Getting the right equipment and licenses doesn’t provide a guarantee that your private hire firm will be successful – your whole enterprise can survive or fail due to public perception, so it’s essential that you get this right.
Taxi firms rarely get involved with advertising campaigns that stretch beyond a curt mention in the Yellow Pages, so it is important that ‘word of mouth’ is on your side. Research shows that most customers make their judgement on a minicab firm after just one journey, so it’s vital that you make this experience an efficient, comfortable and wallet-friendly one.
Even if you are operating just two cars from out of a cramped spare bedroom in your house, if your drivers make a good impression, you could see a loyal customer base build up, thus boosting your profits and leading to an expansion of the business.
Try to ensure that your cars are clean and tidy – a valet service is often worth the expense. Smoking policies vary across minicab firms, but your first thought should be to make the customer feel comfortable and relaxed – so don’t hinder yourself by turning away valuable custom, even if they prefer to smoke.
Factors such as turning up promptly, treating the customer with courtesy and having a competitive pricing policy is vital in building up repeat customers.
Margins can be tight, with seemingly endless overheads such as petrol and insurance and license renewal, but with a growing market, putting in the effort for even the smallest detail of customer care is worth it to help you get decent returns for your investment.
Customers can be both corporate or private, with taxi firms now catering for both needs to cover a broad a range of the market as possible.
Many private hire companies have agreements with medium to large businesses who want to provide a transport service for their staff. This can provide your firm with regular and secure work, with contracts often being in place for a number of years.
However, the decision to get involved with ferrying a company’s workers around shouldn’t be taken lightly. If payment to your firm is monthly, or even longer, this could provide you with some serious cash flow problems if you do not supplement your contracted work with enough regular bookings.
Therefore, if your business is in it’s infancy, it is best to wait until it is large enough until you take on corporate contacts as well as regular customers. Many cab companies get the best of both worlds, leading to significant profits.
Make sure you work out a strategy before you take on your taxi firm. Try and look for gaps in the market – for example, if you live near an airport, are there enough cabs offering transportation for the passengers? Other potentially lucrative avenues can be school runs, wedding hire and transport to pubs and clubs. Do proper market research into what’s needed and your battle to make your business a success will be much easier.
With several taxi firms jostling for supremacy in any one area, competition is inevitably high in the industry. New operators will often find themselves subjected to aggressive tactics by other firms, such as price undercutting. With Hackney Carriage price rates set by the council, private hire firms can operate a cheaper service, sometimes leading to a “them and us” animosity between the two sectors.
Advertising is usually best focused on your local area and the Yellow Pages, with larger, eye-catching adverts worth the expense for a newcomer to the market. However, although you can advertise yourself wherever you like, it’s worth remembering that only black cabs are allowed to carry advertising and sponsorship on the sides of their cars.
Generally, if you operate your firm in an efficient, fair manner, you should see the results in terms of customer numbers, without having to resort to underhand tactics.