Calculating the Cost of Running a Taxi Business

If you have been watching the news in the past few months, you will know that taxis have grabbed up some of the headlines. The trials and tribulations of Uber in London have shown the issues faced by many taxi drivers, whether they work for themselves or as employees for the taxi company. Uber have appealed against a decision to revoke its licence in the capital.

Running your own taxi firm can have a couple of drawbacks – rude customers, occasionally quiet business and mountains of admin work are all possible. However, by knowing the costs involved from the start, you should be able to get your taxi business running in no time, whilst being able to determine how much work you need to do.

Initial Purchases

To start your own taxi firm, you will need to purchase a few items, which are:

• A driving licence for taxis or private hire vehicles – these tend to cost a few hundred pounds per vehicle

• Car insurance – you will need to find specialist taxi cover that insures the cars, drivers and passengers. Annually, it should cost in the region of £1,000 per vehicle, but this depends on where your business is based and how often you use you vehicle

• Business premises – a small office will make it much easier for you to run your taxi firm, park the taxi and take calls. You could use your home as your office if you want to save on running costs

• The biggest expense of all is for the taxi itself. It must be road legal, easy wheelchair access and fully comply with all the taxi laws in your local area. Buying one from a specialist taxi retailer will make sure you have the right vehicle.

Additional Costs

Once you have your licence, insurance, a business address and a taxi, you are now ready to start. However, there are a few more costs to take into account. An absolute must-buy for hull taxi owners is a taximeter, which is essential for a taxi in Hull. These cost a few hundred pounds and are a must for taxis in Hull.

Radio equipment is also essential. This is used for communication between drivers and the taxi firm’s office, helping them to know where the next pick-up point is and also to assist for anything else. Remember that a licence is needed for it, which can be sorted by the equipment supplier or by contacting Ofcom. There is also the fuel cost associated with running a taxi in Hull. Look at the taxi’s fuel economy figures to help you to calculate your fuel costs.

In total, setting up a taxi business will cost more than £10,000 initially. It may seem like a lot, but by driving economically, shopping around for the best equipment prices and insurance and looking to cheaper technology, you can bring running costs down.