So you want to set up a taxi firm outside of London? For the right person, it’s a great line of work. It can offer variety, a decent living and the chance to be your own boss.

But before you leap behind the wheel, make sure you’ve factored in everything from licences to payments to taxi fleet insurance. Otherwise, you could soon be running on empty.

Read on for our top tips on what it takes to run a successful taxi business away from the hustle and bustle of the capital.


Research the laws

You can start your firm with just one taxi, driven by yourself, or with a fleet. But before you get on the road, read our quick low-down on licences.

You’re going to need several.

One: a Private Hire Vehicle (PHV) operator licence – even if you’re a one-man-or-woman business.

Two: a PHV driver’s licence for each driver. Three: PHV vehicle licences for each car.

They’re all on top of your full GB, Northern Ireland or EU driving licence, which every driver must have held for at least one year.

You apply for all your PHV licences from your local authority. The exact rules vary, and may involve medical examinations, driving tests, or a test of the local area (different to The Knowledge, which is a specific test of London’s streets if you want to be a black cab driver).

You will also need to prove you and your drivers are ‘fit and proper’, which is likely to entail an enhanced criminal records check.

Decide whether you want to operate minicabs, which need to be booked, or hackney carriages, which can be hailed on the street or wait at ranks.

If it’s the latter, operating rules are stricter, and each local authority around the country will issue only a certain number of licences. Check that one is available before you invest in your vehicle.


Carry out your market research

Minibus taxi travelling at speed

In many areas, taxi driving is a pretty jammed market. Fixed costs – the vehicles, taxi fleet insurance and licences – can all add up, so make sure your cars will be bringing in the cash, not just stuck at the roadside or rank.

Think carefully about whether your area needs more cabs. And if it’s looking pretty cab-heavy on the roads, explore whether there are any gaps in the market: either geographically, or dealing with a particular type of customer or run.


Offer something different

In many areas, Uber and other apps have sewn up the market for cheap rides. So how do you compete? The answer is to be bold, be different and offer something new.

Perhaps you could specialise in airports or out-of-town locations?

Maybe you have the patience to do school runs? Could you offer lifts to hospitals? How about providing your services to groups or care homes?

Would you be willing to invest in adapted cars and staff training to provide lifts for people with disabilities?

If you are a woman, or employ women drivers, you could well be in demand from lone female passengers.


Do your marketing

Whatever your business model, you need to advertise. There are many ways to go about it, depending on your target market.

A catchy name and logo could help; invest in a good designer. Social media is often useful, particularly if you can build up a loyal following. Delivering business cards is time consuming but still effective.

If you’re offering a more corporate service, try getting on board with local businesses.

Don’t forget: nothing beats word-of-mouth. If you start to get a reputation for friendly, competent, reliable service, your business will accelerate. 


Get the right fleet

Driver holding key up in front of steering wheel of new car

As a prospective taxi firm owner, you probably love cars. So you’re likely to be in your element choosing your vehicles.

You’re sure to have seen models such as the Toyota Prius, Mercedes E-Class, Skoda Octavia, and Skoda Superb on the road – they’re all popular choices for taxis, and for good reasons.

But before you invest in your dream set of wheels, check it really is the right one to get your business motoring smoothly.

Your local authority will have rules you must follow, particularly if you are operating a hackney carriage firm. Bristol City Council, for example, insists that hackney carriages are Ultra Low Emission Vehicles and are wheelchair accessible.

Your vehicles must, of course, be good quality and pass safety tests.

If you are offering a specialist service, you may need to take that into account: i.e. a minibus or MPV if you are offering lifts for groups.

You’ll also want to consider the costs of fuel, taxation and insurance for different models, as well as comfort and reliability.

Don’t forget: you or your drivers will be spending a long time in these cars. They need to be enjoyable to drive, comfortable to sit in, and adjustable to different drivers’ needs.

Your vehicles are your biggest outlay, so you might prefer to lease a fleet rather than buy one. You can also operate a firm in which drivers provide their own vehicles.

Check out the taxi fleet insurance costs to aid your decision.


Employing the right staff

Your taxi drivers must meet the legal requirements to get a licence. But to be a successful taxi firm, they need to go above and beyond, especially if you’re operating outside of London where you may pick up more repeat business.

Are they prepared to work the hours you need: evenings, nights, weekends and bank holidays?

Do they have the right qualities and skills? Are they patient, good-humoured, polite and knowledgeable about the local area? Will they enjoy the company of their passengers – and be able to deal with the difficult ones?

The pay is decent: up to around £30,000 according to job site Indeed. But drivers will have to work for it.

And don’t forget about office staff too, who will need to be competent and unflappable enough to field calls for hours on a busy Friday night.


Get the backroom basics right

It’s not just about cars. This is a business you’re driving.

You need to think about where you’re operating it from: home or an office? What are the insurance and rates implications of each?

How will you take payments? The days of stopping at cash machines are fading fast: you’ll need to invest in card readers and digital payment options to keep your customers happy.

Payroll, bookkeeping, tax, taxi fleet insurance – there’s a lot of admin needed to keep your taxi firm running smoothly.


Get the right taxi fleet insurance

There’s one area that doesn’t need to be complex: getting the right taxi fleet insurance.

Taxi Insurer will compare quotes from different providers to find you the perfect policy for two or more vehicles.

Limited or unlimited mileage options are available, as is cover for a mixed fleet of both hackney carriages and minicabs. 

Whatever your needs, we can point you in the right direction of taxi fleet insurance and get your business up and running as soon as possible.