Answering Your Questions: Independent Taxi Drivers

Hello Tom,

My name is Mitch and I will be graduating college pretty soon. I am interested in getting into the taxi business and I have a couple of questions that I hope you can answer. I have decided that I want to go my own route because it looks as if I can make more money by owning and operating my own cab.

What is the most effective way that cab drivers operate independently (on their own)? Do they usually rely on cab stands or does most of their business come from regular customers that the driver has established a relationship with? Is it more profitable to start a cab service in a smaller city, or larger cities?

I am living in Fargo, ND (population of about 150,000) right now and there are 3 major cab companies, and a couple of smaller owner/operator cabs in the city. I am trying to decide if it is better off to start here or in the city of Minneapolis. I have read articles about how there are already too many taxis in Minneapolis because the taxi medallion was lifted, and there is no longer a limit on how many cabs there can be. I would be open to starting anywhere in the U.S. really. Do you have any idea of where there is demand for taxis?

Thanks for reading this message, and I hope to hear back from you soon!

Respectfully yours,


It is true that most taxi drivers and taxi companies have no idea where the fares would come from. However, this is far from being the best way to operate a business.

The goal of business is to make money. Therefore, the ideal situation is when you wake up in the morning and know how much money you’ll make today.

To have a situation like this in the taxi business means building a customer base and having prearranged fares.
That’s what I teach my clients in my Inner Circle Newsletter, my trainings and coaching programs.

Think about it: would you prefer to sit and wait not knowing if the phone is going to ring OR have fares lined up and clients waiting and willing to pay you money?

Regarding the question about smaller or large cities. There’s no one answer. How are the taxi services doing in your city? Are the customers happy? Is there need for more taxis?

You always want to start with a NEED. Too many people go into business because they feel like going into business. That’s not the smart way to go. The smart way to go into business is because there’s a NEED for what you’ll be doing so that, again, you won’t be a sitting duck waiting for fares, but a busy taxi company.

In life it’s a lot about who you know. Many people say it in a negative way, but it doesn’t have to be negative. Go meet people. Make connections. Network.

Here’s an example. Recently I had a client in a situation similar to yours. A middle-aged woman who decided to open her own taxi service. One of my first questions to her was: who do you know?

Turned out, a few of her girlfriends were spa-salon owners. I immediately started asking her: tell me more about the clientele in these salons? Who are the customers? How do they get to and from spa salons? Turned out that the customers were women (no surprise here) who would love to have a reliable taxi take them to and from spa.

My client talked to her friends and made several partnership agreements with spa salon owners. Several of them decided to introduce a Preferred Client Service, where a taxi would pick up the client at home, take them to the spa and then take them back.

That’s predictable business. That’s what you want. And all of this happened even BEFORE my client invested any money into her taxi company. That’s the way to go.

Regarding your willingness to relocate. Where would you like to live? Do you have a preference? You do not want to tie yourself to a town/area that you hate. Do you have any preferences? Favorite states/cities?

6 Responses to “Answering Your Questions: Independent Taxi Drivers”

Read below or add a comment...

  1. Mitch says:

    Thanks for the info Tom. My choices for places to drive would ideally be Minneapolis, Chicago, or Toronto. I’m from Minneapolis, so I know that area really well. As for building a network, I would already have a decent client base In Fargo, ND because I know of people who need rides from the bars every Friday and Saturday. However, that would only be 2 days out of the week for this occasion. Since the public transportation system here is poor, people get around by driving so they do not need taxis during the week. They are only needed when they are out drinking at the bars. I wouldn’t mind driving in Fargo, but I favor the above locations that I mentioned.

    Otherwise, it seems as if most of the taxi companies here get there fares by waiting at the airport to pick up those in need of a ride.

  2. Kay Clark says:

    I would like to know how you have drivers – besides yourself – and call and pay them as Independent Contractors? I have been notified that I have misclassified my drivers as Independent when the State of Iowa says they are my employees. And now they have tacked all these fines on me that I am now going out of business.

    Thank you for your time answering this question.
    Kay Clark

  3. Vinny says:

    Hello Tom,
    Would you please advise me what should I do to become independent taxi drivers as on my own in Orange County of California?

    • Tom Terrance says:

      This is not something we can help you with. Try your local City Hall, they should have the info

  4. vishwanathan Srinivasan says:

    Hai I want to be an independent contractor by riding my own taxi. How can you advise me. Give me the website please.

Leave A Comment...