Starting a Taxi Business

Starting a Taxi Business!

The ins and outs of how to do it, what you’ll need to know,

to get, to arrange.

So you’re starting a taxi business. Congratulations! It’s a tough but rewarding business if you go about it with your eyes open, your attitudes right! A taxi cab is a small mobile room with features including a full time attendant, you! It is part of the “hospitality industry” which includes hotels and cruise ships, tour businesses and golf resorts, convention and business administrations, and of course, transportation. Your service is one of the first impressions a visitor has when he lands on your town, certainly one of the more important “entry level” images he/she will take home, about which the friends and future clients will hear. Your performance will contribute to “make or break” if your area is a resort or conference center. Your performance will absolutely determine whether the locals will dial your number or your competitor’s next time!

You make the business work. Your vehicle should be clean, smoke free, mended if injured, a pleasant experience for your clients. (They are not just “fares” or “rides”, they are clients!) Buy the best, most comfortable, attractive car or van you can afford. Straining a little now will mean fewer interruptions for transmissions, engine work, dead batteries – the annoyances that prevent a prompt pick-up and delivery for your customers. There is nothing worse than heading for a major fare, a long ride which will make your week perhaps, and having to miss it because of car failure. As the competitor passes to collect your big fare, you’ll be fuming at the side of the road waiting for the tow truck. Bad plan.

The complaints we hear from operators everywhere are generally in four categories; 1) Insurance is too high cost. 2) Gasoline is too expensive. 3) Can’t get good honest drivers. 4) Regulations and license fees are out of control. Welcome to the hospitality industry! Here are some considerations;

A dependable vehicle, clean, mechanically sound, visually attractive. (Large sedan, van, limo.) Try to avoid small cars with cramped leg room in the back. Remember the trunk capacity too. Nothing more frustrating than trying to put 800 pounds of luggage in a 200 pound boot! Read “About Vehicles” on our website, www.taxicabelectronics.com .

A proper insurance policy. The laws vary greatly from location to location. Ask your insurance agent or another cabby what they use. If there is a regulator in your area, city government, taxi over-sight committee, joint-powers authority perhaps, they will likely have information on insurance carriers and providers. Insurance is one of your greatest expenses. Don’t try to operate without a proper commercial grade policy in place. Your state or provincial motor-vehicle department may also have good information for you on insurance requirements and sources.

A taxi-meter. The federal government regulates equipment features and capabilities for any measurement devices we own - scales, gallons at the pump, temperatures of industrial processes, and of course miles charged to clients in our industry. (Go to www.taxicabelectronics.com and click on N.I.S.T. Handbook 44 in the second last column for more info. Section 5.54 is our bible.) Bottom line is this: If you are charging clients by the mile, you’ll need a proper taxi meter traceable to nationally recognized standards and regulations. We handle the two top brands, Centrodyne and Pulsar. Some meters print receipts or check credit card verifications. Go to that same website and see column four for info.

A toplight sign. Universally recognized as a “CAB” marker, a toplight will display the fact that your car is for hire and properly outfitted. (Go to www.taxicabelectronics.com/toplightswesell.htm for a large selection of quality lights, magnetic or permanent mount. Remember wind can destroy a magnetic base toplight; read “The Wind Speech” on that page.)

Inspections/Licenses/Medallions: In most areas, you cannot simply outfit a car and start taking fares. There is often a regulating body at the city of county level, or perhaps the local police department or sheriff’s department. These are the folks who must inspect the vehicle, licensing of the car and owner, check for a local business license, insurance certificates, and the general condition of the service to be provided. There may also be state-wide regulations regarding non-competition challenges, such as found in New Mexico. You are best advised to call the local government, look in the yellow pages for county or state offices and check on codes, licenses and related regulations. Do your homework in your locale. The time will make you legal, and even advertise that you are providing this service. You may find the officials will recommend you in future if you start out properly. There is also a system in many larger cities called the “medallion system”. There is a limit on the number of cabs authorized in that area, and each is assigned a number and a medallion. This is the authorization to operate, and becomes a valuable asset to your business when you decide to sell out. The car may have been wrecked, the drivers may have quit, the insurance may have been canceled, BUT your medallion can be sold to a new operator for hundreds, perhaps thousands or tens of thousands of dollars! In some major cities it is not unusual to pay over 80- or 90-thousand dollars just for the medallion! The advantage of this system is the limitation on the number of competitors, and the quality of their services.

Calibration and Seals. National regulations and most state (provincial) and county (parish) governments require the meter installation be checked by a licensed “weights and measures” officer before operation. Your responsibility is to install (or have installed) your meter and toplight, and then have it certified by Weights and Measures before you take a fare. They will likely install a lead-wire seal on the meter to prevent changes from being made after the inspection.

Extra drivers. You will either set time limits for the services you offer, (perhaps 7:00 A.M. to 8:30 P.M. Monday through Saturday) OR you will need to have a “night driver” who can answer calls when you sleep. (Regardless of what you may have heard, taxi driver DO need to sleep on occasion.) The phone will ring at 4:40 A.M.. A dependable, honest, courteous operator will be infinite in value to your business.

Once you are legal, marketing is of utmost importance. See our website or our handout on “Marketing in the Taxi Industry.” It has made money for a lot of people. It’s free, too! On the website www.TaxiCabElectronics.com click on “Making Money!” in the last column. Keep a trip log, a maintenance log and good records about your car, your drivers and your entire business. There are several free form on our website, see “Free Stuff” in the last column.

Later on, (or maybe immediately if required by local ordinances,) you may want to consider such items as protection screens between the driver and the passengers, taxi-cam camera systems, back-up alarms, receipt-printing taxi meters and credit card verification systems. We can help with all of these. Call 760-345-4347 or go to www.TaxiCabElectronics.com on the web.