You need to have a place from where you’ll control and coordinate with the taxis.
Make sure the place has storage space to park the vehicles when not in use. Renting out an office with this kind of space makes sense because buying one will put a HUGE strain on your budget.
Dealing with Legalities:
If you ask any taxi driver, ‘what do I need to start a taxi service?’ They’ll likely say two things; license and insurance. You need to obtain a license to operate multiple taxis at once. Here are the official requirements to follow depending on whether you’re in; London or Outside of it.
Next, you’d need an insurance policy. You don’t want someone wrecking one of your taxis and breaking your bank in repairs. Search the internet for a well-reputed insurance company and get quotes for your whole fleet of taxis. Go with the company offering the best value and affordable rates.
2 – Forming a Fleet of Taxis:
Now is the time to answer this question; how to start your own taxi service, because you’re done with the planning and legalities. So it’s time to get your very own fleet of vehicles. Consider the following things when making the purchase:
The vehicles you’re acquiring need to have all features of a taxi. Whether you’re getting new or used cars, consider the following points:
- Luggage space
- Passenger space
- Top lights
- Metering facility
- Fuel efficiency
Once you buy the fleet, it’ll need the colour scheme of a taxi according to the regional laws.
If you’re getting a fleet of taxis, you can insist on bulk discounts from the dealer to save some money. As a new business, you need to save as much as you can.
Furthermore, terms of delivery such as interior & exterior choices, delivery dates, and vehicle service terms should be in your favor.
Registration of Vehicles:
Once you acquire the cars, register them for commercial uses with all the necessary documents and permits required by your region.
Make sure to put the copies of these documents in every vehicle so your drivers can present them whenever verification is required on the road.
3 – Leveraging Technology:
Before your vehicles hit the roads, you need to get technological aid. In 2021, if someone asks how to start a taxi service? You don’t just tell them to buy taxis, and that’s it. Nowadays, you need a technological advantage over your competitors. Here are a few things to set up before the launch:
- Website: A must to have if you want to capture the piece of this gigantic pie that we call the Internet. Having a website set up with all the details about your business, contact information, and a booking section will ensure you have a presence among the local online community.
- Mobile Application: Ride-sharing has taken over the cab business, and in order to fight this goliath, you’ll need to arm yourself to the teeth. This means having your very own private ride hiring app on both Android and Apple app stores. The application should have all the necessary features, including reservation, GPS, payment options, rating system, and so on.
- GPS: Your fleet of taxis will have a GPS system connected to the central dispatch system that you’ll oversee. Plus, it’ll also be connected to both customers’ and drivers’ mobile apps, so they get the real-time status of each other’s locations.
4 – Marketing of Your Business:
Now’s the time you’ll be gearing up for a grand launch. Knowing how to start a taxi service business is not enough; you need to be out there – in front of your potential customers. Shout in their ears if you have to, but let everyone in your targeted regions know you’re in town. Here are some ways to do so:
- Social Media Marketing: Have your business’s Facebook, Twitter, and Instagram profiles set up professionally. Then, start posting about the launch of your business and run ads to get instantly in front of your customers – a professional social media manager can help you with all of this.
- Search Engine Marketing: Work on both paid and organic search engine marketing. For the paid one, run PPC (paid per click) ads with a professional digital marketer’s help. For organic one, hire an SEO (Search Engine Optimization) professional to rank your website for search queries related to your business. For instance, if you target the search query ‘ what is the cheapest taxi service’ and rank on the first page, your website will come up every time someone searches this; pretty cool, isn’t it?
- Traditional Marketing: Have banners and ads designed and put up at key areas of your service regions. From terminals to restaurants and main intersections, depending on your budget, gain as much visibility among your customers as you can.
- Rewards & Promotions: All of the marketing techniques mentioned above would require you to have some sort of offer to attract customers initially and beyond. Come up with rewards, loyalty programs, and X% off promotions to grab people’s attention and start getting customers.
Running a marketing campaign both locally and online will get people to start using your service. Once you get them to install your mobile app on their phones, it’ll keep reminding them of your business every time they’re going through the apps section of their phone. And if your service is excellent, they’ll book you again.
5 – Getting the Drivers Ready:
Alright, we’re nearly done with the planning and marketing stuff. Now it’s time to go over some things when hiring drivers for your private hire taxis.
Vetting the Individuals:
Once you post the ‘Looking for Drivers’ ad in the classifieds and on LinkedIn, you’ll be flooded with applications. Being a leader of your business, it’s your responsibility to skim through the CVs and shortlist the drivers you find to be most experienced and skilled.
Just make sure to do a thorough background check of every individual you decide you call in for an interview. You don’t want someone with a big rap sheet cruising around in your cabs.
Interviewing the Individuals:
When you finally call them for a 1-on-1 chat, notice how polite and friendly they are; this is the number 1 ingredient for an exceptional customer experience. See if they have a valid driver’s license and good experience as a taxi driver.
Lastly, take a driving test. Go for a test drive, pass through populated areas of the city, and see how they handle the car.
Set Some Rules:
You’ll have to have some company ethics and code of conduct that your drivers firmly abide by. Make it clear that they need to follow the rules religiously, which include:
- Customer-first approach
- Safe driving
- Being on time
- Being in proper dress code
- Maintaining the vehicles
- Following all driving laws
Make it very clear that you’ll not be compromising when it comes to the rules. Failure to follow them can result in termination.
We’re hoping you’ll now have a clear idea of how to start a taxi cab service. Just be sure to have a solid business plan as it’ll work like a roadmap for you to follow – hire a professional for this if you have to.
Lastly, make sure to invest a good amount in marketing and run regular promotional campaigns. Also, offer nothing short of extraordinary service to customers; this will get you more users via word of mouth.