Whether you are new to taxi driving or are an experienced driver who wants to take the next step, there are some key points to setting up a private-hire taxi business.
It can seem complicated at first, but the most important thing to remember is that it is a business in a regulated industry and it has to be run properly.
The first step is deciding to operate a private-hire taxi business for which fares can only be booked in advance by phone or by app. Unlike public-hire taxis, they cannot be flagged down in the street or pick up passengers waiting at a train station or airport.
Having first decided which type of taxi business you will operate, it is vital to create a business plan, realistically considering costs and earnings so you know what you need to do to make it a success.
As with any other business, you will need to open a business bank account and keep detailed records of all transactions.
You will also need to ensure that you have the means to invest in capital – mainly your private-hire taxi – whether it is through loans or investment from a business partner. Booking and payment technology could be another expensive outlay depending on the size of the business and how it will be run.
Finding the right vehicle to operate is the next most-important step. As well as choosing something that is practical and economical, you need to check whether there are any conditions or restrictions imposed by the local licensing authority through which the driver and the car must be licensed.
While it is cheaper to buy an older car, vehicles older than five years cannot generally be registered as private-hire taxis and those being used as taxis usually have to be replaced after 10 years.
It is also worth considering congestion charges and clean-air zones which might influence your decision to choose an electric vehicle. Whether you make that decision now or in the future, it is something that your business plan should take into account with the government banning the sale of new petrol and diesel vehicles from 2030.
While a newer electric vehicle might be more expensive now, it will save on the rising price of fuel, road tax and environmental charges.
Once you have your vehicle in place, before you set out on the road, you must have private-hire taxi insurance to cover you and your passengers in the event of a collision or claim. You cannot legally operate your taxi without it and domestic car insurance does not cover you to operate a vehicle for hire and reward.
You an choose fully comprehensive insurance which will cover you and your vehicle in the event of a collision, or the legal minimum third-part, fire and theft, which will reduce premiums but leave you footing the bill for any damage to your taxi.
As with any other business, marketing and promoting the services you will be operating is key to its success.
Social media is a great way to spread the word about your business and it is also worth putting business cards and fliers in venues such as pubs and clubs where people are likely to require a lift after a night out.
All information is correct at time of publication. Information provided within this article may have changed over time. No responsibility for its accuracy or correctness is assumed by John Patons Insurance Services or any of its employees.