How to Start a Taxi Business With Low Investment

MobyteLab Post   •   Feb 17, 2020

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The taxi business has made life and transportation easier with the introduction of the taxi cab hailing system. The taxi business has displayed significant growth, increase and tremendous advancement over the past few years especially with the introduction of the taxi management software. This business sector with the amount of attention it has amassed is now considered as a promising line of work and an adequately successful business venture. Now, many entrepreneurs, investors, and business enthusiasts regard the taxi business sector as one that is capable of earning them profit and huge returns on their investment.

Big businesses always start small and one doesn’t have to be a million-dollar entity to start up a taxi business. The taxi business entails providing a means by which individuals can move from one place to another and the present day taxi cab hailing system offers this service by creating a friendly business environment while exploiting technology.

This article offers you insight on how to start up a business in the taxi business sector with low investment.

Find out more How to Make Your Taxi Business Beat the Competition, click here.


As opposed to the practice of the old where there was only one established way of getting a taxi, which entailed standing by the roadside and looking out for taxi cars, the taxi cab hailing system has evolved and there are other ways by which a person can hail a ride. If you’re looking to start up a business, you can either choose to go into one of these categories;

  • One Taxi plan: If you are an entrepreneur looking to start up a business in the taxicab business sector, this proves to be the easiest and cheapest way of gaining entry into the world of taxi business. You can either use your car or purchase a vehicle and all you have to be concerned about with this plan is getting a good insurance plan and cost of maintenance. It is easier to monitor and control the activities of one car as opposed to managing a fleet of cars. You can be your employer and employee at the same time with this business plan. This plan also gives you work from home advantage. One taxi plan is the cheapest of both plans and the only investment it requires is in car purchase and car maintenance if you don’t have a car you want to use.
  • Multiple Taxi plan: This plan involves employing man labor in the form of trained and qualified drivers and it requires adequate monitoring and control but it is achievable. This system requires getting more than one car under your brand, efficient monitoring and control of the dispatch and availability of vehicles. If you are looking to take up this plan, rather than purchase a fleet of cars which will take up a lot of money, you can gather other car owners and potential drivers through adequate publicity, and successfully convince them to get registered under your brand by simply offering them a higher percentage or share in the business. This way, you are saving costs and maximizing profit.


The world of today depends greatly on technology and mobile app developers have taken advantage of this development. Apps have now been introduced into the Taxi business sector. Riders, drivers, and dispatchers now have a seamless channel that allows communication through the use of taxi management software. Apps have been made available for smartphones and riders can now directly interact with drivers by booking rides online and getting notified about available drivers.

To confirm and be in line with the current trends of the taxicab business sector, you have to employ the use of taxi management software. This software allows efficient monitoring of a business and it is also an important tool for entrepreneurs looking to go into the multiple cab business plan. The taxi management software will help you monitor vehicles registered under your brand, track dispatch, access and analyze ride information. The taxi management software can help you save time that would have been put into manually handling the business. Time is money, so the taxi management software saves time. You can spend money on one single software (taxi app) that will take care of managing and controlling the fleet and the business rather than spend a lot of money employing others to oversee some of the activities, this way you can save cost.

Find out more Understand and Optimizing the Customer Experience with Taxi Management Software, click here.


Every successful business venture has risks and it is important to look out for these problems to avoid the downfall of the business. Some of the major issues to look out for when starting a taxi business are;

  • COMPETITION: For a booming and highly profitable business sector, there is bound to be competition and it is import that you distinguish yourself and your brand in a way that can make you rise above all competitions. You can either create something unique to your brand or develop an already existing feature to make you different from the others. A few ways of dealing with competition involves understanding and evaluating your competitors by figuring out their strengths and weaknesses and building on them, understanding your customers and their demands and also providing effective means of catering to their demands is key in beating the competition. Expanding your marketing scheme and using publicity channels to your advantage. Also, updating your brand image regularly, making sure to keep your existing customers satisfied and comfortable and increasing offers or proposing appealing deals to keep customers can also help you stay above the competition. Lastly, be the best employer you can be.
  • COST OF MAINTENANCE: Starting up a business is one hurdle that can be overcome with the right planning and a good business strategy but maintaining a business requires a lot of effort, which also involves money. A way to reduce the cost of maintenance is by setting up a maintenance agenda in the form of regular check-ups that is done by vehicle repair professionals. You should avoid waiting until serious damage has been done to your vehicle before seeking help or professional assistance. Also, getting an insurance plan can help reduce the cost of maintenance.
  • RISK OF BAD VEHICLES: Especially if you’re looking to go into the multiple taxi plan or planning to purchase a car for the One taxi plan, this is one important risk that needs great attention to avoid fatal consequences. When buying a car, it is important to check the car records and models to make sure it is suitable for use and will give minimal problems. It is okay to walk away from a seller not offering good products irrespective of the fact that the offer is an enticing one. You should note that client satisfaction and comfort is key and this should serve as a prerequisite for buying a vehicle. If you’re looking to take up the multiple business plans, car investigation, inspection, and constant supervision are important and essential. You should go over the car papers and documents and confirm its authenticity before registering any car under your brand to reduce the risk of taking in bad vehicles.


A taxi dispatch system is concerned with managing orders, monitoring dispatches, allocating resources (vehicles) and reviewing ride reports. A taxi dispatch solution is relevant in the taxi business. It helps you control your business with ease. It is the most useful and beneficial if you’re looking to take up the multiple taxi plan. An efficient taxi dispatch system should possess these features or qualities;

  • Effortless booking process: This is an important feature a taxi dispatch system should possess. A customer should be able to have easy access to apps that allow easy booking of rides, shows available rides and ride estimates after which the client proceeds to order a taxi and view details of the pickup taxi.
  • Safekeeping of Data: Data security and protection is another important feature. Both Customers and drivers should get a guarantee that any personal detail entered into the database is protected and preserved.
  • Dynamic dispatch system: If you choose to venture into the multiple business plans then this is one feature your taxi dispatch system should possess. The system should be able to handle an increase in the number of cars, drivers, and locations under the business.
  • Effective location-based system: The system should be able to travel any route and location as regards customers’ demand. The system can engage the use of GPS apps to locate clients’ destinations and view possible routes.
  • Easy payment process: This feature is important to promote clients’ ease and satisfaction. After ride completion, customers should be able to pay for their rides without any hassle or inconvenience. You can either employ the cash or card payment policy to facilitate an easy payment process.
  • Control and maintenance: You should be able to control and monitor the activities of your car or a fleet of cars under your brand. A taxi dispatch system should possess an effective way of monitoring the progress of the business by reviewing business activities from one place. Also, a taxi dispatch system should be able to provide you with information that can influence your decisions in choosing the right options.
  • Allow for reviews and ratings: Getting feedback from customers is a way of developing a business. Client reviews and ratings can help you know what they think about your business and also inform you about the areas for improvements. A taxi dispatch system should allow for customer reviews and ratings.


The Taxi app development is an area concerned with the interaction between drivers and customers in an online friendly environment of taxi apps. These apps are developed to cater to the needs of the customers and drivers. Customers log onto a taxi app and book rides, after which a list of nearby drivers available for pick up is displayed on the screen and the ride estimate is also shown. It connects the passengers with the closest available drivers and the driver is notified immediately. The customer proceeds to order a ride and view the car information and time of pick up. The customer is also notified by the app when the driver arrives at the pickup location.

After ride completion, the taximeter reads the cost of the ride and the customer proceeds to pay either through cash or card transactions. The taxi app development is an effective inclusion for the taxi business. A taxi app should be easy to use and also be easily accessible from any location and it should possess a user-friendly interface that allows good interaction between riders and drivers. Some of the features of a taxi app include;

  • The GPS or the vehicle tracking system, which allows the rider to know when the taxi would arrive and also helps the driver track the pickup location of the customer.
  • In-app payment feature and e-receipts, which allows riders to be able to make payments that do not involve cash exchange after which a receipt is sent to the email registered with the app.
  • Rate card: This feature helps the rider know the estimated cost of the trip before booking a ride and also calculates the total cost of the trip after drop off to prevent underpricing or overpricing from either side.
  • Review and rating: Customers can give their feedback and comment about the trip with this feature.
  • Availability of vehicles: This feature allows the rider to be assigned to another vehicle if a previously booked ride gets canceled.

It is advisable to seek the help of professional software developers who charge a fair price and equips your app with the required features it needs. If in need of these services, you can contact us.


All businesses start small before attaining a level of insurmountability. It is very possible to start up a business in the taxicab sector with the least possible amount and a small investment. If you’re looking to become an entrepreneur or a business owner in the taxicab business sector, it is important to have a friendly attitude for effective communication with clients, it is important to have good work ethics, a commendable business strategy and lastly, it is important to have a good vehicle/ vehicles to minimize risks.

Find out more Self-Building a Ride-Hailing System Vs Outsourcing: Which is Most Cost-Effective?, click here.


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