Starting a new business as Taxi Company? Don’t forget your insurance!

Starting a new taxi business presents a great opportunity for many people. Some like the prospect of being their own manager, whilst others really appreciate the flexible working hours. The taxi industry has seen an increasing demand in recent years as more and more consumers value the convenience it offers, new disruptive tech companies like Uber have played a big role in making this change happen.

If you are considering becoming a full-time or part-time taxi driver there are a number of things you need to consider. One of the most important of these is getting affordable taxi insurance cover. This type of insurance is far more expensive than a personal car policy, so we recommend using a comparison site to find the most competitively priced taxi insurance policy.

Before buying or leasing a fleet of taxis, you’ll also need to account for all the other equipment you’re likely going to require before your doors are open for business.

The Taxis – (Don’t forget your insurance)

Starting with the obvious, anyone entering the taxi industry will need access to a vehicle. Fortunately, in this ride-sharing period, most cars can be used as taxis. The choice of vehicle you will decide upon will be dictated by the type of service your company wishes to offer. For example, if you’re catering for customers travelling to and from an airport, you’re going to need a larger vehicle to accommodate multiple passengers and the luggage.

If you’re primarily focused on your local area, most saloons or multipurpose vehicles such as hatchbacks are relatively affordable and suitable for the job. Once you know which type of car make and model you want for your taxi firm, you will have to decide between buying the vehicle outright or leasing it. Here are a few advantages and disadvantages for each option for you to consider:

Buying the vehicle outright

You’ll own the asset
There are great offers available in the used car market
You can even get a loan or finance it through the car company
New cars depreciate in value far more quickly
Buying outright may not be an option if you don’t have the capital

Leasing the vehicle

You can order a fleet of vehicles with less capital
No worries about the vehicles depreciating in value over time
Vehicles can’t be named as assets to help your firm secure finance
There may be an annual mileage limit, with high penalties for exceeding this

Smart phone with GPS capabilities

Previously, to run a taxi firm efficiently, you would need to outfit all vehicles with a separate satellite navigation system and provide drivers with a mobile phone. However, this is no longer the case, especially with how technology has evolved.

Almost all modern smartphones include a built in GPS and access to map applications to make it easier for taxi drivers to get from point A to point B in the shortest amount of time. Unless you’re a cab driver in London, you no longer need to memorise every route, destination or landmark. Newer vehicles even allow you to connect your smartphone to the car via Bluetooth for an enhanced experience, making life easier.

Bluetooth headset

Key to any successful taxi firm is clear and effective communication. You’ll want to provide your drivers with instructions on where to pick up and drop off passengers. If you’re new to the industry, providing drivers with a Bluetooth headset that pairs with their smartphone makes a lot of sense. Anyone who wishes to take calls will need a handsfree solution as it is now a legal requirement. This will help you keep your hands on the wheel and your eyes on the road, as safety is a top priority.

Payment options

Taxi drivers will need to be paid for the service they provide. Accepting cash payments is fine, however many customers prefer paying with a credit or debit card. Some even use their smartphone to make contactless payments. This is where having a portable payment system is essential. If you do not offer this facility, you could be losing out on a lot of business. Did you know that in Central London, all licensed taxis must be fitted with a TfL (Transport for London) approved card payment device? When searching for the right card reader, look for a provider that makes the set up and management process as easy as possible.

Here are some other things that you will need to consider:

Taximeter – To calculate fare prices
Taxi license from your local authority
Fleet insurance policy if you have multiple vehicles to insure

Hopefully, this guide has given you a helpful introduction to some of the different purchases you will need to make before starting a new taxi business. We wish you every success in your new venture.