Anyone run a private hire firm? Advice needed

[Combustion29]

Hi all,

I'm after some advice from anyone who has run a private hire firm or similar. I have previously run a trade firm with a team of sub-contractors and am now looking to create a similar type of business but centred around chauffeured cars in London.

Originally I was planning to start driving as a one man band, build a customer base and then create a team of drivers from there. Unfortunately, my PCO licence application with TFL is draggin on and on due to covid.

To speed things up, would it be worth just cracking on with the operator's licence and go ahead with building a team?

My issue is this - how does one build a customer base without drivers or vice versa; ensure regular work for drivers when I'm just starting out? With my previous business, I partnered with a tradesperson who worked alone so there was already a base to build on.

N.B. I'm aware of all the other compliance and legal obligations for this type of business as well as the costs.

Thanks in advance!

[Mr Tidy]

I have no experience of running a company like you plan but in the mid-2000s my employer had a contract with a chauffeur company that also had a contract with at least one other US-domiciled corporation for airport runs, etc.

Getting your foot in the door with global operations like that ought to be a good start.

Good luck anyway.

[Combustion29]

Thanks, but its more how to get started without driving myself. I'm clear on how to create demand

[Taita]

I think Tyre Smoke and GlasgowRob run firms.

[akirk]

Combustion29 said:

My issue is this - how does one build a customer base without drivers or vice versa; ensure regular work for drivers when I'm just starting out? With my previous business, I partnered with a tradesperson who worked alone so there was already a base to build on.

You either:

- start small and bring on new staff as demand builds
- fund the start up period to employ staff and have them available before securing contracts
- potentially get contracts to start xx days ahead to then buy you time to bring in the staff

not sure how any business starts with a multiple team of staff unless you have the funding to underwrite their salaries?

[Combustion29]

Yeh that's basically what I thought. Your first point requires me driving myself and the other bascially take a temporary financial hit.
I'm also curious how any business starts off the ground like this. I feel bad for the guys who just want to be an Uber driver - such a laborious process to go through.

[akirk]

So a traditional business model might be:

- owner starts
- as business gets busier, owner works beyond their hours to build business
- once big enough, owner drops back to normal hours and brings on another member of staff
- business builds more, owner takes on more hours to build business
- once bigger, owner drops back and takes on member of staff 2
etc

you also try and build up a surplus so that at the point where you are a bit bigger, 2 or three staff will bring in enough surplus to bring in number 4 and so on...

the alternative is to have funding to bring in the extra staff before the business can support them - either your own cash to invest, or an external investor

[Patch1875]

Check with your local licensing authority what is required as they are all different.

[Combustion29]

Patch1875 said:

Check with your local licensing authority what is required as they are all different.

I'm up to speed with all of that. Paperwork is in progress

[LooneyTunes]

Without wishing to be too negative, isn’t the bulk of the London market business travel related? Airport runs, client meetings, etc.

Would expect there’s quite a bit of competition for that work at present.

[Combustion29]

LooneyTunes said:

Without wishing to be too negative, isn’t the bulk of the London market business travel related? Airport runs, client meetings, etc.

Would expect there’s quite a bit of competition for that work at present.

You're correct but theres other elements to the business. My question is a general one really, regarding a subcontracting model where the founder doesn't begin 'on the tools' as it were

[mcflurry]

In London you can either hold out your hand and get a black cab, or use one of the apps such as Addison Lee, Green Tomato or Uber.
Think the key question is, "Why would a potential customer call you instead?"

[akirk]

Combustion29 said:

LooneyTunes said:

Without wishing to be too negative, isn’t the bulk of the London market business travel related? Airport runs, client meetings, etc.

Would expect there’s quite a bit of competition for that work at present.

You're correct but theres other elements to the business. My question is a general one really, regarding a subcontracting model where the founder doesn't begin 'on the tools' as it were

The answer is above - if you don't wish to begin as owner 'on the tools' then you need to underwrite it with investment - yours or someone else's...

[Combustion29]

mcflurry said:

In London you can either hold out your hand and get a black cab, or use one of the apps such as Addison Lee, Green Tomato or Uber.
Think the key question is, "Why would a potential customer call you instead?"

It wouldn't compete in that market, its a chauffering service beyond just executive private hire. I would do weddings and other things too. There are some other USPs as well. The paper work with tfl wont be done for a long time so I've got plenty of time for market research before making any commitments