Starting a taxi business may require a large capital, but the gains can be spectacularly rewarding in the long run. If you are past the stage of decision-making, and you’re now completely certain about starting your own taxi service, you came at the right place. This post will give you an insight about how much it’ll cost. The expenses when starting a taxi business depend mainly on the location. However, there are major factors that you must consider before venturing on your goals. Assessing these tasks will let you calculate the nearest quote when starting a taxi service.
1. Business License
Acquiring a business license for your taxi service can be easy and smooth. If your taxi units are painted and are ready for inspection, getting a license will not be an issue. You can avail a business license from the local clerk’s office for $20 to $75, and it may cost you to roughly $3000 a year. In some areas, a business license is enough to allow you to start a taxi service. However, many cities have regulatory agencies that check and license taxi services. This system may need you to spend more money when procuring licenses to cover the inspections.
Each vehicle in the city must be insured, at least that’s what most cities implement. For cabs, expect to pay double for car insurances, says Martin from greenr cabs. Typically, local regulatory agencies set the minimum insurance fee for taxi businesses to obtain a license. However, if your city has no standards set, the type of policy you will acquire will be up to you. Usual initial costs of insurance plans are between $60 and $100 per week. Typically, 20 percent of the annual premium has to be paid for the down payment. Your monthly premium may vary depending on the type of coverage and the number of vehicles. If you have employees, you may as well consider the factors of self-employment or unemployment insurance, medical insurance, and life insurance. Expanding the plan’s coverage may increase your monthly fee, but it’s worth it, as it will encourage the drivers to work hard, stay healthy and be productive.
3. Cab Units
For a starting taxi business, acquiring a vehicle can be the largest initial cost. A taxi service can always begin with a single vehicle, and then expand as profit builds. Typically, a new car may cost from $10,000 to $20,000. Depending if it’s brand new, on its type and its manufacturer. The price may grow or decrease depending on the car you’ll choose. However, you must be extra careful when purchasing used cars. Make sure the unit, if not in an almost brand new condition, must have minimal need for repairs.
4. Taxi Needs
Never forget that there are several customizations you need to do to your newly bought vehicle. You have to paint your taxi service logo, install a meter, some top lights and a radio. These are the necessary changes you need to do to your taxi unit, and you can add more if you desire to improve its aesthetics and feel. Your taxi logo can be done by a professional painter, or can be attached as a decal. Though the latter is cheaper, and you can even install it yourself if you’re careful. The top lights are also preferred, if not necessary, as it helps your customers differentiate your taxi from other vehicles. Depending on the type of installation and style, top lights may cost between $50 to $150 per cab. However, before acquiring top lights for your taxi, check first if these are regulated in your area. In some areas, specific details must be displayed on top lights, thus better check with your local licensing agency before installing. Meters are also required for taxis. The average cost of a taxi meter can range between $200 and $400. Professional meter shops approved by the local Department of Weights and Measures can install and calibrate taxi meters for a separate $100 fee.