Whether you manage a taxi firm or you’re a self-employed minicab driver, making a decent profit is your target every day. Figures show the industry is booming, with the number of licenced vehicles in the UK increasing. On one hand, this is great news, showing the industry is doing well. On the other hand, that means potentially more competition for fares. The best way to make more money is to expand. To help you, we’ve put together our top eight tips to grow a taxi business.
1) Get on the apps to get more fares
If you have a hackney carriage licence, you can wait in high-footfall locations like stations to pick up fares. But that’s not possible if you have a private hire licence. However, on-demand taxi apps have revolutionised the industry making it easier than ever to get jobs. If you’re not already using them, now is the time to embrace the technology. Even if you are already signed up to one, it could be worth joining more to extend your potential customer base.
How the apps work
The apps use your location to match you up to potential customers and are a great way to get new jobs. They enable you to pick up jobs when you’re out and about even if you only hold a private hire vehicle (minicab) licence. It can also save you money on fuel, as you could pick up a fare when you’re on the way back from another job.
Apps are available for both private hire vehicles and hackney carriages. In different parts of the country, taxi firms have got together to create Uber-style apps to make it easier for customers to book them. For example, in York, customers can use the Yorcab app to order a hackney carriage at the push of a button rather than waiting at a rank.
When it comes to taxi apps, Uber is probably the best known but that’s not your only choice. Here’s our pick of some of the top apps out there:
Depending on the app, you may pay a monthly fee, a commission for each job you get, or both.
- Another benefit of using an app is that customers pay you online via it. That means you will be driving around with less cash on you, helping to keep you safer.
2) How to build repeat business to boost profits
One of the easiest ways to boost your profits is to make the effort to try to get repeat business. The idea is simple: you’ve already got a customer, now you do what you can so they keep coming back to you. An easy way to do this is by offering a loyalty card to your customers.
You can get these printed quite cheaply at your local print store or online. The card should include your business name and ways to book your taxi, such as your phone number. Have a section with spaces for you to fill in either using a stamp or punch when the customer uses your taxi. As a reward for using you five or 10 times, you could offer a substantial discount on the next fare.
Other strategies to encourage repeat bookings include:
- Refer a friend schemes. Hand out a discount card for your customer to pass on to someone else. If you’re on a taxi app, you may be able to integrate this and invite your passengers to share a promo code with their friends.
- Discount coupons. Give your customers a card entitling them to a discount when they next book you. You could also leave discount cards in places where potential customers may be waiting, such as the supermarket, nightclubs, or outside football stadiums or train stations.
Bear in mind the following if you want customers to use you again:
- You’ll need to be reliable. Customers won’t come back to you if they can’t be sure you’ll turn up.
- Be polite and friendly.
- Go above and beyond when it comes to customer service. For example, helping to carry shopping up steps may only take you a couple of extra minutes but could help ensure that the customer will use you again.
- Respond to any customer feedback online promptly and politely.
3) Secure accounts for a regular income
Businesses often use taxis to get staff or visitors to and from their premises. If you can get these jobs you can be guaranteed a fairly regular income.
Speak to local businesses to see if they’d be interested in setting up an account with you. You could offer a discounted rate in exchange for knowing they will use you whenever they require a taxi. Other incentives you could offer include monthly billing, 30-day credit, or a priority contact telephone line.
As well as businesses, you could try targeting:
- Local authorities.
- Special schools.
- Local hospices.
- Parents who need to get their kids to school every day.
4) Get organised to get ahead
Reliability is one of the most important traits for a taxi driver, especially if it’s a business customer or you’re operating an airport shuttle service. Taking steps to improve organisation is key.
- If you’ve got to be at a certain place at a certain time, set alerts on your phone.
- Make sure you give yourself enough time to get there. There’s no point being alerted to the fact you’re not where you should be.
- Use both a paper and online diary to keep track of upcoming jobs.
5) How to grow a taxi business by increasing your hours
Many people start driving to achieve a good work-life balance as it’s a career that lets you choose your hours. However, if you’re struggling to find fares it might be worth considering if you should increase these hours. The longer you are available to hire, the more fares you are likely to pick up. You should also think about whether working at certain times could be more lucrative. For example, if your home-life permits it, you could focus on the late-night, club-run.
- You don’t have to increase your hours to get your car working more for you. Instead, you could investigate a taxi-share. With this, you join up with another driver to drive on shifts. For example, you might drive your vehicle during the day and they will drive it during the night. Be aware that if you do this you will need specific insurance that covers two drivers for the same vehicle.
6) Target specific routes
Another way to expand your business is to target specific routes. For example, offering an airport shuttle service. Airport runs can be lucrative and customers are likely to book you for their return trip too. They are normally booked well in advance, giving you more control over your day too.
Bear in mind:
- Any on-airport costs you will need to build into your fare. Look out for discounts on these fees for taxi drivers too. For example, if you’re dropping at Manchester airport you can pay for a discount card that gives you 40% off the dropping off charges. Other airports, including Exeter Airport, also offer a discount scheme for frequent users.
7) Choose your vehicles with care
There are lots of things to think about when it comes to choosing vehicles for your taxi business. These include size, status, and running costs.
- If you plan to run an airport shuttle service, a larger vehicle with capacity for plenty of luggage is wise.
- Do you offer a high-class chauffeur service for businesspeople or VIPs? If so, you’ll need a luxury vehicle to match.
- As a driver, you’ll be covering lots of miles. It’s worth looking into the running costs of each vehicle on your shortlist. This may include, mpg, servicing costs, replacement tyre costs, and insurance costs.
- Other expenses to bear in mind include congestion charges. If you operate in a city that charges extra for diesel or petrol vehicles, it could be worth switching to an electric or hybrid model.
- Adults with mobility difficulties use taxis more than people who do not and yet many licenced vehicles are not accessible. For example, in parts of Devon, less than 5% of taxis are wheelchair accessible. By operating an accessible vehicle you can get in on this market.
8) Upscale to manage a fleet to increase income
Another way to increase your income is to expand your business with more cars and drivers. This is a good idea if you find yourself regularly turning away fares. You could run a fleet of hackney carriages, private hire vehicles or a mix of both to suit local needs.
- Are you happy to give more time to admin? Running a taxi business is different to working for yourself as you’ll have to co-ordinate other drivers and may have more paperwork to deal with.
Things to remember:
- If you employ other drivers, you’ll need to remember to take out employer’s liability insurance. If you don’t, you can be fined.
- You’ll be responsible for the actions of other people, so robust taxi fleet insurance is a must to protect yourself financially.
9) Support your business ambitions with the right insurance at a value for money price
Getting the right taxi insurance is one of the most important things you can do to support your business growth ambitions. First of all, remember you must hold specialist taxi or minicab insurance. Ordinary motor insurance doesn’t cover you if you take passengers for a reward. If that’s the only insurance you have it will be void, which can lead to fines, penalty points and you can have your licence removed.
The types of insurance you might want to consider include:
- Taxi or minicab insurance. This could be third-party only or comprehensive, depending on your budget and where you live. For example, if you live in an area with a high incidence of car crime and your vehicle value is low, third-party taxi insurance may be more appropriate for you.
- Public liability insurance. This covers you if a member of the public makes a claim against you for injury or damage to property. It’s a condition of your taxi licence in many local authority areas. Even if it is not specified as part of your licence, it is considered prudent for all drivers.
- Taxi breakdown insurance. This gets you swiftly on your way again if you breakdown, which is good for you and your customers.
- GAP insurance for taxi drivers. This pays the difference between vehicle value and outstanding finance. It could be useful if you are buying your vehicle on HP or it’s on a lease.
- Taxi fleet insurance. If you run three or more vehicles a specialist taxi fleet insurance policy can save you the hassle and cost of taking out individual policies. The more vehicles you run, the greater the savings compared to insuring individually.
- Employer’s liability insurance. This is a must if you have any members of staff either driving for you or co-ordinating things in an office. It’s required for part-time and seasonal staff as well as full-time employees and you can be fined if you don’t have it. There are some exceptions to the rule, however, including if you only employ close family members. You can find out more about if you need employer’s liability insurance here.
Buy cheap taxi insurance
Like all insurance, the best way to find the cheapest deal on taxi insurance is to shop around. Our helpful taxi insurance team is here to give you free advice on what insurance you need. Call them on 0117 955 6835 or get a free no-obligation quote.
- Find out more about the average price of taxi insurance.
If you want to find out how to grow a taxi business our guide above gives you lots of ideas to try. Whether you are a self-employed one-man-band or already have a fleet of drivers, our tips could help you to get more fares and make more money. So what’s stopping you? Take action today to see how much you can boost your profits by in the next 12 months.
Have a question or want more information on insuring your taxi business? Talk to our expert team on 01179556835 or fill in the form below for a quote.