As with much to do with the taxi industry, where you live and what sector you are working in (black cab or private hire) greatly affects the costs involved in setting up your own firm. You should contact your council to get exact figures, although there are some solid estimates that you can work from.
The Disability Discrimination Act requires black cabs have to include wheelchair access and induction loops for the hard of hearing, and it could cost you several thousand pounds to modify second hand black cabs to keep up with newer rules. Brand new cabs cost dearly, and you can expect to pay a little bit more for an automatic.
Taximeters are obligatory for Hackney Carriages and cost a few hundred pounds, although it is possible to rent them out on a monthly or yearly basis.
As well as the cost of a license, drivers also have to pay for an additional driving test and area knowledge test – again, these costs vary according to the licensing body. The outlay doesn’t stop there – a medical examination will need to be factored in as well.
As with Hackney Carriages, the costs of getting your private hire fleet on the road will vary depending on which licensing authority you are dealing with. Bear in mind, however, if you plan to sit at the controls of a reasonably-sized fleet of cars, you will need to pay for operator, driver and vehicle licenses before you can get your Certificate of Compliance from the council, which allows you to start taking bookings.
A private hire operator’s license costs a few hundred pounds, while a license for your vehicle will can be a couple of hundred. A license for your drivers will need to be paid for too.
Meters are not compulsory for private hire cars, but if you choose to use one, they must be checked and sealed by your local council.
Although it should be fairly uncomplicated to get a driver and operator license, great care should be taken over selecting the correct vehicle when applying for the vehicle license.
Customers will expect your cars to be clean, tidy and fairly spacious, so plastering your minicab firm’s telephone number on the side of a rusting Metro is not advisable. Take the age of the car into consideration too – not only is it difficult to get vehicles over ten years old insured, many licensing authorities are also setting age limits on private hire fleets.
Cheap, reliable, fairly new, second hand saloons are the therefore best bet when you are starting out, although tracking down such cars can be tricky. Visit car dealers in your area for an idea of the type of car is best for you and how much it will cost you, before you lodge your application with the council.
As mentioned earlier, insurance is an essential part in becoming an accepted and reputable private hire business. Cars, drivers and third parties (i.e. passengers) must be insured, with special private hire insurance available to minicab firms. It is also worth getting your operating centre (if it is not your house) and any equipment (radios, GPS systems etc.) insured too.
Cover usually extends to anything up to £5 million of damage, although policy prices, like any type of insurance, vary according to the provider.
There are several specialist taxi and private hire insurers, such as Taxielite - www.taxielite.co.uk/londontaxi.htm and Insurance Line – www.insurance-line.co.uk.
Most of the major insurance providers cover private hire cars, as well as the people that drive them, so shop around to get the best deal for your business.
Most entrepreneurs setting up their own private hire firm tend to operate out of their homes to begin with. Nationally accepted regulations state you must identify an “operating centre” - this can be any building you like as long as it conforms to health and safety rules and has all the appropriate licenses for equipment. Some authorities send inspectors to the property as a part of rubber-stamping your application.
If you are able to afford premises to become your operating centre, make sure it is close to where your main customer base resides.
There are two reasons for this – if your cabs are operating in the countryside, the chances are that they will be using VHF frequency for their radios, which is fine over long, straight lines, but isn’t so good when bouncing off buildings and going round corners. Therefore, barking instructions to minicabs that mainly operate in the Welsh valleys from an office in central Cardiff won’t help clear communication, to say the least.
Secondly, your operating centre should be easily accessible to customers who wish to walk in and make bookings, rather than call. As trade is brisk on Friday and Saturday nights, a private hire office in a town centre, close to pubs and nightclubs, will have a prime location to attract late night revellers, as well as passing customers during the day.
Of course, town centre property can be expensive, so have a close look for something that matches your budget, is in a good location and can serve your business’ needs.