How to Lift a London Taxi Business off the Ground

Ridesharing services have been taking an irregular share of the £9 billion taxi industry over the past few years. They are almost driving traditional cabbies out of business with their low fare prices and shrunken start-up costs.

For this reason, their unfair trade practices have earned them a ban in several countries such as the UK, Bulgaria, China, and Denmark.

The innovation behind this taxi apps is pretty impressive. But if allowing these start-ups to operate in cities puts the entire taxi industry at the risk of collapsing, then slapping them with restrictions seems fair enough.

That said, it is worth noting that there’s no better time to start a cabbie business in London than right now. You get to choose your working hours, make a decent living and enjoy protection from unfair business practices.

So whether you intend to start a taxi business as a side hustle or looking to switch careers, this piece has got you covered.

Get a Taxi License

Once you’ve made up your mind to change careers, the first place to start the journey is licensing. The cost of these certifications varies depending on your location, but it’s usually affordable. However, you need a medical report, a clean criminal record and to pass a language test before taking the famous knowledge exam.

Choose between Leasing and Buying a Car

The car amounts to almost 80% of the total start-up cost needed to lift a cabbie business off the ground. So you need to evaluate your options. The first choice is buying a brand new auto; the second one is settling for a used one.

If neither of these possibilities seem to fit in your budget, consider leasing or taking a car loan. However, these options may prove to be more expensive in the long run.

Additional Costs to Consider

Now that you have the car, there are a few other things you need to look at before picking up fairs in London. Insurance, for example, starts at £1,600 per year. You can pay 20% upfront and finish the rest in equal installments. But the idea is to stay clear from claims – as they affect the overall cost of insurance.

Another thing worth evaluation is advertising. You might want out hand out flyers or sign up to taxi apps like MyTaxi. And that costs money too. There’s also service charges, fuel, and repair costs. This expenses may seem negligible at first, but they do add up pretty quick.

Work Hard

With freedom, comes responsibility. So you need to put in maximum effort into growing the business. That includes working long hours and grinding on weekends and holidays.

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.