How To Start A Taxi Business In India? Taxi Business Ideas.

. 8 min read
How To Start A Taxi Business In India? Taxi Business Ideas.

Table of Contents:

1. How To Start A Taxi Business In India?

2. Having The Right Taxi Business Ideas

3. Steps & Requirements For A Taxi Business

4. How To Start A Taxi Business If you Can't Afford Too Many Vehicles?

Key Takeaways

1. How To Start A Taxi Business In India?

Having a taxi business in India can be very successful. Public transportation in most Indian cities is not convenient, with overcrowding and inadequate hygienic facilities being the most common problems. Hence, taxis can be in great demand. Most people can find it easier to access taxis than public buses in small towns. Like private vehicles, taxis can be better suited for individuals and families to travel across small distances in Indian towns.

To understand how to start a taxi business, you should be aware of the general ideas of a new business. Just like most businesses, you should begin with a good plan and structure for your business. Here are some of the essential steps that you can take to start a taxi business in India.

2. Having The Right Taxi Business Ideas

Having a taxi business plan would be incomplete without Taxi Business Requirements In India that would require you to get proper liabilities, cover business paperwork, set up a client base, and channelise the payments. There are different types of structures that you can take up. Having a sole proprietorship would mean that you would own all the resources in the line. You can also take the business as a partnership where all your assets and resources will be shared between different parties.

You can also go for a limited liability partnership where there will be a fixed time to share assets and resources. Or else, you can go for a private limited company which is opted for by tours and travel companies because there is more credibility. There is also a possibility of external funding in a private limited taxi company. You can use your networking skills to collect taxi drivers and unite them under your company by giving them a fixed stipend and achieving your goals.

yellow taxi in a que of taxis
Taxi Business Requirements In India

3. Steps & Requirements For A Taxi Business

To begin a taxi business in a small town in India, you should have a trustworthy team of taxi drivers who are well-qualified for their positions.

  • Managing finances is of top priority. If you go through the rules and regulations in the country, you can understand that opening a taxi business can be a hectic task if you don't already own the vehicles. The business expansion would require acquiring more cars which in turn can demand a business loan. Taking a business loan is an entirely different affair. Still, the bottom line is maintaining a good credit record and not running losses in the company to get your loan approved.
  • The commercial driving license must be issued by the regional authorities of the respective state or territory. Multiple criteria would have to be filled up by the candidates, including age requirements, educational qualifications, and proper training certificate from a Government Motor School.
  • The vehicle should be registered under the state's motor administration for use on roads. The vehicles should be properly tested from authorised testing stations in the state. There is no one best car for the taxi business- your vehicle should have all the parts functioning smoothly.
  • A fitness certificate is to be procured for the vehicle, which will be valid for use all over India. The vehicles should also be insured against third-party risk. This ensures the safety of the third-party riders involved in an accident caused by the owner or vehicle driver. It would help if you also insured the vehicles because they will become your source of livelihood.
  • Your company should also require import permits and certificates to be able to run taxis around. You should have the necessary license to transport goods and people in or around the local area. If the taxis have to travel outside the state, there should be a permit for that as well.
  • The usage of specific routes should be clarified according to the authority. The price and charges of the ride should also be fixed according to state guidelines. If any of the policies are not followed, the driver and the company's owner can be heavily penalised.
  • Various taxation norms would have to be followed for your taxi business. One should include the GST on the ride fare. Taxation policies should be well understood before beginning the taxi business.
  • One should also be careful of the environmental regulations in different states. For example- only CNG taxis are allowed to run in the city of Delhi. Similar regulations are to be followed concerning the emission of harmful wastes from the vehicle and its maintenance. Not following these rules can lead to legal crises for the company.

4. How To Start A Taxi Business If you Can't Afford Too Many Vehicles?

Cab aggregating has become a popular way to run a taxi business. This can be considered as much more scalable in most parts of India. The cab aggregators make a platform where the car drivers can register their cars to be a part of the business. The driver pays a fixed commission, and in turn, the platform helps the drivers to get more rides.

This system ensures low investment and maintenance by the taxi company. Most of the bookings are made online. The taxi business requirements in India runs advertisements to expand the network, reach out to customers and get important feedback to improve services.

This can be an excellent method for customers as well. They can get an easy platform where they can book rides on the spot and also give feedback. Complaints can also be shared regarding the cleanliness of the vehicle and the behaviour of the driver. Ratings and reviews can be recorded to ensure a better taxi network for everyone to use.

no of taxis parked in a que
Taxi Business Requirements In India

Key Takeaways

Just like most businesses, a taxi business ideas can be run on different models and schemes. The overall guiding principle should be the acquiring of assets or using the assets that are out there. A successful taxi business should invest in getting good drivers who are also well-mannered, good maintenance facilities for the vehicles, and achieve an excellent platform to record customer satisfaction. All the legal requirements should also be carefully noted and followed for a successful taxi business.

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Q. How can I get a loan for a taxi business?

Ans. Different banks in India offer their unique plans for drivers and taxi companies in India. Old vehicles and new vehicles can be acquired with different margins for the loan amounts. Depending on the amount you borrow, you may have to get collateral. Banks can be paid back using EMI and other options. One must get in touch with a bank agent to get all the exact specifics depending on your vehicle's exact requirement.

Q. What is a radio taxi?

Ans. The Motor Vehicle Act initiated a radio taxi scheme by various state governments of India. In this scheme, a taxi can be requested on call by specific phone numbers. The taxis can be designated on the spot or hired by stopping the cab on the road. These taxis cannot be booked online. Registered taxi companies can be a part of this scheme by obtaining essential permits and licenses provided by the State Transport Authority.

Q. How can taxi owners get an All India Permit?

Ans. An All India Permit can be acquired through the Transport Authority by applying with a legal fee. This is the All India Tourist Permit (AITP) which gives your vehicles the recognition of "Tourist Vehicle". They are mostly meant for tourists who are travelling inter-state and not the regular commuters. There should be proper registration of the vehicle and all the other certificates, just like any regular taxi.

Q. How can I innovate in the taxi business?

Ans. Since the taxi business is booming in India, one must innovate and develop new ideas to stand out in the market. You must have a good client base, and there are various ways that you can ensure that. You can consider offering discounts and extra coupons for regular clients. You may also offer discounts for clients who take fixed routes daily. You can use the best car for taxi business, that is the vehicles in best condition and are well maintained. This will add to the effectiveness and glamour quotient of your business. You can ensure better safety for vulnerable groups. There should be steps to increase safety for women and other marginalised sections of society. You can hire female drivers for women to feel safer as a USP of your business.