If you are thinking of starting up a taxi business, the most important and initial steps to take are to research the UK taxi industry as a whole, find a unique selling point, choose a brand name and obtain the relevant equipment, employees and licenses.
Nowadays, with emergence of taxi apps like Uber and Get Taxi, starting a taxi company in 2018 is certainly a different ball game than it would have been a decade ago.
Whilst the taxi industry has undergone a seismic shift in recent years thanks to the digital age, there are still benefits to starting a taxi business in 2018 and trying to claim part of the £9bn taxi industry.
This is especially the case since Uber have recently been losing their licences to operate in various areas around the country.
What are you going to offer?
When setting up a company, you must consider what kind of taxi service you are going to offer. Finding a niche can help you stand out in an overcrowded and competitive industry.
You may want a taxi company which operates in a city centre. The location of the city centre provides you with a diverse range of potential customers as well as an interesting driving environment.
To find your niche, you might decide it’s best to be known as a local taxi company. Perhaps you want to cater to the student market only?
Alternatively, your taxi company could potentially specialise as something like a school taxi or airport transfer services.
An interesting concept has been the female only taxi drivers which many customers consider much safer, and which also caters to various religious cultures.
Naming and branding your taxi company
If you choose to be a self-employed taxi driver, you won’t have too much interest in the name or establishing a brand. However, as a company with multiple vehicles and drivers, you will undoubtedly see the benefit for creating a strong name and focusing on branding.
If you are going to operate in a small area, your name could simply be inspired by the location – this will also help it to become visible in online searches and recognisable to the locals.
However, keeping a local name might make it harder to branch out, since a name like Edgware Cabs, may not attract interest from outside the area or allow you to scale effectively.
To operate in the city of London, you must have a Transport for London driver’s license. This license will need renewing after five years. To be eligible, you are required to be over the age of 21.
If you are going to be based outside of London, you will need an operator licence from your local council.
In order to receive a taxi vehicle licence, the vehicle must:
- Meet the Euros 6 standards of zero emissions capable
- Meet the design standards set out in the TfL’s fitness document
- Feature a meter which fits the TfL’s specifications
- Be able accept card and contactless payments and be capable of printing a receipt
The cars you choose
The cars you decide to operate will have a dramatic impact on your clientele, the rates you charge and the costs your incur.
A Toyota Prius is perfect as a taxi car because it is energy efficient and low cost to run. By comparison, a C-Class Mercedes is more expensive to lease and to run but then should attract a high spending customer.
Do not forget that you will need sufficient insurance to operate as a company. Naturally, you will need vehicle insurance to drive on UK roads but also employers’ liability for any staff you have and public liability to any customers you drive.
Ways to save on insurance include asking individual drivers to cover their own insurance premiums. If they pay their own voluntary excess, it is like they have skin in the game and a desire to drive safer.
You can also use telematics in order to track your mileage more accurately and if you are operating multiple vehicles, you can reach out to fleet insurers to see if you can get a bulk discount.
A business plan
You should aim to draw up a business plan to set out your budget and goals. Before you start, it is best to know for sure whether starting the company is a viable and profitable option for you at this moment in time.
Your business plan should detail the market you are entering, display your expected start-up and ongoing costs as well as your projected earnings.
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