Running a taxi business can be a hugely profitable and rewarding job. Being your own boss can be a great way to get out of the grind and become an important service for your local community and beyond. So, if you’re looking at a career as a taxi driver or taxi service owner, let’s look at the steps you need to take.
What Kind of Taxi Service Will You Offer?
Before you get started, you need to do some research into taxi services and decide what kind of service you want to offer. There are three main types of taxi service in the UK, each offering significantly different things.
Public Hire
A public hire taxi is one that can be hailed from the street and carries a lit ‘taxi’ sign when not in use. Public hire cabs include Hackney carriages (London black cabs) and can’t be booked before the journey.
Public hire taxis often operate in busy city centres during what can be quite unsociable hours. These are the types of cab you would see picking up patrons on busy weekend evenings.
Private Hire Taxis
Private hire taxis are pre-booked cars that do not pick up customers from the street. They do not carry a lit ‘taxi’ sign and must be ordered beforehand by phone or online booking.
Private hire taxis are often relatively high-end vehicles that operate during more social hours doing journeys like airport pick-ups and sometimes school runs. They are often considered safer to drive due to the nature of their use.
Transportation Network Taxis
TNC (transportation network company) are businesses like Uber and Lyft, whereby driver-partners are linked with customers via an app. It could be counted as a private hire taxi service, however due to its technology, it could be classed as its own type of service as well.
These types of companies have become hugely popular in recent times, so it is an option for drivers who do not want to set up their own company but would like to get an idea of what being a taxi driver encompasses.
What Is Your Niche?
With such a huge market, you need to have an idea of what kind of taxi company you want to be. As a prospective business owner, you should consider how you want your business to operate and what you can offer your customers that makes you stand out.
A lot of this will be influenced by the area in which you plan to set up your business. For example, if you are located in an urban area, you may want to set up a minicab company. City centre taxi firms can earn a lot of money due to the multitude of potential customers but if you want to work in London as a black cab driver you will need to take a test – known as The Knowledge – to get your taxi licence.
Or, you could look at setting up an airport cab company shuttling various people to their flights. For this you would need your PHV (private hire vehicle) license and a good knowledge of the route to and from airports in your area. Other ‘shuttle’ type services include school run taxis, venue shuttles such as to and from sports grounds or music venues.
If you want something a bit more relaxing, a local taxi service could be a good choice. The only issue with this is that it can be less lucrative because there will be fewer customers than in urban areas.
Choosing the Right Vehicles
The most important routes to success lie in the effectiveness of your drivers and the reliability and safety of your vehicles. Choosing the right cars for your taxi company is incredibly important, both in terms of aesthetic and comfort, but also for insurance purposes.
Cars in the UK are separated into fifty insurance categories and using cars from the less expensive categories will save you money. Having said that, your customers need to feel safe and comfortable for the duration of their journey, which means you need to think hard about whether you are going to compromise on style.
There are a few questions to consider when looking for the right car. Some of these include:
– Is the vehicle reliable?
– Is it accessible for disabled people?
– How many seats does it have and is this conducive to the type of taxi business you want to run?
– Is it more suitable for public or private hire?
– Has it been safety tested?
– What kind of engine does it have (e.g., petrol, hybrid)?
There are some councils that have set rules regarding seat width and engine size, so you need to do your research to ensure you have the right car for your area and business.
Finding the Right Taxi Insurance
There are hundreds of taxi insurance brokers in the UK, all offering very different things. When it comes to taxi insurance, it’s imperative you look into comprehensive cover to have full protection.
In the UK, all drivers must have at least third party only (TPO) insurance by law. However, this does not offer nearly enough protection for taxi company owners. You will be liable to pay for your own damage in the event of an accident. Not only will your taxi be off the road while it is repaired, costing you valuable income, but the costs of repairs could be significant.
Taxi insurance brokers can create comprehensive policies that encompass a wide range of features, including breakdown cover, public liability cover, loss of earnings insurance and replacement vehicle cover.
Without insurance, your business can’t operate effectively, and you could end up struggling before you have even gotten off the ground.
Summary
Taxi companies are part of the fabric of the country, helping people explore, get to work and school, enjoy nights out and more. Working in this industry can be gratifying but be mindful that a lot of research and a great deal of work are needed to be successful.