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What does it take to start a taxi business?

While a taxi company It can be expensive to start up, in the long run it’s a lucrative business.

Well, you can start as a small business with some vehicles with drivers and then expand little by little, as you start to make a profit.

But before starting, you should consider whether there is a demand for this service in your area and apply for all Mercedarian licenses without neglecting insurance coverage.

Tips for opening a taxi company

To open a taxi company, you must follow the tips that you will read below so that your company can be profitable in the long term.

The competition: It is convenient that you enter the websites of other taxi companies in your local area, to investigate their services and rates, in this way you will know if another service that you can offer is necessary within that area.

If it is a small city without much demand for taxis, it may not be the best way to market the business.

Researching your competition, make a list of additional services you can offer such as departures from the airport, consider reduced rates or have large vehicles to transport groups of passengers.

Vehicles and equipment: To save time it is best to buy vehicles that have been modified to be used as taxis, you can find them on auction websites.

But the important thing is that you choose vehicles that are clean, with a safety guarantee and that offer enough space for customers’ suitcases.

If you modify the vehicles to use them as taxis, you will need signs toplihght yellow color plus decals with your company name and contact information to place on all vehicles.

The ubication: Choose a location with enough space to store all your vehicles and a dispatch office. Locating the office in the downtown area is the best location because you will have better access to the entire city.

The employees: You should choose drivers who have driven taxis before and also already have a commercial license to drive.

Ask them for a copy of their driving records and also ask for references from the companies where they have worked.

Advertise your service: Advertise your taxi service with large online and offline advertisements in your area to bring in the most customers.

You can also advertise in local newspapers including your services and contact information. Create and distribute coupon brochures to attract new customers to your business.

Main services: The main services that you can offer with your taxi include passenger transport, limousine rental, vehicles with drivers, vans, luxury vehicles, hearse rental with drivers. However, most of the revenue of the taxi industry comes from local passenger transport services.

This means that you can transport passengers after a reservation or pick up passengers while driving on the street or at the taxi stands.

But as a business, you must have a central dispatch office, have a fleet of vehicles, have fuel tanks and pumps, and you can also operate a maintenance and repair shop.

Franchises: The taxi industry is very competitive, since the innovation, commitment and popularity of the brand are very important incentives that can guarantee success, which is why many entrepreneurs, instead of thinking about opening this type of business as an adventure, choose to buy a franchise because it is supposed to easily bring you success.

Well, without a doubt starting the business from scratch will give you control over the growth of your business but it will take you more time.

Anyway, you should also think that when starting a business, you will always find threats from the market, since none can be easily started.

You will always need to research and innovate in order to build your brand and being a taxi business, you will face an industry that requires will and patience on your part.

FirstYou must think and calculate the price of fuel, taxes and expenses such as parking tickets, the cost of tolls, licenses and other charges required by the government.

But you can solve these questions by incorporating these expenses into the price you will charge your customers.

Another challenge that you should take into account when starting your business is the cost of maintaining the cars so that they are in good working condition, since cars require regular maintenance, which comes at a cost.

In this sense, think that cars can break down without prior notice, which would mean a reduction in your income for the day.

The drivers you choose must have been selected with great care and research, since they can disappear with your vehicle, so it is important that each of your drivers has a guarantor who is responsible for any damage in addition to that you can install a tracking device in all taxis.

Requirements to open a taxi company

You must meet the following requirements to open your taxi company:

Licenses and insurance: You must apply for a commercial driver’s license at your local department of motor vehicles if you are going to drive.

You should register the vehicles and ask about the inspections that are required.

Business license: Apply for a business license at the municipal clerk’s office.

Sure: Meet with an insurance agent for advice on the type of insurance you should buy and the amount of insurance you need. If you do not know the rates of the insurance companies, you can ask other taxi drivers in your area and they will also advise you on the insurance rates.

Business structure: Consider several factors before choosing the structure of the business, since it will depend on the personal responsibility, the payment of taxes and the protection of your company against bankruptcy.

Like any other company, you can choose to structure your business as a sole proprietorship, a partnership, a corporation or a limited liability company.

As a small taxi business you can choose to start it as a sole proprietor because it is an easy legal entity to set up and it is cheap.

It also gives you complete control of the decisions of the business operation and the income generated. In addition, it is also easy to dissolve if the business did not work as you had thought.

But the best thing is that you consult with a lawyer in commercial matters.