How to profit from a taxi business: Making money from every mile
Running a taxi business can be extremely profitable. Though the industry has been challenged by economic forces and pandemic lockdowns, there are still plenty of fares to be picked up. The general public also still relies on private hire taxis for much of their day-to-day travel. There are plenty of ways to make a profit from operating a taxi firm. Consider making some simple adjustments to the way you do business, such as the ones below.
Providing vehicles for drivers
Running a private hire taxi firm allows you to create a few different revenue streams. Renting cars to taxi drivers can be one of the most profitable ways to make money in the industry. You do not even have to operate a taxi firm to do this. However, when you pair a private hire business with cab rentals, you can begin to generate a lot of income from just a few cars working on your fleet.
Private hire firms charge their drivers radio rent, often called ‘the settle’ in the industry. This is how much the drivers pay to receive jobs from your system. This is a set price and covers your costs with a little profit, but the amount you make will be limited. How much you charge for radio rent has to be competitive with other firms in your area. By renting out private hire vehicles, you can make a lot more from your drivers, and if you use modern vehicles, the cost of maintenance will be greatly reduced.
Check out the new Golf Estate from Cab Direct. Here, you can find some excellent and efficient new vehicles to add to your company’s fleet. The Golf Estate makes a great taxi, with room in the bag for luggage on airport runs and a comfortable and spacious interior for passengers. By getting a great deal like this, you can rent out the car to drivers on your firm and make money every week on the car as well as on the settle. Your drivers and customers are happy with a high-quality vehicle to use, and you make more from your business.
Multi car insurance deals
If you rent private hire vehicles to drivers, you have an opportunity to make a little profit on insurance deals too. Multi-car or group insurance for a large number of drivers is much more cost-effective than each driver paying for their insurance individually. You can include insurance as a part of your rental agreement, and in the costs, and both you and your drivers save money. This helps your vehicle rental service offer more value to drivers and creates a small revenue stream for your business.
Operating a business and vehicles puts you in the driving seat when you are looking for an insurance deal. From an insurer’s perspective, you are bringing a lot of business to their company which makes you valuable. You will be able to negotiate a much better price for top-quality private hire vehicle insurance, and every penny you save will add to the amount of profit you make every week from your rentals.
With some excellent vehicles in your rental fleet and the advantages of a multi-car insurance deal, you can offer private hire vehicle drivers a great deal while also making sizeable profits on every rental. Offering an all-in-one deal to drivers for a car and their insurance makes operating a private hire taxi simpler and easier for the drivers, which gives them value for money. Grouping their insurance creates savings which will help keep your rates competitive when compared to other providers.
Cutting costs in the office
When you are operating a private hire taxi business, you will need an office or base to run your firm. This will be a place for drivers and potential drivers to come to address any issues or arrange maintenance of your vehicles. It will also be a place where you can run phone lines to take jobs for drivers and handle any customer queries. Staffing is one of the primary costs on the balance sheet of any business, and modern technology is helping taxi companies save money on staff in the office.
Ride-sharing and taxi-hailing apps have become very popular with the public. These are quick and convenient ways to arrange a taxi, and it reduces the need for telephonists in an office to answer calls. Though you will need at least one operator in your taxi office to despatch work and monitor drivers, you no longer need people to answer the phones and process jobs, as apps are doing a lot of the work for you.
Switching to modern solutions like these can greatly reduce your staff expenditure, increasing your profits. There are also online services that will provide you with remote telephonists and automated answering services to handle excess calls for a set fee. This allows you to provide the same level of service at peak times without having to hire full-time or part-time staff members in the office.
Making some simple changes to how you operate a taxi business can boost your profits. Rent vehicles to drivers, use an app to reduce your reliance on office staff and leverage your buying power with insurers.