How to Start a Taxi Company

Taxi from San Francisco, California

There is a lot of money that can be made by owning a taxi company, but it takes a lot of hard work and a lot of detail work. Here are some tips to help you start a taxi company within the confines of the laws.

Instructions

1. Get a license to drive a taxi. This will consist of getting your driving history checked and taking an exam. You will be assessed by an insurance company to see if you are insurable (if you have a poor driving record, do not start this business). Go to a bank with a business plan that presents expected income from the number of cars that you wish to purchase. Your credit rating will play a large part in your success.

2. Get the cars insured as regular vehicles, not as taxicabs. Get help from a friend or two to take your taxis to a company that installs accepted meters for charging prices. This will typically be in a major city like Chicago or New York. Understand that taxis are governed with respect to what they can charge, so everybody gets the same meter based on their location. At that time, you can have the taxi wired for the sign on the top of the car.

3. Go to the city and register your cabs with them. You will have to pay a license fee. Get the cars insured as taxis. Get a radio set up with phone number. Put an ad in the newspaper for drivers. They will have to go through the same procedure as you did to get a license and be accepted on your insurance. Determine your hours of operation. Keep in mind that 24-hour operations do the best. Considering that, hire about 4 drivers for each car to cover call-ins for health reasons and just plain days off.

4. Offer typical compensation, which is 50 percent per fare, with the driver paying for gas and you maintaining the car. Typically companies work in 12-hour shifts. Place an ad in the newspaper and buy business cards for each driver. Buy an ad in the Yellow Pages. It may take some time to get published, so in the meantime have your drivers sit in front of hotels and airports. They will get fares, and by handing out business cards the business will develop.

5. Maintain specific management tasks once the business is up and running. Make sure each driver maintains a log of each fare and amount paid, both for your records and legal reasons. Make sure your insurance stays up to date. Make sure your taxis have oil changes every 3,000 miles and are checked for city compliance.

Tips & Warnings

• Don't let an unlicensed driver drive one of your vehicles.

• Don't rely on the city or state to keep you appraised of changes.