How To Make A Taxi Business Profitable

Most taxi business owners see their taxi services as “just another taxi company” and here lies the root of all their problems. You can’t make money and be successful if you are “just another taxi company.” If you are like everybody else, you will be making same (ordinary, standard) money as everybody else. If you want to be more successful than an average taxi business owner, you need to stop being one of them.

How do you stop being one of those? You do so by being different. You look at what everybody else in the business is doing and do the opposite.

Most taxi companies provide “one size fits all” service to all of its customers. The owner of the taxi business fails to see and understand that he has several different groups of customers and that different customers have different needs. Hence, these customers need to be talked to differently, marketed to differently and serviced differently. In most of the cases when failing to see that, the taxi service owner advertises low price (because that’s all he knows) and attracts customers who want low price.

The problem with price buyers is that there’re never loyal to your taxi company. They are loyal only to low price. As soon as your competitor offers price lower than you, these price shoppers go to your competitor and you’ve lost a customer. If you want to attract low price shoppers, then, by all means advertise low price. But if you want to attract people who are willing to pay for the service they receive (so you can make money), don’t advertise price.

What should you advertise? Well, that depends on the type of customer. Customers of a taxi service can be divided into following groups:

1. Affluent customers. They want experience and exclusivity. Better cars. Better drivers. Drivers they can choose, be it because they want to have a conversation or not talk at all. Amenities in the car. On-time guarantee. A VIP number to call the service that is not advertised to the public.

Such customers don’t really care about the price. Sure, if you are “just another taxi company,” they’ll beat you up on price and demand a deal. If they do so, it means that you are failing to provide an experience they’ll cheerfully pay a premium for. If that’s the case, chances are you aren’t doing anything I have just described. You fail to provide an experience and then can’t figure out why someone with money turns into a cheapskate. 

2. Frequent business travelers. Since they travel a lot, they really value their time. To them the deciding factor when choosing a transportation provider is predictability. They want to be sure that you’ll be there and you’ll be there on time. Every time. Their travel is usually paid for by an expense account and if you are doing things right, they will have no problem paying a premium price for the service.    

3. Train station commuters. They don’t really care about the cars and/or drivers. They want you to be there on time and take them to the train station

4. Local rides. Some of them are taken by people who can afford their own car, yet choose not to have one. Some of the customers take a taxi because they can’t afford their own car. Usually they are very price sensitive and not loyal customers.

5. Senior citizens. Frequently they have canes/walkers/wheelchairs. They mostly get of the house during the daytime. They want attentive drivers who will let them take their time when getting in and out of the car, help them with their walker, etc. Don’t send a minivan to pick them up, because it’s extremely hard for them to get into the freaking thing. Make sure their walker/wheelchair will fit into the car.

6. Students. The cheapest possible customer you’ll ever get. Never loyal. Will be out of college at some point, so you can’t build long-term repeat business with them.

And, to name a few more:

7. Bar crowd. If you have a lot of bar crowd customers, you need to create special programs for them and make deals with your local bars
8. Hotels/convention centers.
9. Hospitals

Want to learn how to market properly to all these categories and make a ton of money? Get Your Copy of Tom Terrence’s Paperback Book “17 Critical Mistakes You Must Avoid That Can Ruin Your Taxi Business” today!

 

 

6 Responses to “How To Make A Taxi Business Profitable”

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  1. M. Sandhu says:

    This is great advice for anyone looking into starting a new taxi business. Although I am based in the United Kingdom I think the advice givn here would be very helpful here too. I have recently started my own minicab firm in the UK called Haydons Cars, we operate minicabs in Wimbledon in South West London. And I think I could greatly benefit from some of the advice in Tom’s book and will invest in a copy and see how it can help my business.

  2. john kweku says:

    Dear Sir,

    Please can you furnish me in full details about the standard of your products. I will appreciate it more if you can give me with detail specification. I am working as an accredited commission agent and I am looking for supplier whose products is of good quality as your products are among the need items which will be purchase in a large quantities. You can reach me for business opportunities for the supply of your products.

    Regards,
    Mr.John Kwaku
    Tel: (+233)246259336.

  3. simon says:

    Hello my name is simon from Massachusetts, I am thinking of opening a taxi service or buying a taxi service. But i know nothing about the business. Can you educate my on this field. like what i need or what to look out for?

    • Hi Simon, I’ve just stumbled across this site whilst researching something else and as a cab firm proprietor obviously found it very interesting. I was a little alarmed about your comment though and thought I should jot you a line. I’ve been in the trade for 9 years now having chose it as a way of making a living when my last company folded leaving me 300k out of pocket!!!

      DO SOME HOMEWORK AND UNDER NO CIRCUMSTANCES BUY A CAB UNTIL YOU HAVE DRIVEN FOR SOMEONE ELSE!!!

      I have 11 drivers in 9 vehicles and because we’re a busy circuit my commission drivers often make more than an owner. The overheads, fuel, insurance, maintenance and licensing etc oh, and finance is crippling for an owner. The net pre tax margin is approx 15% so with an average 1k pw turnover per vehicle you’ll need 4 of them before you make average wage… Either that or you’ll end up working your socks off and giving up most of your social life.

      Having said that, I truly love what I do for a living and I take a great deal of pride from the reputation we’re achieving. We’re in the service industry and nothing should be to much trouble for our customers, answer every telephone call especially when you have no availability, your competitors will be ignoring theirs, never make your customer your friend, call them Sir or Madam and retain a professional distance. If you run late call them in advance to let them know and make sure they save your telephone number as A1 the cabbie man, it will be the first one they see every time they open contacts. There are never problems, only solutions. Become dependable.

      I’ll happily talk to you more if you would like but DO NOT BE DELUDED ENOUGH TO THINK BEING A CABBIE WILL BE AN EASY LIVING. Be lucky

  4. Edward Small says:

    There are 20 cabs and four cab companies in this town and my company owns four of those cabs. I am going to buy this book and see what it does for my business. I’m not sure if his advice will be applicable to a market as small as this one but if it works I will be investing in more information from this site.

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