PCO / Taxi Hire Business

[trowelhead]

So plenty of uber drivers looking for cars to get started quickly...

Start LTD for limited liability
Buy 3-5 used Priuses for 4k each (seem to be a good choice for cheap running / reliability)
Take out small fleet taxi insurance
Rent to uber drivers for £150 a week per car

Tell me what i'm missing. I know it would be a PITA to maintain and track a load of sheds, but the return seems like it could be good!

[kiethton]

I'd be worried that your hireee would stuff the taxi's rendering the insurance cost for subsequent years astronomical.

Also you may need to consider the maximum age/condition of car for PCV licensing requirements.

There are a fair few firms doing this already - remember seeing a few advertising certain cars for £x p/w on ebay a while back

[trowelhead]

kiethton said:

There are a fair few firms doing this already - remember seeing a few advertising certain cars for £x p/w on ebay a while back

Exactly, hence why i'm thinking it must be profitable

[LPOOL]

I looked into this myself at the start of the year but insurance was the killer. I enquired about 5 vehicles for taxi use and figures of almost £15k came in. I am based in Liverpool which is high for insurance so may be cheaper for you. This was for private hire and not Uber though so not sure if that will make any difference. Probably could of got it cheaper by limiting age etc to over 25 or 30 etc I imagine. I have seen some companies renting cars and then the drivers sorting own insurance out. However did not want to do that as cars will be in my name / business name and would not want to rely on others insuring my assets?

[drainbrain]

I've just retired and cashed out of a 300 car inner city private hire firm of which about 125 of the cars were owned by the firm. I am pretty certain the idea you propose would make either nothing or next to nothing.

[MrJuice]

One uber driver I had once said this was his dream business model. He seemed to think it would make loads of money

[Glasgowrob]

don't be put off by the naysayers,


similar scenario up in Glasgow with Uber drivers unable to get their hands on cars £170-180 a week rental is the norm for clapped out ex police focuses and astras. insurance is a killer as one of the markets biggest underwriters went belly up recently causing myself and others a lot of grief.(we run a small Private hire(minicab co) up here in Glasgow and are starting to do similar

but if you do the maths

£4500 for a car
£2500 a year for insurance
£1500 a year for maintenance

thats me being probably a touch pessimistic on the maintenance if you don't mine getting your hands dirty or have a tame mechanic to hand. break even point is 11 months and up here you would be expecting 3 years service out your cars insurance should drop over the years and obviously you have a vehicle that albeit not worth a lot still has a minimum value of £500-1000 at the end of its service life.

the figures above are quite pessimistic as i've seen ex plod cars going cheaper, you could also push a bit more into the budget buy a few ex fleet Mondeos etc for not much more at 3 -3 1/2 yr old and charge a bit more theres a lot of permutations of the above calculations ranging from £175 a week for an ex police focus or the above mentioned priuses, right up to charging £225-250 a week for a 3yr old E class.

if your after more info drop me a email or PM can give you some general pointers. or dare i say it if you don't mind renting vehicles in Glasgow we could offer some sort of arrangement.


Rob

[drainbrain]

Sorry Rob, but I have to disagree with almost all of your post. Not even GPH or Network rent cars at those prices.

And it is by no means difficult to find a private hire car to rent in Glasgow for less than £150.

If I could also ask you, why do you think those two companies I've named only put new vehicles on their ranks?

Edited by drainbrain on Tuesday 16th August 20:22

[Glasgowrob]

drainbrain said:

Sorry Rob, but I have to disagree with almost all of your post. Not even GPH or Network rent cars at those prices.

And it is by no means difficult to find a private hire car to rent in Glasgow for less than £150.

If I could also ask you, why do you think those two companies I've named only put new vehicles on their ranks?

Edited by drainbrain on Tuesday 16th August 20:22

think you might be mistaken £170 for a skoda rapid off network atm. and I know GPH are looking at £160 a week for their 61 plate berlingos.a lot of the medium fleet operators who have cars at the established PH companies have been warned not to put motors near Uber and its driven demand up.

[Glasgowrob]

in regards to the new vehicle comment difficult to say but next time i bump into one of the Cassidy boys i'll ask them their reasons,


economy of scale of having a large matching fleet for ease of repairs/maintenance cost,how much do you reckon Network is paying for a base spec Rapid when their buying 20-30 at a time. i can't imagine its much over 12 grand a piece, if you plan on running it for 6/7 years it makes sense to buy new vehicles once your established as a renter.

factory warranty for at least the first year saves you that projected £1500 on maintenance out my figures which means your break even point is probably somewhere around month 21/22 depending on various factors, by which time you have a 2 yr old car that your still going to be charging for for the next 4-5 years and is only going to cost you insurance and maintenance. more than happy to discuss the ins and outs with you Drainbrain, its an industry i've grew up in and i've pretty much seen every side of it. vaguely remember my Dad having various onions and cavaliers once upon a time

the markets changing at a frightening pace, mainly thanks to the arrival of Uber in the uk in the last few years. they now have 20k plus cars in London alone, and although the team in Glasgow are very cagey when it comes to figures, speaking to the various Uber groups for drivers in Glasgow i'd conservatively say they have between 3 and 400 drivers in Glasgow at the moment. i could sit here all night and moan about them and how they are driving the prices down and ruining the trade, but if you can't beat them and don't want to join them you need to find a way to get a slice of the pie

Edited by Glasgowrob on Tuesday 16th August 20:59

[drainbrain]

Glasgowrob said:

drainbrain said:

Sorry Rob, but I have to disagree with almost all of your post. Not even GPH or Network rent cars at those prices.

And it is by no means difficult to find a private hire car to rent in Glasgow for less than £150.

If I could also ask you, why do you think those two companies I've named only put new vehicles on their ranks?

Edited by drainbrain on Tuesday 16th August 20:22

think you might be mistaken £170 for a skoda rapid off network atm. and I know GPH are looking at £160 a week for their 61 plate berlingos.a lot of the medium fleet operators who have cars at the established PH companies have been warned not to put motors near Uber and its driven demand up.

I'm not mistaken. And, as you've mentioned them, GPH have just closed a deal for 200 brand spanking Berlingos to replace the older (that means > 5 years) motors which will be rented at 160 along with the rest of their whole spectrum of different makes from different years. They've just taken over the renting of the first part of Keycars' fleet, the oldest of which (4 of them) are '61 plate and most of which are 2014 and 2015 cars. And Stevie like every other large operator is not the slightest interested in the rental of cars as a profit making business, despite (like Network and Keycars) owning a garage to deal with the fleet. All 160 a week. Same as Scott Thompson and Greg Campbell at Keycars and Soapy at Hampden who also have a garage. The cars (universally considered as a damn headache) are only provided in the first place to keep good cars on the rank. And also because it is highly undesirable to have too many cars on a rank outsourced from any one individual or firm just in case that outsourcing firm decides to withdraw them etc etc.

Of course Mr Mateen (Cars 4 U) and Sunny (can't remember what his firm's called) will rent the type of old car you're talking about, but for considerably less. And then there's P&J who are about the only people I know who deal in used ex-cop cars etc but you're not talking many cars and you're not talking very dear per week either.

At Keycars the average car was about £1250pa to insure. But GPH is considerably less than that. And it STILL isn't a desirable "business" not least because AS a business, it is worth exactly what the cars are worth. Not a penny more.

GPH will shortly buy the rest of the Keycars fleet for whatever the cars are agreed as worth despite every one of them being rented out.

Trust me, it's a ste business. The part I hated most as a private hire firm owner. And it really isn't done the way you're saying. Those cars you're talking about buying are out of warranty and already running high miles on the clock. They are money pits. Within a year of shyte roads, and 40000 extra miles on the clock from a not too fastidious driver and 1000's of none too clean and careless passengers mostly on short run journeys and the thing's a scrapper

[drainbrain]

Glasgowrob said:

in regards to the new vehicle comment difficult to say but next time i bump into one of the Cassidy boys i'll ask them their reasons,


economy of scale of having a large matching fleet for ease of repairs/maintenance cost,how much do you reckon Network is paying for a base spec Rapid when their buying 20-30 at a time. i can't imagine its much over 12 grand a piece, if you plan on running it for 6/7 years it makes sense to buy new vehicles once your established as a renter.

factory warranty for at least the first year saves you that projected £1500 on maintenance out my figures which means your break even point is probably somewhere around month 21/22 depending on various factors, by which time you have a 2 yr old car that your still going to be charging for for the next 4-5 years and is only going to cost you insurance and maintenance. more than happy to discuss the ins and outs with you Drainbrain, its an industry i've grew up in and i've pretty much seen every side of it. vaguely remember my Dad having various onions and cavaliers once upon a time

the markets changing at a frightening pace, mainly thanks to the arrival of Uber in the uk in the last few years. they now have 20k plus cars in London alone, and although the team in Glasgow are very cagey when it comes to figures, speaking to the various Uber groups for drivers in Glasgow i'd conservatively say they have between 3 and 400 drivers in Glasgow at the moment. i could sit here all night and moan about them and how they are driving the prices down and ruining the trade, but if you can't beat them and don't want to join them you need to find a way to get a slice of the pie

Edited by Glasgowrob on Tuesday 16th August 20:59

That isn't how these fleets are bought. For £12k each. The only 6/7 year old cars on the larger ranks are cars drivers own. I recently sat down with Keir at Skoda and worked out a deal to take new cars (on finance of course because the tax allowance on ph cars ain't the same as hacks) which got returned after 3 years on condition that they'd be immediately replaced by new ones and rinse and repeat. And that's on a relatively small order of 50.

I also disagree with you about Uber. I know a couple of firms were a bit spooked at first, but it's not how it's worked out. No way is Uber cheaper than regular ph in Glasgow and especially during peak time its massively dearer. And has to be paid by CC. And they don't do accounts! And a whole raft of other hassle. And let's be really honest here, apart from students (4 to a car), visitors who already use the service elsewhere and plain daft people who like paying more for exactly the same drivers in exactly the same cars and almost all of those confined to the city centre, who uses them? How many do you see in the schemes? None. And how much business do you think the ph firms have lost to them? None. So nobody moans about them. There's nothing to moan about. Many if not most of their drivers are only there part-time anyway and carry PDAs from mainstream ph firms. They don't get bunged anymore for bringing new drivers which is the only way they got any drivers in the first place. And even the stupidest uber driver knows he's being roundly exploited.Round about now the earliest Ubermen should be receiving their tax demands. That'll be fun!

You might be surprised how many drivers ph firms are losing to them. Now the bunging's stopped, it's none. Even before that it wasn't many. Think about it. How many did you say they've got? 300? So how many are new to private hire taxi-ing? 100? So how many between every ph firm plus hacks have they taken? 200. Probably about right. And of course Hailo is coming round the corner. And guess where THEY'LL be getting their drivers from. And anyway these days who hasn't got an app? Come on. Uber's a waste of time everywhere outside London. Even there only the hacks are complaining.

[Glasgowrob]

All depends how rigorous you are with your maintenance

Having seen the standards in other peoples workshops and the that'll do attitude to putting cars back out into service it's no wonder they don't last

Any car will do big miles of its maintained correctly. Yes it's difficult when you have drivers that don't care about the car passengers that treat it like a skip and roads that knock lumps out them.


Don't be fooled for a minute that these big operators are putting cars out at cost just to put decent motors on the fleet. That's a very naive view and if you think these companies are not making money hand over fost then think again. Out of interest how many motors you still got plated?

[Glasgowrob]

Despite your head in the sand approach uber is not going away, and if anything they are going to solidify their position over the next 6-12 months. Ubers problem is both the huge number of new to the trade drivers in comparison to traditional PH companies and their lack of in house fleet
To put drivers in.
Right now drivers are desperate to get their hands on cars and are paying through the nose. 60 plate Mondeo £180 a week? 13 plate Rapids £170. Uber are already chasing business customers and offering account services elsewhere Its coming to Scotland and those precious big fish are going to find themselves being the small minnows in the
Pond.

But back on topic there are lots of opportunities out there for renting cars out interestingly enough saw an interesting model being put out last week £35/ shift rather than weekly or split bag hard on cars but if you have the demand it's ruddy profitable

[drainbrain]

Glasgowrob said:

All depends how rigorous you are with your maintenance

Having seen the standards in other peoples workshops and the that'll do attitude to putting cars back out into service it's no wonder they don't last

Any car will do big miles of its maintained correctly. Yes it's difficult when you have drivers that don't care about the car passengers that treat it like a skip and roads that knock lumps out them.


Don't be fooled for a minute that these big operators are putting cars out at cost just to put decent motors on the fleet. That's a very naive view and if you think these companies are not making money hand over fost then think again. Out of interest how many motors you still got plated?

Last point first: Until last month I WAS one of those operators. And I'm just off the 'phone to someone talking about exactly that. Of course it's to keep decent motors on the fleet. Like advertising. How much business do you think peak time radio advertising makes? Or hoardings. Or newspaper ads? Want to know? NOTHING. Not one single extra fare/call. But what they ARE good for is driver morale. Like decent cars. Drivers like driving decent cars. Having them keeps good drivers on the rank. Reduces the moaning. Passengers, especially account customers, also prefer being picked up in new or newish cars to smelly old scrappers. That's why they are constantly disposed of and renewed. Why else?

Yes they make money. Peanuts is what they make. There are 1000 things that can make the same and more for far far less input. And they also all too quickly become worth next to nothing. And that is exactly why very few of the 'old hands' run their own cars. They all rent. Because they don't want the hassle especially the cost. Some of them drive carefully and take care of their cars because they know it's the tool that makes them a living.

But now and then a Skoda smacks its sump nut on a speed bump and cracks the sump and drops its oil and if the driver doesn't notice then 60 seconds later the rods are buckled and the cylinder head's gone. And an engine in and out is £1500. And that's two years profit! Gone in 60 seconds! Don't even get me started about EGR valves and trying to get drivers to decoke them and the carbon getting into the turbo which is one very expensive cheap bit of plastic and ……I mean it's such a hassle there's even a new industry in removing them! (for £300). Rob, it's a nightmare. And there is only one kind of car which just MIGHT survive up and over 200k on the clock (5 years of private hire). And that's the car which isn't rented. It's owned. By a very careful and fastidious driver. Which is MAYBE 1 in 10 drivers and maybe more like 1 in 20.

Keycars (as I am tonight reminded) doesn't have 125 plates it has closer to 170, although they're plated in several different names. Plates can't be transferred so every one will have to be reapplied for. That takes months. So those cars will be off the road for those months. Another hassle. Tell trowel head he'll have to keep the car sat somewhere insured or at storage cost and unable to work for for THREE MONTHS!!! whilst Glasgow City Council potters towards issuing it a plate.

Like the endless tyres. And clutches (plus flywheel) and timing belts (another engine-killer) and ball joints and track rod ends and even steering racks. And the occasional nightmarish gearbox problem or endless auto electric issues. And the cost of fishing them in from far flung destinations when the problem happens en route esp on motorway. (And Junior at M8 Recovery sucks his teeth in and talks £150 plus storage plus anything else he can think of) And the issues which really only the AD can handle. And even if you've got a garage the mechanics still need paid as do the parts suppliers……oh yes and we haven't even started on GCC's extortionate plating fees and twice yearly inspection fees and voids when regular drivers take a holiday and on and on and of course the guy getting £10 per car per week to keep the mountain of paper administration in order and the drivers who don't want to pay when the car's off the road for a day or two to get fixed….

…shall I go on?

[drainbrain]

Glasgowrob said:

Despite your head in the sand approach uber is not going away, and if anything they are going to solidify their position over the next 6-12 months. Ubers problem is both the huge number of new to the trade drivers in comparison to traditional PH companies and their lack of in house fleet
To put drivers in.
Right now drivers are desperate to get their hands on cars and are paying through the nose. 60 plate Mondeo £180 a week? 13 plate Rapids £170. Uber are already chasing business customers and offering account services elsewhere Its coming to Scotland and those precious big fish are going to find themselves being the small minnows in the
Pond.

But back on topic there are lots of opportunities out there for renting cars out interestingly enough saw an interesting model being put out last week £35/ shift rather than weekly or split bag hard on cars but if you have the demand it's ruddy profitable

As regards Uber, don't forget that it doesn't actually make ANY profit at all. Oh it's got a HUGE potential value. But it's just a silly unicorn bubble game. It makes ZERO profit. One day it might, but not on its current business model.

And now you're saying two different things. 1) ph firms are losing drivers to uber 2)they have a huge number new-to-trade.

Rob, they're not new any more. And if 2) is right, then they've maybe taken 1% of drivers from ph and hack firms. MOST of whom were bribed to go by other uber drivers who were bribed to get them to go. Why do you think they CAN'T get drivers to join them? Shall I tell you? It's not that hard. It's because drivers don't make as much money at Uber. That's why. No more no less.

So what happened was when the minimum 'bribe period' was fulfilled most of the ex ph drivers just drifted back. With some working both Uber system AND a ph PDA as well. Owners howled about it. Personally I said why get upset? They only want to fight each other over the surge work because that's the only time it's worth their while. And it's also the worst time for normal ph to get the work covered. So they end up doing the rush hour work for double bubble, but then it dawns on them that they're only getting half the number of fares because of the rush hour problems that makes it difficult for ph firms to cover in the first place.

Then Uber's next horror is that the new-to-trade drivers quickly discover that they can make more money at normal ph firms. And according to you, pay substantially less for car hire. AND they get tips. AND they get account work. AND they can do cash work . So what happens? Yep. You've guessed it. Bye bye Uber hello Network/GPH etc etc.

And what about Hailo? Won't we be getting them soon? And how many others are going to jump on the bandwagon? Well I don't think it'll be many if it remains unprofitable.

If I were you and I was going to remain in that industry I wouldn't be looking at renting clapped out motors to newbie uber drivers. I'd be looking at where electric driverless cars are going to fit in. Uber's zero threat to ph. Nor are the driverless electric cars. But the latter is where adaptation to the market is moving towards. Because, let's face it, it isn't that hard to copy Uber's business model which many would certainly do but for its one huge drawback. It doesn't make any profit. For them OR the drivers.

Edited by drainbrain on Tuesday 16th August 23:26

[uber]

In a lot of regions Uber has already started offering subsidised rental / insurance to drivers which is something they seem to be trying to roll out globally.

I understand they are working on a universal model which will be used everywhere and have built in "features" like accessibility for disabled & baby seats etc.

Then after they have all that driver and behaviour data they are collecting they will be getting rid of the drivers who helped build the business to go with the self driving cars.

I use Uber a lot overseas and its a varied bag. In the UK outside London its bad and in Glasgow its like they hire people who have been rejected from elsewhere. I was in Belfast a few weeks ago and the driver said they were sold the dream, offered a guaranteed income them again it was pulled from under them so a lot were going that day to argue it out with the local team.

[insurance_jon]

Glasgowrob said:

insurance is a killer as one of the markets biggest underwriters went belly up recently causing myself and others a lot of grief

enterprise?

[drainbrain]

uber said:

I use Uber a lot …….. in Glasgow its like they hire people who have been rejected from elsewhere.

Is it that bloody obvious?

[Glasgowrob]

drainbrain said:

Is it that bloody obvious?

Still remember that lassie from the radio saying her uber driver didn't know where Glasgow Airport was
Drainbrain what you doing with yourself these days? Retired or moved to pastures new?

Slightly confused by your playing issues surely business plates and a change of day to day manager is all you need?


As regards to car issues if you can't get 200k out a car it's either being driven by idiots or maintained by idiots
Remove the idiots So many people don't inspect cars regularly or come down hard on people not looking after them. It's not difficult although maybe a lot easier when you're not running multiple hundreds.

As for the skodas known issue vw offer a steel sumpguard off the shelf which even the most kamikaze of drivers can't seem to break. I've fitted a couple of these and they work a treat. Although i have to admit to only running one A5 octy not a fan personally. Superb on the other hand....


Even the berlingos are solid(apart from the odd bits of trim or door falling off) the pug/ford 1.6 diesel is a cracking lump as long as you service them properly ie regular and use a decent and correct oil. So many people try to cut corners and save a few quid in the short term and it bites them. Then again sometimes you get screwed by rubbish manufacturer issues as well Tourneo oil pumps being a particularly sore point.

But in regards to uber not being profitable, Amazon up until this year have not being profitable. Ubers growth is unparalleled. 450 cities around the world throwing money around like its going out of fashion their not profitable as they are dropping every penny into their growth. They take 25% of drivers takings (30% for exec) with little in the way of overheads 3 staff in Glasgow and a broom cupboard. They can throw money at Free rides and silly promos like delivering Icecream (albeit rubbish icecream) until they have their app on every smartphone in the city. Look at an established market like London 23000 uber drivers with plans to double that inside 24 months. Their taking huge market share whether established operators like it or not. And yes a lot of their drivers are transient and many new to the industry. But the problem is there's thousands more ready to give it a bash, Ubers already recruiting unlicensed drivers in Glasgow and arranging badges for them. Mark my words they will be the dominant company in Glasgos within 24 months and the rest of us will have to adapt to take a slice of the pie. Already seeing vehicles rented out by the shift in some quarters wonder how long it will be before your seeing a vehicle having 2/3/4 drivers on it as the norm

Edited by Glasgowrob on Wednesday 17th August 23:07