How to Start a Taxi Cab Service

A taxi cab service can be started easily since it only requires one car and driver, but ensuring you are operating legally can be a somewhat complex process.

When considering starting a business, the idea of a taxi cab service appeals to many people because of the flexibility in hours, the average pay rate, and the fact that they already know how to drive. However, starting a taxicab service requires a few more steps than most other types of service businesses, and often costs more depending on what sort of equipment you must buy and what your local registration and licensing requirements are for transportation businesses.

Instructions

1. Develop a basic business plan that outlines how many vehicles your taxi service will start with, who will drive the cab(s), and what your hours of operation will be. Buy a detailed street map and mark out the service area you wish to cover and the primary types of customers you expect to serve; this will determine your profits. For example, you may be close to a major airport and expect to receive a lot of business from travelers going to and from the airport. Or your service area may encompass a busy downtown area with a lot of bars and nightclubs, so you may wish to modify your hours to be available for late night calls.

2. Apply for a drivers license that will allow you to operate a taxi cab. Each state has its own laws and may call this by various names, but a Department of Motor Vehicles representative for your state can tell you what kind of license, application or forms you will need.

3. Contact your local city and county government to determine what business licenses and permits you need to operate a taxi cab in your desired location, as well as what laws govern taxi cab services. For example, many small towns do not regulate taxi services and only require a regular business license. Alternatively, some locations may put a limit on the number of taxi cab services that can operate in the area by issuing what are called medallions, and may have already reached the maximum amount. You may need to purchase a medallion from an existing company or one that is going out of business in order to operate your cab service.

4. Purchase a vehicle appropriate to local regulations as well as your anticipated clients' needs. For example, a van or larger vehicle may be more appropriate if you expect a lot of customers who want to get to the airport or train or bus station and will have luggage. If your clients will typically be professionals getting to and from lunch, meetings, etc. in stop-and-go traffic, a smaller car that gets good gas mileage may constitute the better choice.

5. Outfit the vehicle with the appropriate equipment, such as a meter and toplight. Your local taxicab ordinances may also require vehicles to have things like safety screens between passengers and drivers or camera systems, which you can install at the same time as your meter and toplight.

6. Register your vehicle as a taxi cab with the Department of Motor Vehicles and the agency that regulates cab services in your area. Your vehicle will likely need to pass an inspection for safety and a "weights and measures" inspection to ensure that your meter is calibrated properly.

7. Begin advertising and operating your business. If you haven't done so already, consider getting a special phone number that makes it easy for your customers to remember and have this number painted on your vehicle. While you don't necessarily need a garage separate from your home to store your taxicab--especially while your business is still small--you should have a secure place to park your vehicle where it will be out of the weather, or at minimum a cover and alarm system.

References

• Clay Collins' Business Ideas: How to Start a Taxi Service