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How To Start A Taxi Business With One Car: Your Comprehensive Guide

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Trends in the taxi and mobility industry

For the African continent, the ride-hailing market demonstrates promising growth as well. While the absolute numbers are less impressive than for the Asia Pacific, the experts report enriching business opportunities in the region due to tourism growth and the development of local business hubs. For instance, the rise of motorcycle taxis in Nigeria has disrupted traditional taxi services and led to increased competition in the ride-hailing market. Other countries, from Morocco to Kenya, see the gradual rise of strong local ride-hailing players as well.

When starting a taxi business, understanding the taxi and mobility industry trends is crucial for picking the best niche for your business. So here are the most prominent developments in the industry for the coming couple of years.

Ride-hailing apps are turning into super apps

Handy, automated order management, GPS-tracking, and multiple payment methods are the bare minimum for a taxi service. That’s how ride-hailing apps became the state of the art. However, we see a steady increase in the popularity of applications offering multiple service types and allowing customers to manage more than just mobility. Besides, employing innovative technologies helps newly established taxi companies gain funding and governmental support.

Emission-neutral vehicle use is growing

The concern with global ecology and attractive subsidies for electric vehicles have made EVs grow steadily in popularity as taxi vehicles. We see these trends expanding: while previously EVs were mostly used for premium taxi service types, now they are close to dominating regular taxi services as well. Some companies experiment with self-driving vehicles, others with subscription-based fully-electric fleets—depending on the budget, many things are possible.

Alternative modes of transportation to avoid further congestion are becoming more popular

Bikes, motorbikes, scooters, you name it. Especially in congested cities, mobility companies are diversifying the services offered. In locations with more tourism, alternative mobility is gaining traction, too. If you’re wondering how to start a bike taxi business, this might be just the trend to hop on.

Mobility market regulation gains complexity

In the wake of Uber controversies in terms of governmental lobbying, workers’ rights, and societal impact, many governments have taken legislative steps to regulate technology-driven mobility businesses. In rapidly developing regions such as Latin America or the Middle East, the regulations are expected to grow more rigid in the coming years, making now the perfect time to launch a taxi company while there’s still some room in the market. On the other hand, many local governments are striving to daunt multinational players such as Uber or Didi, creating space for local taxi enterprises to take their share of the market.

Emphasis on safety stays essential

Various safety concerns made safety features such as the SOS button, Follow my ride, and in-app chats essential. Customers are also more worried about maintaining their privacy and are less willing to share their phone numbers with drivers. 

How to start a taxi business with one car: step-by-step guide

With all these global mobility market developments, starting a taxi company with one car is very feasible. As long as your taxi cab service fits the client’s needs, the size of your fleet doesn’t matter.

With this guide, you’ll learn the essential steps of launching a taxi company from scratch.

How much money do you need to start a taxi business?

Every successful taxi cab business starts with a vehicle. Either you already own a car that fits starting a taxi business or are going to buy one. A single, used vehicle takes around $10,000 for the initial investment (depending on the market you’re operating in). A brand-new car is more expensive but does give you more flexibility in providing different types of services. You can always scale the size of your fleet as your company grows.

If your taxi cab service will accept cash payments, you’ll need to install a taxi meter. The approximate costs are under $900, depending on the market. If you only work with cashless payments and use software to determine the trip prices, a taxi meter won’t be a requirement.

Some appropriate taxi identification marks to help customers notice your car are the third necessary hardware-related investment for a young taxi company.

Another major expense is insurance. Again, depending on your local regulation, taxi cab companies are required to have liability and collision protection. While the insurance prices vary per country, this is an essential investment in your taxi business.

Documents required to operate as a mobility service vary by region. The local licensing costs vary by location and are usually around several hundred US dollars.

People will need to know about your business, so it’s better to anticipate some business marketing expenses. While definitely not on the requirements list to start a taxi business, you may also expect the costs associated with renting an office when you need one, especially when your taxi company grows.

Step 1. Analyze the local taxi market

Defining the competition is essential to starting a taxi service. Depending on the presence of global or local large players in the market, you can define the best location for your one-car company to start.

Analyzing the market allows you to see the unsatisfied needs of the target audience. This way, you can offer people exactly the services they need, which is necessary for gaining a loyal customer base later. 

The results of the competitors’ strengths and weaknesses can help you define a clearer value proposition. For highly competitive markets, this is an essential survival condition.

Market research also allows you to evaluate the possibilities of business collaboration with companies that need reliable transportation partners: think of hotels, business hubs, airports, shopping malls, and more.

Step 2. Make your taxi business idea stand out

Speaking of the unique value proposition. What can make your taxi business different from the rest? If you’re thinking of how to start a taxi business, you might as well define what you want to give your clients. Is it extra safety or extra speed? Extra comfort? Extra luxury treatment? Reliability? Unique mode of transportation? Better match with their values? Options are virtually endless.

Ideally, such decisions are backed by customer research. Talk to some people from your target audience. What pains do they have? You don’t have to set up a whole survey with a thousand respondents, but talking to actual humans will help. Use the trends listed above to figure out the perfect market segment for starting a taxi business.

One of the initial taxi business requirements, especially in highly competitive markets, is knowing your clients and giving them what they need. Offering your clients a handy and easy-to-use technology to order their rides is a great way to stand out.

Step 3. Follow legal requirements to start a taxi business

To start a taxi cab business, you need a vehicle to operate and all the papers required to operate legally. Depending on the local regulations, you will need some combination of the documents listed below:

  • Vehicle-for-service permit
  • Vehicle authorization papers
  • Insurance covering liability and collision
  • Some form of enterprise registration
  • Driver medical examination proof, the work permit, and any eventual additional documents.

If you’re planning to further grow your taxi company, it’s handy to consider the form of enterprise allowing work with multiple drivers and vehicles.

Step 4. Digitize your business

Many taxi companies start out using WhatsApp or any other messenger popular in their location. While easy to use, these apps prevent taxi companies from growing once you have more than a couple of cars. Moreover, no messenger app offers the features required to run a taxi company, such as scheduling orders, driver feedback, or intelligent queue management. They also lack safety features, driver motivation features, and many other things that made ride-hailing popular.

While it’s a fine start, a better move would be finding a fitting taxi booking software where you’d need to pay when your business idea is properly tested and your business gains enough traction.

Onde.Light is a set of apps and panels for launching functional, easy-to-use ride‑hailing services. It gives your business online orders without the need to install applications. And the best part: it’s commission-free! This way, you can test your taxi cab business idea at the lowest possible cost.

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Step 5. Get funding for your taxi company

Investing in marketing, branding, and general brand visibility is what many young entrepreneurs can’t afford immediately. To grow your taxi business, you’ll need to seek funding.

There are various ways to raise funds for your ride-hailing company, from business accelerators to crowdfunding. To convince potential investors, a well-designed business plan is a must. You can also combine several funding sources or switch among them as you proceed to new stages of taxi business development.

Business collaborations can help you grow your taxi cab business, too. Established bands with other local enterprises enrich your journey and give you the community fostering growth.

Onde.Light is a great option for getting a funding, as you can test your idea and promote your brand with Onde.Light and then show potential investors that you already have traction.

Step 6. Hire more drivers and operators

When you have your business plan worked out and you’re running your first taxi orders, it’s time to scrutinize your taxi cab company business model again, with attention to scaling.

How many employees does your company need? Will drivers use their own vehicles? What’s the pricing model? Will drivers earn an hourly rate or just a commission? Launching a taxi business with just one car allows you to take some time to give these questions a thought. While Onde.Light makes sure your orders work like clockwork.

Don’t miss your chance to make money in a rapidly growing industry. Launch your taxi service with Onde.Light

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