How to start a taxi and private hire firm

Get your start-up moving with our guide on how to start a taxi business

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What is a taxi firm and private car hire business?

Getting from A to B in parts of Britain is becoming increasingly difficult – just look at the ailing rail network, the overcrowded tube and the clogged-up bus lanes. Fortunately, there is one sector that can benefit from all this frustration with public transport: the taxi and private hire industry.

No longer confined to helping elderly ladies with their weekend shopping, taxis and private hire vehicles now offer an invaluable service to people who need to get to work on time or simply want to get home at two in the morning after a night on the tiles. Setting up and running your own taxi firm isn’t a science, but it’s by no means simple. However, successful companies in this sector can steer their way to a very tidy profit.

It is certainly a growing market: statistics from the Department for Transport show that the number of taxis and private hire vehicles in England stood at 67,032 in 2007, an increase of 5% since the previous survey. According to the same report, there are over 30,000 taxis which are purpose in the whole of the UK, with nearly 9,000 taxis and 12,000 PHVs in the South East region alone. And there are now at least 24,593 licensed taxi drivers in the London region.

Taxi use has steadily increased over the last 20 years too, with around a third of the public using a taxi at least once a month, compared to just 16% in the mid-1980s. Furthermore with tech companies like Uber revolutionising the industry and making it more popular and accessible to get a cab.

Need a loan to start your taxi business? Find out more here

What’s the difference between taxis and private hire vehicles?

Although both serve the same purpose (to transport paying customers to their destination, help with their luggage etc.), taxis and private hire vehicles have significant differences.

Hackney Carriage taxis (black cabs) are able to pick up people off the street without a prior booking. Mostly found in urban areas, black cabs are highly regulated, with fares controlled by local councils and numbers restricted by many local authorities.

Drivers of black cabs are essentially self-employed and have to go through rigorous checks and tests before they are awarded their license. Although some Hackney Carriage drivers form co-operatives and switch their cars to saloons and other models, the majority of these taxi drivers can be found in their black cabs trawling the streets for customers with their orange light on.

Private hire vehicles, or minicabs, have to have a prior booking when picking up passengers. Usually linked by a radio circuit and operating out of similar, branded vehicles, minicab owners face stiff penalties if found touting their business to random people on the street.

Although many private hire drivers are self-employed, the majority of small firms in the entire taxi and minicab market are found in this sector.

However, if you want to be self-employed and make profit on your own, become a licensed black cab driver and go it alone. There is always the chance of setting up your own firm down the line, once you have the advantage of a driver’s badge and knowledge of a local area. Many black cab owners form co-operatives where they team up with other drivers to increase profits and run operations much like a small business.

Indeed, one of the most successful taxi companies in the UK, Computer Cabs in London, was built around a small fleet of black cabs wanting to offer customers a better deal. The firm now has a fleet of at least 3,700 taxis, taking over 13,000 bookings a day.

It is possible to mix fleets, with Hackney Carriages undertaking private hire tasks alongside standard minicabs. However, remember while it is possible for black cabs to be used for private hire use, doing the same thing in reverse is against the law.

Ready to get started? Find out everything you need to know about how to start your own business here.


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  1. Paul Marshall-2
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    Cashflow in a startup is often an issue. You’re going to want to ensure you have the right vehicle at all times that’s capable of carrying a few passengers or a full on family airport run. The cost of buying a multi person vehicle may seem prohibitive, but in the long term it may make you a much more flexible option, and you can reduce the outlay by considering minibus hire