Setting Up a Small Private Hire Taxi Business

Setting Up a Small Private Hire Taxi Business

If you have been a private hire taxi driver for a while and can see a niche in the market for setting up a larger operation, what are the steps you need to take? If you have spotted a gap for a taxi fleet, make sure you have researched your market before sorting out your finances, think about the type of vehicles you will need, where you will operate from and the additional private hire taxi fleet insurance your business will want to put in place.

What links Burger King, General Motors, Microsoft and FedEx? Well, they all started their businesses in the midst of an economic recession and frankly they’re not doing too badly. In the UK the Centre for Entrepreneurs’ analysis, shows a record-breaking increase in start-ups with 572,882 companies launched in 2020 alone. New business formations in the first nine months of that year were 9.5 percent higher than the same period in 2019.

Could it be that this is the optimal time to look at starting a private taxi fleet? With low interest rates, a COVD vaccination programme in full swing and the prospect of lockdown restrictions easing by the summer, now could be the chance to get ahead of the curve with a private hire fleet, especially once the hospitality, events and weddings sectors scramble to fulfil lost time and revenue.

With rent to pay on business premises, vehicle finance packages to cover, plus the correct taxi fleet insurance to consider, it can be a daunting task for the unprepared.

Getting Started with Your Taxi Fleet

Before you begin anything, it’s worth undertaking some valuable market research on your business. Where will you locate it? Will you have a permanent base or be over multiple sites? What type of vehicles will you operate and is there a specific profile or demographic of customer that you want to target? Are you looking to sign a commercial contact with a local business or venue such as a care home or wedding location?

And don’t forget that if you are looking at expanding areas of your private hire taxi business into chauffeuring or as a courier, you may need additional insurance coverage. It’s always worth a quick call to your insurance broker who can advise you on the best solutions for your expanded business. 

Taxi fleet operators are rightly keen to find an insurance policy that provides cover for all elements of the risks they require without the premium prices. Therefore, it’s essential to get the right advice from an experienced taxi insurance broker to avoid purchasing additional cover that isn’t necessary. Liability insurance should be top of the list including both public and employers’ liability. It is also necessary to look at more practical requirements such as any named driver policies and cover for taxi offices and contents.

A private hire vehicle public liability insurance policy will protect you from claims made by third parties for injuries to the person, or damage to property caused as a result of your business activities. A typical policy will pay for the cost of putting right any damage or medical fees in the case of injuries and will also cover the legal costs representing your business, related expenses, and any damages your business is found to owe in relation to a claim. Employers’ liability is required by law and will protect you against employees making a claim for an injury because of a work accident or they fall sick.

You should also look at local roadside assistance and recovery as well as breakdown and windscreen cover as standard to make sure you keep your private hire taxi fleet business on the road.

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