3 tips for starting a cab company

Cab companies are always in high demand. This is one of the few businesses that never seems to fall out of fashion, and there will always be a time that passengers need to be picked up. Drivers are usually easy to come by, so starting a cab firm can seem like an easy decision. It’s more difficult than many people imagine, though, so here are some tips to help.

#1 Train the drivers

It’s false to assume that anybody who holds a driving license is capable of being a cab driver. Driving a cab means spending a long time on the road. As such, drivers are more prone to accidents, and only the best should apply. One way to solve this problem is to encourage any prospective drivers to take a driver training program. This will vastly increase their skills on the road and make them less susceptible to accidents.

Some accidents, of course, are the fault of other road users, but properly trained drivers are more capable of navigating difficult situations. Crashes can have a big impact on your company. Not only do they cost money (both via repairs and increased insurance payments), but they undermine customer confidence.

#2 Investigate the competition

Cab driving is a crowded field with a lot of competition. That doesn’t just come from local firms, but large ride-hailing apps like Uber and Ola, which have increasingly come to dominate in recent times. Researching the competition doesn’t just mean looking at how many rivals you have. The aim is to find an edge that gives you an advantage over these rivals. In essence, you need to work out why customers should choose you over the competition.

There are lots of ways that you might be able to find this edge. Offering an app that allows customers to track the progress of their rides is a big advantage. Some cab firms branch out into delivering food; others offer a loyalty program that rewards customers with free trips if they collect enough miles.

#3 Get fleet size right

Fleet size is a delicate balance. Too many cars, and you’ll find yourself overstretched, paying for the insurance and upkeep on vehicles kept off the road for long periods of time. Even one car is a drain on finances. Aside from insurance, a car needs to be fully taxed, fueled, and kept clean, all of which is a waste of time and money if there aren’t any passengers to pick up. Operating too few cars causes just as many problems. A small fleet makes it hard to expand, and you might find yourself unable to meet demand during surge times like the weekend.

Finding the right balance means starting small and expanding. Small but trusted local firms are well placed on building their customer bases over time, adding more cars to their fleet when necessary. Rather than entering the market with a massive fleet, work on building a brand identity. Be guided by how many passengers you carry and expand accordingly.