A Few Quick Tips to Help You Get a Taxi Business off the Ground

If you’re looking for an additional line of income that guarantees daily profits – you are in the right spot.

It’s no secret that the taxi industry has been making billions every year, especially now that Uber and Lyft have arrived at the scene. Though it is not easy money, by any chance, some people started out with only one car and now own a fleet of taxis.

Today, we’re going to draft a business plan for a taxi company.

Know Your Target Market

As with any other business, you need to study the potential market and know what it prefers. Is it looking for better prices, more luxury or convenience? While you are at it, also consider if the market favors traditional cabbies or they’ve moved on to rideshare services.

With this valuable insights, you can decide if the taxi business is still a good fit for you or not.

Familiarize with Regulations

Whether you choose to invest in a medallion or Uber, there is a set of rules and regulations to consider. Traditional taxis, for example, have to be painted yellow, fitted with a camera and a card reader. Uber, on the other hand, have a ten year age limit on cars. Plus, you have to go through a rigorous inspection to get clearance.

Buy that Car

Now, this is where the numbers start to add up. You need to buy a car that combines looks, performance, and luxury to make it in this highly competitive industry. And the cost of a brand new vehicle is anywhere between $10,000 to $20,000.

Alternatively, you can decide to roll up the sleeves and go hunting for a well-maintained used car. But keep in mind that a newer car is more forgiving compared to a used car, as it needs less in maintenance fees.

Get all the Legal Certifications

Typically, acquiring a license for taxi business is pretty straightforward. All you have to do is meet all the requirements such as paint jobs and fit necessary components – and you’ll be good to go. The cost of this certifications may vary from state to state, but a taxi license costs anywhere between $20 and $75.

Don’t Forget Insurance

Every car needs a proper insurance cover. And most insurance companies charge cabbies double that of regular autos. Most cities and towns, however, let taxi and rideshare services make the rules on this one.

Expect to pay 20% of the annual insurance fee upfront. The rest can be paid in weekly installments of anywhere between $60 and $100 depending on the preferred plan. The insurance cost might go even higher if you decide to cover the driver. But it is in your best interest to purchase a plan that goes beyond the bare minimum.

Here’s The Four-Part Recipe to Becoming an Uber Partner

It’s no covert that Uber and Lyft have shaken up the entire taxi industry, as their business model exploits a regulatory loophole. These two multi-billion businesses say they are rideshare services, not taxis. And that exempts them from taxi regulations. Pretty sleek, right?

The good news is, they are continually looking for partners. In fact, it’s now easier, more than ever, to pick up fairs in your city minus all the stress that comes with marketing. Take Uber partnership for example. All need to do is complete this 4 step verification process to turn your ride into a cabbie.

Meeting Uber’s Requirements

For you to become part of the Uber revolution, there are several requirements you need to meet. The first one being car standards. The vehicle should be ten years or newer, pass Uber inspection, and have all the necessary government registrations.

The driver should be over 21 years and have least three years worth of driving experience.

Seek Approval

Signing up is the easy part, just fill out a form on their site. Then attach photos of your car to accompany this personal info. However, Uber reserves the right to schedule an inspection or reject the application.

Meet Service Requirements

This ridesharing company requires you to choose a service plan depending on the type of vehicle and your preferences. Options range from UberLux for high-end cars to UberX as the basic service.

Start Driving

After meeting all the requirements, it is time to create a schedule and start turning As to Bs. Though this might not be a good full-time job, the extra cash will do you good.

Taxis vs. Uber: Who Wins?

Traditionally, investing in a taxi medallion was the most preferred investment for many Americans. Some even put in all they had thinking nothing would ever shake up this multi-billion industry.

But as it turns out, these investors were wrong. Uber, a ridesharing service, is on the verge of bringing down the cabbie business. Their solution can turn any car to a taxi and provide quick, metered and affordable transport for clients.

Traditional taxis, on the other hand, are heavily regulated. The law requires them to be painted yellow, have cameras on the rear-view mirror, display a fare structure, and have a card reader. Uber drivers need a well-maintained car, GPS, and an app – that’s it.

When it comes to pricing, Uber win hands down. They have an 80:20 revenue sharing model where the rider takes 80% and Uber remains with 20%. And that is pretty fair. But the real reason the start-up is so popular is the fact that they charge slightly less than taxis.

Overall, taxis seem to be losing this battle. Uber is only five years old, and they have an estimated net worth of $40 billion. However, some states and countries have stopped the ridesharing service from operating in their cities. But that can’t last for long.