Today, most of the people owning a smartphone book a cab from the comfort of their home. All thanks to the emergence of taxi businesses like Ola and Uber. Such rising demand makes investment a profitable option for many entrepreneurs. If you wish to benefit from this investment, then this blog is for you! Here you will get a comprehensive guide on how to start a taxi/cab business.
Let’s start this blog without wasting any time!
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With time taxi booking business has grown significantly, from two Businesses providing this service to a dozen coming into this market and revolutionizing it. The overall revenue of this business has grown.
A proper business plan is very crucial before starting a taxi business. Let’s know the key pointers an entrepreneur must consider when starting a cab business.
The first and foremost step before starting a cab business is to check the potential of the cab business in your target region. Analyse competitors and see the what percent of local people use taxi services.
Create a plan for your cab business by researching the target market to identify the cab demand. Determine business goals, financial projections, and other marketing strategies.
The next step is to register your business., you can either register as a sole proprietorship, in partnership, or as a private limited company. Apply for license and permits required to operate a business. This blog has covered the list of documents required to start a taxi business.
More than one or two cars make a fleet. Purchase cars that are specified by the local transport authorities. Either you can purchase new cars or buy used ones. But used cars must be below 5 years old and in optimum condition. Cover your cars with taxi insurance.
After you have your cars, the next step is to hire experienced taxi drivers with commercial driving license. Either hire taxi drivers for full-time or part-time as per your business plan. Cross-check drivers’ backgrounds, verify their driving records and have a police verification for safety purposes.
Plan your routes, estimated time, and additional services you want to offer. Based on these factors, keep a competitive pricing structure while keeping profitability on top. Ensure to provide multiple payment options to your customers.
Marketing is the key to success. With digitization, various strategies can be used to promote the business. Both online and offline types of marketing can take your cab business to the next level.
Delivering quality customer service can help you build a loyal customer base. To maintain professionalism, you can train your drivers to be polite, punctual, and professional towards your customers. Focus on collecting feedback from customers and analyze regularly for enhancing business efficiency.
Also Read: Taxi Booking App Solutions For Your Business- A Detailed Guide
Digitization of your taxi business is extremely important because the majority of people today rely on smartphones for every basic need, including taxi booking. It is necessary to create a taxi app as well to make your taxi business online. So, let’s learn how to start an online taxi business.
Analyze the competitors to know their offerings. For this, download top 10 taxi apps to know their unique features and weak areas to make informed decisions.
Choosing the most appropriate business model is extremely important. There are three types of taxi business models. Let’s know them.
| Model | Information |
| Aggregator Model | Partner with taxi drivers having their own cars. |
| Ownership Model | Self-drive the cars you own. |
| Hybrid Model | Combo of aggregator+ownership model offering flexibility and coverage. |
This step includes registering your cab business and obtaining a legal license for running the business.
| Steps | Information |
| Cab Business Registration | Register your taxi venture as a sole proprietor, as a partnership with limited liability, or as a private limited company. |
| Obtaining License and Permits | Licensing taxi business and obtaining permits to run your taxis on roads, including pollution certificates, and tax registration for goods and services. |
| Insurance | Insuring cars and obtaining insurance certificates from valid insurance company. |
Creating an app is essential because the majority of people use smartphones for every need from shopping to entertainment, including taxi booking. Hire a taxi app development company to build the finest taxi app for your cab business. Include features such as multiple payment methods, real-time tracking, emergency services/SOS button, driver profile, etc.
Hire experienced taxi drivers and have police verification for background checks, and working history. Train the drivers for professionalism and politeness towards your customers to create a loyal customer base.
Promote your cab business using different promotional strategies including, pamphlets, digital marketing, social media marketing, newspaper advertisements, etc, which will be beneficial to your business to reach a wider audience.
Take feedback from your customers to improve your taxi business and deliver quality customer service.
Three types of taxi businesses operate in this world. Let’s understand them in detail.
A typical cab business includes owning and driving single taxis or small organizations owning 3~7 cars and running the business. This type of business is losing its breath due to poor accessibility.
Cabs operating under Taxi giants like Uber and Ola are known as radio taxis. This business type is widely popular among people due to its easy accessibility. They can be booked and tracked through their online taxi application. Unlike traditional taxi ventures, cab drivers own these radio taxis. However, the company under which they are operating takes a percentage of the fare.
Starting this type of taxi business is quite easy. This business can be started with a small fleet and can be a profitable option. One can create a fleet of 3~15 cars depending on budget, and run the business in tier 1,2, and 3 cities by accepting bookings through phone calls, WhatsApp, or messages. To start this business, you must comply with the rules and regulations.
Starting any business requires documents. Here is the list of documents that are essential for starting a taxi business.
As an individual, one must give the following documents to the road transport office.
As an individual, you must exceed the following requirements before applying for a driving license.
Several permits are available depending upon the vehicle class that one needs to start a taxi business and run these vehicles on roads legally. Let’s get into the brief overview.
Note that not all vehicles can be used as taxi in this world. Check with the Regional Transport Office/State Transport Office which vehicles can be used as taxis.
One must file an application that includes a vehicle’s seating capacity, class, and the operating region where the taxi will run on roads as specified by the transport authorities.
A fitness certificate for taxis is necessary to run a taxi business. As per the Motor Vehicle Act (MVA), this certificate decides whether the vehicle is fit to run on roads and can be operated as a taxi.
A fitness certificate is easily available for new vehicles, however, for used/old vehicles, their fitness is tested and only vehicles passing the test are given a fitness certificate.
If you have plans to include used vehicles in your fleet, ensure they meet the fitness standards and requirements and are well-maintained so that they get fitness certificates easily.
You must obtain an whole country Tourist Permit so that your taxis can transport passengers on roads from one place to another. One needs to fill out the form and send it to the RTO office. Note that these taxis cannot be used for local transportation.
The RTO office grants commercial driving licenses by fulfilling the conditions mentioned in the above section.
With a regular need of transport in daily life Taxi business can do wonders and if you own it then you might understand what are the margins. The advancement in technology has changed the way we commute in our daily lives from short routes to long routes while also changing the way of book taxis. Taxis are going to stay and the requirement will increase with the population.
As the taxi venture is highly lucrative, it makes sense to invest in a taxi business. Here is a list that will help you understand why it is profitable to invest in a taxi business:
| Reasons to Invest | Information |
| Increasing Demand | There is increasing demand for ride-sharing and ride-hailing services. The taxi industry is growing continuously. (Refer to the market section above) |
| Public Transport Issues | Public transport services are inconsistent due to poor hygiene, congestion, poor vehicle maintenance, and vehicle breakdowns. |
| High Smartphone Use | Ola and Uber apps have led to people booking taxis from their homes, profitable for both passengers and business owners. |
| Wide Customer base | Starting a cab business will allow you to serve a wide variety of customers such as tourists, frequent travelers, and daily commuters. |
| Flexible Scheduling | Operating a taxi business will enable you to work when you are comfortable like on weekends when tourists start visiting or on weekdays when daily commuters work. |
| High Profit | By catering to a wide variety of customers, it is a wise decision to invest in this lucrative business. |
Here are some emerging and unique features of the taxi booking app development that are integral in offering an enhanced user experience to users as well as drivers. Let’s take a look-
| Features | Description |
| User Onboarding | It is important to provide a simple user interface where users can register and log in to the app without any hassle. |
| Booking Interface | Users are able to book a taxi from the booking interface without any hassle. |
| GPS Tracking | An API is integrated into the app of taxi booking which shows real-time GPS tracking in the taxi-hailing app. |
| Cab Type | Users can choose which type of cab they want to ride in. Some options include Bikes, Autos, Mini Taxis, Sedans, and SUVs. |
| Pick-Up and Drop Location | Users can choose the pickup and drop location for ease of convenience. |
| Estimated Ride Fare | An estimated ride fare is calculated according to the distance and traffic of the route you have selected. |
| Live Tracking | The users can also track the live location of the driver before and during the ride. |
| Payment Gateways | Safe and secure payment gateways are integrated into the cab online app so users can make payments without any hassle. |
| In-app Messages | Users can connect with the driver through the in-app messaging and call feature and coordinate with the driver accordingly. |
| Ratings & Reviews | The users can rate their rides and drivers according to their experience. |
| Features | Description |
| Driver Onboarding | A simple user interface where the driver can register and log into the application. |
| Driver Profile | All the personal details about the driver are listed in the driver profile including identity verification. |
| Ride Alert | The driver gets a notification whenever someone books their ride through the app. |
| GPS | The driver has real-time location services in the app so they can reach the users without any hassle. |
| Dashboard | The dashboard functions like the app’s home screen where the driver can monitor and manage all the rides. |
| Push Notifications | Drivers receive push notifications whenever a user books or cancels a ride, as well as other application functions. |
| Ride Fare | A ride fare is shown to drivers according to the distance and traffic of the ride. They can either choose or decline the ride. |
| Booking History | This feature enables the operator to monitor the rides completed by the driver to date. |
The average cost of starting a taxi business depends on the scalability of the business. Starting a taxi business can cost you varying upon the features you chose in the application and the type.
There are several factors affecting the cost of starting a taxi business. Here are the major factors:
| Factors Affecting Business’s Cost | Description |
| Taxi App Development | The overall taxi app development cost depends on the types of features and complexity involved in it. |
| Integrating with Offline Vendors | Communicating with offline vendors for using their vehicles to use as taxis under your taxi venture. You will need to register them as taxis which will add a cost to your business. |
| Car Purchasing | To have a full-fledged fleet that fulfills that caters to a large customer base you have to purchase a number of cars which increases business expenses. |
| Hiring experienced Drivers | You have to pay more for hiring skilled and experienced drivers. They will also help in running the business efficiently. |
| Registration & License Fees | Registering your business and obtaining a license permit comes at a cost but you can legally run your business throughout the country. |
Unique and trending ideas boost the taxi business and make it stand out in the industry. Trending ideas make your business unique in the competitive market. Here are some trending taxi app concepts that you can use to make informed decisions:
They allow for eco-friendly commutes by sharing rides between different riders and reducing fares while also helping reduce carbon footprints.
Today, women’s safety has become a priority when it comes to taxi rides. This is a women-only taxi idea that helps female riders by providing them with female drivers to help solve safety issues, especially at night. It also includes child-friendly options to provide specific services to mothers with children.
This taxi business idea provides luxury commute services to people who prefer riding in expensive cars including sedans and SUVs with attributes such as free WiFi connectivity, mineral water bottles, and a personal driver throughout the ride.
These are good for working people who commute daily at the same times in the morning and evening. This idea allows riders to pay a subscription fee on a monthly basis for reliable and cheap transport as compared to daily taxi booking.
Taxi app designed especially for disabled and elderly people. This ensures the availability of rental cars with facilities like wheelchairs and drivers trained to handle elderly and disabled persons with care.
The taxi industry is rapidly growing, so investing in taxi app growth is a wise move. Traveling by taxi has become a lot more affordable since the introduction of online taxi apps, compared to a time when taxi apps were unavailable. These are popular because of the low rates, instant bookings, and large cab variety.
If you want to develop a taxi online booking app leading taxi app development services provider can help you streamline the process. Our highly skilled taxi app developer team utilizes their in-depth knowledge and expertise to develop cutting-edge and feature-rich Taxi online apps that have the potential to attract millions.
Yes, this is booming right now and it is very profitable to invest in the taxi industry right now.
Yes, we offer completely customized taxi booking app development solutions that are tailored to our client’s requirements.
Initially, starting a taxi business in Delhi involves a significant amount of money as you’ll be purchasing cars ( one, two, or more), obtaining a permit, hiring drivers, and incurring other expenses. The overall cost depends on the business’s size.
Yes, the Taxi App is highly profitable for your business as a large number of people book taxis through taxi mobile apps and generate a high ROI.
No different license is required for Taxis, but a valid driving license is required.
The answer is Yes. You can use your private car in Uber, however, you’ll need to register your car as a taxi and get a commercial license for it.
