It is always a good idea to earn some extra income for yourself, or even go into full-time work, and becoming a taxi driver will always be one of the best options you have. A taxi is a small business opportunity with the potential to earn upwards of £40,000 annually if you are a full-time driver in the towns and cities across the country.
Still, as with any other business, you will be required to follow specific rules and regulations when starting as a taxi driver. Here are 8 things that you should consider before you ever pick up your first paying customer.
What Type of License Should You Choose?
The first step in getting licensed to operate a taxi is a full driving license, but in most instances, a taxi license is also required.
If you have a Private Hire License (PHV), a driver is allowed to pick up customers only from pre-arranged jobs, such as those booked via mobile app or over the phone. Drivers with the Public Hire License, on the other hand, are free to operate from designated ‘ranks’ in the area where they can either wait for customers or be ‘hailed’ customers on the street that they are driving on.
Will You Work with a Private Hire Company?
If you have a PHV, you can work with a Private Hire Company. It is where customers call the company or perhaps even use an app on their phone to book a taxi. The company subsequently distributes the bookings to the drivers that work for them. The driver to get the job is usually the one closest, but different companies will have different rules.
Drivers with a Public Hire License are also allowed to work for Private Hire companies while also utilizing their licenses to pick up passengers on the streets. However, not all jurisdictions allow this, which is why you need to first check with your local authority.
Find a Suitable Vehicle
Different jurisdictions have different rules regarding the types of vehicles that are allowed to operate as taxis in their area. Age and size are the two main criteria used.
Councils will often only allow vehicles less than ten years old to operate as taxis, sometimes less, and they will typically grant a taxi license to small, 2-door vehicles.
When it comes to choosing your vehicle, fuel consumption should be the primary concern. After all, a thirsty vehicle costs a lot of money to run and eat into your profits. Drivers are now using hybrid vehicles to help reduce fuel costs while increasing their profit margins on each journey.
Buy Specialist Taxi Insurance
You will require specialist taxi insurance as a taxi driver to ensure that you are fully covered in case of an accident. Taxi insurance offers coverage that’s similar to regular auto insurance. Still, it includes a ‘hire and reward’ component that pays out in case a passenger sustains injuries or his/her belongings damaged during a job.
You can visit a quote comparison website to learn more about taxi insurance. I compared taxi insurance and saved money, and it is always worth taking a look. Such websites compare prices across a wide range of insurance providers, and this means that you can find cheaper taxi insurance policies if you use their comparison service.
Are There Any Extra Qualifications Required?
Councils typically require drivers to pass a ‘knowledge’ test of the local area to be sure that they can efficiently get customers from one part of town to another. The tests can sometimes be rather demanding, even for those that have lived in a particular area their entire lives, which is why this is something you need to enquire about it.
Have You Consulted an Accountant?
If you choose the self-employment route, you will be required to complete your own income tax and insurance payments. You will also have several tax incentives at your disposal, with many drivers able to claim tax refunds on fuel used to operate, often to the value of thousands of dollars.
Taxi drivers can also be eligible for tax credits in their first years to help them get properly started with the business, so it can be a good idea to consult an accountant to find out what options are available to you.
Being a taxi driver can be quite financially rewarding and can give you the chance to start your own business. With some careful planning, virtually anybody can get the qualifications, vehicle, as well as taxi insurance required to become a taxi driver.