How to Start a Cab Company

Taxi cabs are well-known for being yellow, but they can be any color

In larger cities, many people rely on public transportation or taxi cabs to get around. In other areas, cabs may not be used as much, but there will be less competition. Regardless of the size of your metro area, starting a cab company and operating your own taxi cab can be a financially rewarding business opportunity. A successful cab business also offers plenty of room for growth.

Things You'll Need

• Vehicle
• License
• Taxi accessories

Instructions

1. Purchase a vehicle suitable for using as a taxi cab. A fuel-efficient vehicle will help improve your bottom line, but the vehicle must have a comfortable rear seat and enough cargo space to carry passenger luggage. Purchasing new or used is a personal decision. Buying a used vehicle will save you money on the initial purchase cost, but may cost you more in maintenance.

2. Visit your local licensing agency to apply for any licenses needed to operate a cab in your area. Regulations and requirements will vary from state-to-state. At minimum, you will need automobile insurance for business purposes. Some states will require a special driver's license to operate a cab.

3. Modify your vehicle for taxi cab use. Taxi cabs are traditionally yellow, but painting the vehicle is optional. Make sure it is recognizable as a taxi cab. You need decals on the sides with the name of your taxi business and a telephone number. The most simple way to set up a cab hot-line is to use a cell phone. Larger cab companies have dispatchers who answer the phone and relay information to the cabs; this is unnecessary when first starting out. Other major modifications needed are a cab meter and a top light (roof of vehicle). Cab meters will help you record mileage for trips and calculate fares. Cab meters start out at about $200. A partition to divide the front and rear seat is recommended for safety. Wireless credit card terminals are also available, adding the ability to accept credit or debit cards for fare payment.

4. Advertise your business and make your name known among those needing frequent cab rides. You may have to operate your cab for long hours while you get your business of the ground. As the business grows, you can hire drivers and purchase more cabs for your business.

Tips & Warnings

• If you have the extra capital to spend, consider purchasing a vehicle specifically modified for taxi cab use. This would save you time from having to modify a vehicle. Contact other cab companies to determine what you should charge per mile. Cab prices vary between different parts of the country. Price lower to gain an edge over the competition.

References

• Start Up Biz
• A Touch of Business
• Entrepreneur

Resources

• Taxi Equipment