Taxi firms potential profitability?
Discussion
mwg123 said:
In a reasonable affluent area, how profitable could a 10 car taxi firm be? Just curious to know if it would be a labour of love or a bit of a money spinner! I am based in East Hants.
Thanks,
Matt
Hello mate,Thanks,
Matt
Are you thinking of starting from scratch or have you seen a company for sale? Just curious where you got your ten car figure from
I must admit, I did toy with the idea of chucking in my job, selling one of my flats and starting a taxi firm. It would have been slightly different to most other taxi companies but i'm not sure it's worth the hassle in terms of stepping on other companies toes and how difficult it is to get permission from the council.
Is it possible to own a taxi company and work full-time somewhere else? After all, unlike most other jobs, it's in the drivers interest to work hard.
Is it possible to own a taxi company and work full-time somewhere else? After all, unlike most other jobs, it's in the drivers interest to work hard.
I got the impression (round here at least) competed quite agressively and there was a fair amount of backhanders etc.
The drivers switch between firms almost every week, but the bosses remain.
Do you need a licence from God to start one? Liverpool is saturated though I think. Same for the Wirral. One big firm has bought all the others, apart from a few who struggle to get the volume of customers and drivers.
Means price hikes are unopposed as there is no alternative
The drivers switch between firms almost every week, but the bosses remain.
Do you need a licence from God to start one? Liverpool is saturated though I think. Same for the Wirral. One big firm has bought all the others, apart from a few who struggle to get the volume of customers and drivers.
Means price hikes are unopposed as there is no alternative
King Riachard! looks like your the man to through the question at!
Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
mwg123 said:
King Riachard! looks like your the man to through the question at!
Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
By far the most profitable way to run things is to own the cars yourself, and provide the car and fuel to the driver free of charge. Then take a split of the earnings. We take 60% and the driver keeps 40% but has no hassles, as long as you can keep them busy.Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
You won't be able to keep that many drivers busy from a cold start, and drivers will only go where the work is. It's a catch 22 when starting up.
You need to be prepared to drive yourself, answer the phones, give a good service and then finance another car to start yourself off. It can take a while to get local drivers trust etc.
The other way is to buy a smaller firm (good news is that most cab companies are worthless - they are in the main run by people who enjoy, shall we say, a relaxed relationship with HMRC). That means they rarely put down their true worth through the books. We are different because we are going for company value and growth which needs to be funded by competitive finance.
Only problem with that is that the banks won't lend money on this kind of purchase. The good news is you will be able to negotiate an earnout. That means you can get the owner to guarantee his turnover or you don't pay. Cool, eh?
This is by far the simplest way in... find a guy that's retiring, take on his number, his radio, his office, his drivers, and then manage your way out of the problems. Long process but rewarding
KingRichard said:
mwg123 said:
King Riachard! looks like your the man to through the question at!
Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
By far the most profitable way to run things is to own the cars yourself, and provide the car and fuel to the driver free of charge. Then take a split of the earnings. We take 60% and the driver keeps 40% but has no hassles, as long as you can keep them busy.Im looking to set it up from scratch. The reason for a 10 car firm is i would think it would be a good number to start with and for the amount of initiial investment. as for the set up, i was thinking of renting cars to drivers on a per week basis, and supply a call centre type arangement in the background and abviously a vehicle! i suppose you call in a franchise? What are your thoughts on that type of set up? i would of thougt expansion would be easier if it worked out, and my interest would be in building the "brand"
what would be a sensible figure to charge as rent per vehicle per week, asuming a profeshional background set up ofcourse?
How is your company set up and run? how many vehicle do you run?
Thanks,
Matt
You won't be able to keep that many drivers busy from a cold start, and drivers will only go where the work is. It's a catch 22 when starting up.
You need to be prepared to drive yourself, answer the phones, give a good service and then finance another car to start yourself off. It can take a while to get local drivers trust etc.
The other way is to buy a smaller firm (good news is that most cab companies are worthless - they are in the main run by people who enjoy, shall we say, a relaxed relationship with HMRC). That means they rarely put down their true worth through the books. We are different because we are going for company value and growth which needs to be funded by competitive finance.
Only problem with that is that the banks won't lend money on this kind of purchase. The good news is you will be able to negotiate an earnout. That means you can get the owner to guarantee his turnover or you don't pay. Cool, eh?
This is by far the simplest way in... find a guy that's retiring, take on his number, his radio, his office, his drivers, and then manage your way out of the problems. Long process but rewarding
With a Hackney licence you can pick people off the street? So the call centre won't need to keep them busy all of the time i asume.
How many people do you employ in your call centre, what hours do they work? And if don't mind me asking, what is the average taking per cab on a friday and saturday night?
Thanks,
Matt
My firm is 100% Private Hire. I don't deal with Hackneys at all... there are several reasons for this.
Hackney drivers will still expect work from you if they are paying an inflated price to rent a taxi. You can go and get a skoda superb for £50 a week from most taxi shops, why should they pay you £200 a week unless the car comes with steady work?
Hackneys can pick up off the rank, that's true... but you try making a driver turn up to mrs bloggs at 37 Arcacia Terrace for a £3.00 fare when he's just picked up going out of town for £40.00.
You won't get any of the fare value... your business model will be based on the rental income only. With ten busy cars that will be around £2,000 a week, from which you have to maintain the cars, keep them plated, pay your operators licence, pay for the radio, computer system. phone bills, office rent etc etc.
You won't be able to double shift the cars. If you rented a car you'd expect to take it home.
What I do is run purely private hire. This gives me great control over cars and drivers - they do as I say, not as they please. They now trust me to find them lots of work. Because we are reliable, we are taking a lot of the trade away from the Hackney operators.
I can put three drivers in my cars per day... so I have a night driver, a day driver and a split driver in each vehicle for the most part of the week. That means I get 3 times as much cover as I could have if I rented the car out
And finally, because I get a share of every single fare the drivers do, our turnover with 12 cars is c. £20,000 a week, from which the drivers keep £8,000. Then I have £12k left to run the same amount of stuff as the guys taking £2,000 a week.
Which probably explains why we're able to market ourselves so effectively
Hope that helps.
Figures given are just examples
Hackney drivers will still expect work from you if they are paying an inflated price to rent a taxi. You can go and get a skoda superb for £50 a week from most taxi shops, why should they pay you £200 a week unless the car comes with steady work?
Hackneys can pick up off the rank, that's true... but you try making a driver turn up to mrs bloggs at 37 Arcacia Terrace for a £3.00 fare when he's just picked up going out of town for £40.00.
You won't get any of the fare value... your business model will be based on the rental income only. With ten busy cars that will be around £2,000 a week, from which you have to maintain the cars, keep them plated, pay your operators licence, pay for the radio, computer system. phone bills, office rent etc etc.
You won't be able to double shift the cars. If you rented a car you'd expect to take it home.
What I do is run purely private hire. This gives me great control over cars and drivers - they do as I say, not as they please. They now trust me to find them lots of work. Because we are reliable, we are taking a lot of the trade away from the Hackney operators.
I can put three drivers in my cars per day... so I have a night driver, a day driver and a split driver in each vehicle for the most part of the week. That means I get 3 times as much cover as I could have if I rented the car out
And finally, because I get a share of every single fare the drivers do, our turnover with 12 cars is c. £20,000 a week, from which the drivers keep £8,000. Then I have £12k left to run the same amount of stuff as the guys taking £2,000 a week.
Which probably explains why we're able to market ourselves so effectively
Hope that helps.
Figures given are just examples
Edited by KingRichard on Tuesday 24th June 09:46
Adam T said:
Dave,
how is your Limo service going?
Have you had much luck with the supply to Gov? Things are hopefully keeping busy for you mate.
Adam
Supply2Gov is pretty disappointing. I put loadsa effort into building my profile and I'm not seeing anything in my area come up how is your Limo service going?
Have you had much luck with the supply to Gov? Things are hopefully keeping busy for you mate.
Adam
Does it change if you upgrade your account? I seem to be receiving the same tender invitations over and over, and I guess these invites are just examples for non-subscribed members?
Cheers
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