The Steps to Starting a Taxi Service Company
The appeal of starting a taxi service company is obvious. You can set your own hours, be your own boss and have the potential to earn a high income that isn't limited by an hourly rate or time clock. After all, the more vehicles you add to your growing empire, the more money you can make. But as an entrepreneur, you shouldn't make the mistake of assuming it's simply a matter of hanging your "open" sign and start transporting people immediately.
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Equipment
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The foundation of a taxi business is, of course, the cars. If you choose to open a franchise, the make and model of car is likely dictated to you. An independent taxi company can choose its own cars but should be mindful of legroom for passengers and trunk room for suitcases. Above all, cars should be reliable --- a taxicab in the shop won't make you rich. The meter, which measures time and determines the amount of your fares, is regulated by both federal and state governments. Retailers that specialize in meters can usually tell you if a certain model is approved, but it's safer to contact the weights and measures office in your state government and ask for guidance.
Licenses
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No matter where you live, expect that you need to secure a business license from the city and county within which you'll be driving; there may be other types of permits required that are particular to your jurisdiction. Call your local government offices for that information. Any cars used in your taxi business must be street-legal in terms of inspection and tags; all drivers must be properly licensed as well. Certain states, such as New Mexico, have noncompete rules in place for particular types of businesses in certain areas. A call to the state office can establish if that's applicable where you live.
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Insurance
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Because of the risk of injury to your passengers, you need to carry a commercial-grade insurance policy --- likely one of your largest business expenses. Without suitable insurance in place, a single lawsuit could put you out of business permanently and affect your personal financial life for years to come. Your state's motor vehicle department would be a good source for instructions on how to find an appropriate taxi cab company insurance carrier.
Employees
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In the beginning, you can likely act as dispatcher and driver but, as the company grows, it will soon exceed your physical capacity to do everything yourself. That's where employees come in --- a fact that introduces a whole new set of issues. Take your time and hire reliable people, then treat them right so they stay. Whether you hire W-2 employees or 1099 independent contractors, make sure you adhere to all employment laws and pay your income and FICA taxes on time.
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References
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