As a taxi operator you have many outgoings in order to run your fleet. And, just like any other business, the higher your costs the lower your profit will be. Which makes lowering costs a high priority – but which costs should you target?
All vehicles need to have the right type of insurance for the use to which they are put. As a taxi operator you will need insurance for each taxi in your fleet that covers it being used for private hire or as a taxi and that can prove pricey. Some taxi firms hire self-employed drivers who get their own insurance. For example Uber drivers get their own Uber insurance policy.
An alternative choice, if you have multiple cars in your company, is to take out a taxi fleet insurance policy. This would cover all cars run by your business whilst being used on your time. Make sure that it covers the right type of work – if you run minicabs that are only bookable through the operator you will need private hire fleet insurance whereas if your fleet contains hailable taxis then you will need to ensure they are included or covered by a more suitable policy.
Buying a second-hand taxi might look like a cheap way to get into the taxi market but it may have high mileage and be inefficient leading to high fuel costs. Keeping your fleet young will help maximise fuel economy.
It’s not just fuel that costs more for an older vehicle – they may be less reliable and every minute your car spends in the garage instead of on the road will be costing you money. Choose reliable marques and keep to the service schedule. Regular servicing is very important, especially when you have a fleet.
4. Be picky about your drivers
Your private hire fleet insurance will be based on the drivers you employ, so it pays to be choosy when hiring new drivers. Making sure they are over 25, have held their driving licence for several years and have no points will help to keep those premiums down.
The traditional black cab driver finds customers by knowing their customer’s habits and ensuring they are in the right place at the right time. Minicabs don’t have it quite so easy on the marketing front and need to spend something to attract bookings. Consider deploying an Uber-style app that allows customers to book a ride from their phone thus ensuring they book it with you – rather than Uber!
With all these costs cut, you’ll soon see a difference to your bottom line, so why not give it a go?