How to start an airport shuttle service
If you like to drive and meet people from around the world, then starting an airport shuttle service could be the best start-up idea for you. Discover how here
Wondering how to start an airport shuttle service? Follow these key steps:
In this guide, we’ll provide you with the key information you need to know to start an airport shuttle service business.
Who is suited to starting an airport shuttle service?
Entrepreneurs that enjoy:
- Driving – you’ll be spending many miles on the road, especially in the beginning
- Socialising – you’ll need to be a friendly people person that can make small talk with a variety of people
- Organising – you’ll have to be able to manage flight details, fleet timetables, as well as staff schedules and paperwork eventually too
When you first start your business, it’s likely you’ll have to combine all three of these skills. In time, as your business grows and you discover the area in which you excel, you can hire staff and delegate tasks.
Now, it’s time to learn the steps you need to take to start your airport shuttle service.
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1. Conduct market research
If you want to start an airport shuttle service, then the first step you have to take is to find out if it’s a service that’s required in your area. This means working out the distances to the nearest airports, as well as looking at how heavily they are used.
Find out if there is demand in your area
The amount of people transiting through the airport will directly affect your business prospects, after all – the greater the amount, the more likely it is some passengers will need to use an airport shuttle.
If you’re within reasonable driving distance of a high-use terminal, then a shuttle service is likely to be required.
Alternatively, you may be in a remote area with an airport that only services occasional flights, meaning that although the flights may carry fewer passengers, you may have a monopoly on shuttle services in your local area.
Also, don’t forget to seek out any potential partnerships. This means finding out how many hotels or other accommodation providers are in your area, as well as key destinations such as conference centres or tourist attractions, which are all likely to want to get their guests from the airport quickly and safely.
What’s the competition like?
It pays to discover what the competition in your area is like – you don’t want to spend lots of time on your dream business idea, only to realise that another company already has the market share. To work this out, consider if there are many shuttle services competing for work? Conversely, are you situated in an area that’s currently underserved by an airport shuttle service?
Once you’ve done the groundwork, you can use this to help build your business strategy. A strategy needs to be clearly directed – this is when writing a coherent, focused business plan is vital.
A free business plan template is available for you to download here.
2. Research costs and equipment
To run your airport shuttle service, you’ll need to know how much money to set aside for costs and equipment, as well as what exactly these will entail. Here we break down some of the key components to include in your budget.
Your primary expenditure will be your vehicle, which for shuttle services is usually a minibus. This type of vehicle can normally seat nine-16 passengers, in addition to the driver. As the vehicle will be central to your business, you need to ensure that it’s reliable and roadworthy.
So what are your options for acquiring the best vehicle for your business?
- Purchase a minibus outright
- Lease a minibus on a monthly or yearly basis
In the early days, your start-up is likely to require only one vehicle. Then, as your business grows, you can think about expanding your fleet – who knows, it may even develop into a full-service bus company.
Purchase a minibus
If you decide to go for this option, you’ll buy your minibus, with the funds required upfront. This means you’ll need to think about:
- Finance – how will you raise the funds for the initial expenditure? This could be from personal savings, business loans, grants, or a combination of each of these
- Maintenance – your vehicle needs to be in working order at all times. Ensure to factor in costs to maintain and service it, in addition to the capital required to make the initial purchase
While minibus purchase prices can vary, we’ve done the research to figure out what you can roughly expect to pay.
- Secondhand minibuses can start from as little as £1,000, and go up to £20,000. Bear in mind that the lower down the price band you go, the more repair work it’s likely to require
- New minibuses range from £20,000-£30,000, with the price range accommodating for increased features and functions. For example, a larger vehicle with increased luggage space (essential for an airport shuttle service) is likely to be higher up the price range
- Luxury minibuses and/or those that are fully wheelchair accessible can be £30,000 and higher.
Lease a minibus
If you choose this option, you’ll be renting a minibus from a company for a fixed period of time, generally for a set monthly charge. You’ll need to consider:
- Lease length – short term leases tend be 12 months or less, whereas long term leases are anything from one-four years
- Monthly charge – what you’ll pay really depends on the type of vehicle and the company you go for. On average, minibus fees are £180-£400 per month. Note that monthly prices are often excluding VAT.
Be sure to balance your budget with your business plan to pick a vehicle and lease agreement that’s viable for your business.
How to choose a vehicle
However you choose to finance it, be sure to choose a vehicle that can match the requirements of an airport shuttle service.
This means thinking about:
- Luggage space – ensure it has plenty of room and storage for cabin and checked baggage, as well as larger items such as pushchairs and musical instruments, as well as skiing and surfing equipment
- Seating arrangements – check that the vehicle has adequate seating. Different configuration options are ideal. Plus, having a number of solo seats is particularly suitable for business passengers who tend to travel individually
- Interior design – if your target audience is families, think about a vehicle that has sturdy design and hard wearing fabrics and carpets. Whereas leather seats and luxury finishes are more suitable for business travellers
Essentially, let the needs of your target audience help drive the decision as to which vehicle you go for.
What other costs do you need to consider?
As well as your vehicle, you should budget for:
- Licence fees – to ensure you can drive the vehicle (see below for more information)
- Administrative costs – for example, registering your business
- Marketing material – creating a website, making business cards and flyers
- Payment options – card readers to offer customers an alternative to cash (take a look at our guide to card machines for small businesses)
- Vehicle extras – you may require certain additional features, depending on your target audience. For example, families may require booster/child seats to transport children safely
- Insurance – your business and vehicles have to be appropriately covered in case of accident, injury or damage, as well as protecting your staff and passengers (see below)
- Scheduling software – to keep track of your vehicles against flight arrival and departure times, some kind of organisational system is essential
If you already own a minibus, you could start an airport shuttle service as a side hustle to test the market before launching your business full-time.
3. Check licencing and regulatory requirements
If you’re wondering how to start an airport shuttle service, then ensuring you meet all the relevant licencing and regulatory requirements is essential.
What type of licence do you need?
Whether you buy or lease, minibuses are generally manual vehicles. This means that you’ll need to have the correct manual driving licence.
In addition, the regulations say that if the minibuses have 9+ seats and will be driven for hire or reward, you’ll need to meet other licencing requirements. These include:
- D1 licence – you’ll need to complete a specialist minibus driving training course to achieve this category of licence. It’s part of the Public Service Vehicle (PSV) licence for those that will transport nine or more passengers
- Passenger Carrying Vehicle (PCV) licence – this is part of the D1 licence category, as mentioned above
Do you need private hire?
If you plan to run an airport shuttle service for set routes, you’ll need to have private hire. This type of service can only operate with passengers who have pre-booked the service.
It’s also worth noting that private hire vehicles aren’t licenced to collect passengers on the spot without an advance booking – it’s illegal and you could face severe penalties for doing so.
To collect travellers from the airport without a pre-booking, you’ll have to start a taxi firm and operate as a black cab service.
4. Get insurance
This is a key step in starting your own airport shuttle service. When you’re carrying passengers for a fee and travelling in vehicles, there are multiple possibilities for accidents, injuries or damages to occur and your business must be protected against them.
Some key points to consider when selecting an insurance policy include:
- Check that the cover protects your vehicle as well as your passengers and staff
- Decide if you’ll cover all your vehicles with the same provider, and if so, find out if discounts are available for multi-vehicle policies
- Review the premiums for liability cover for your passengers
- Research options for employers’ liability insurance if you employ drivers or other staff
5. Research pricing
Getting this step right is crucial – charge too high, and you’ll send potential customers straight to your competitors that are offering similar shuttle services for less.
But if you set your price point too low, you run the risk of falling behind the other businesses in your sector and unable to offset your initial expenditure too. Consider the following questions to help you achieve the right balance:
Will it be an on-demand shuttle that waits at the airport? If you’re going to be based at a big airport with many terminals, this could be ideal. Or will passengers need to pre-book their seats? For airports that receive fewer flights, knowing how many times and when you’ll need to take the trip can be advantageous. Be sure that you have the correct licencing too, as mentioned earlier.
Will the fares be worked out on a distance travelled basis? This is likely to be the most suitable option if your routes can change depending on the customers’ requirements. Or will a set fare be in place for pre-determined journeys? This option is more relevant for set routes, such as to and from certain hotels or conference centres.
As well as the distance of the journey itself, you’ll also need to consider extra fees too. For example, will there be a fee if passengers exceed the set luggage limit per person? How much luggage you can take will usually be determined by the vehicle you choose, as well as what target audience and type of airport you’ll be working with the most.
Similarly, will you charge for wait times, and if so, how much? To work this out, you’ll need to consider parking and fuel costs (you may want to think about a fuel card), as well as take into account how many other trips, if any, you could have made in the waiting time as well.
On top of this, also consider what your operating hours will be. Is there demand for a round-the-clock service? Or will you track the key flight arrival and departure times and match your services accordingly?
The amount you spend on your vehicle – whether bought or leased – can also be factored into the pricing options you offer.
6. Find customers
While hotels and accommodation places are key places to look for potential customers, there are also numerous other opportunities to find your target audience. Depending on the demographic that you wish to focus on, this could include:
- Homestay/exchange groups
- Conference centres
- Language schools
- Business districts
- Tour companies
- Travel agencies
- Office parks
These are some ideas to get you started. It’s not an exhaustive list – just about any business that needs to get people to and from an airport regularly could be a viable source to find customers.
Although you’ll have to do the majority of the legwork to get customers, especially at the outset, it’s also possible to get customers to come to you. How? This is where having a clear brand steps in.
- Choose a name – a catchy, relevant name is essential to ensure your business is remembered
- Create a logo – a unique logo can help your service to stand out from other similar services
- Customise your vehicle – sign-write your minibus with your business’ name and logo, which doubles as free advertising while you’re on the road
After establishing what your business’ brand is, you can let people know about the services/routes you offer through effective marketing to promote them.
- Get online – a website is an essential way to showcase your business, plus it can be used to receive bookings (with the appropriate ecommerce functions)
- Print flyers – place these in spots that travellers are likely to be, and ensure your booking/contact details are on them
- Hand out business cards – especially useful at networking events or business fairs, use this to connect with potential partners and suppliers
- Set up a rewards system/loyalty cards – while building a customer base is important, it’s also equally necessary to ensure those same customers keep coming back. This is especially true if your target audience are business travellers, as they’re likely to make a number of frequent trips
Together, these elements can help to make it clear that your business is an airport shuttle service. Plus, they offer ways to show points of difference from your competitors, and ultimately, help you to find customers.
What are the next steps?
After reading this guide, you’ve learned the essential steps you need to take to start your own airport shuttle service. This includes how to ensure you meet the necessary licencing and regulatory requirements, as well as how to market your company and find customers.
So what’s next? Once you’ve completed your research and created your business plan, the next step is to start!