Michelle HammondFollow on twitter www.startupsmart.com.au
Taxis and private hire vehicles offer a valuable service to people who require transport to and from any number of places, including work, airports and parties.
Taxi services are particularly valuable to less mobile groups in the community, such as the elderly and disabled people.
It is therefore important that such services are efficiently provided, meet users’ needs and are appropriately priced. StartupSmart takes to the streets to see what’s required to start up in the industry.
What is it and who is it suited to?
Although taxi companies and car rental companies serve the same purpose, there are some significant differences. For example, taxis are able to pick up people off the street without a prior booking. They are also valued for their 24-hour availability.
Car rentals, on the other hand, generally require a prior booking when picking up passengers.
Secondly, many private hire drivers are self-employed, whereas taxi drivers usually work for a company, so if you want to work solo, consider becoming a private hire driver.
The Australian Taxi Drivers Association rightly points out that passengers are your only source of income, and the service provided is your only product. It’s therefore important to have good people skills.
Rules and regulations
The regulation of taxis generally encompasses quality and safety, as well as taxi numbers and fares. Across Australia, the nature of taxi markets, and the form and extent of regulation, varies significantly.
It’s therefore worth joining the Australian Taxi Industry Association, formed by state and territory-based associations to represent the industry on national issues.
Since its formation, the ATIA has been an effective voice articulating the industry’s position and working with the Federal Government and its agencies to find workable solutions to legislative, regulatory and policy matters.
The ATIA’s executive members meet regularly to discuss issues and opportunities, and hold an annual conference to brief the industry on progress and outcomes.
Items on the agenda for 2011/12 include changes to Australian road rules, taxation issues and environmentally sustainable transport.
Research and competition
With regard to private hire firms, most entrepreneurs tend to operate out of their homes, at least to begin with.
If you are able to afford business premises, make sure they are close to where your main customer base resides. Your operating centre should be easily accessible to customers who wish to walk in and make bookings, rather than call.
As trade heats up on Friday and Saturday nights, an office in a town centre – close to pubs and nightclubs – is a prime location to attract late night revelers, as well as passing customers during the day.
Costs and earnings
If you plan to sit at the controls of a reasonably-sized fleet of cars, you will need to pay for operator, driver and vehicle licenses before you can take bookings.
Although it should be fairly uncomplicated to get a driver and operator license, great care should be taken over selecting the correct vehicle when applying for the vehicle license.
Customers will expect your vehicles to be clean, tidy and fairly spacious, so plastering your company’s telephone number on the side of a rusting car is not advisable.
Take the age of the car into consideration too. Not only is it difficult to get vehicles over ten years old insured, many licensing authorities are also setting age limits on private hire fleets.
Insurance is an essential part in becoming an accepted and reputable private hire business. Cars, drivers and third parties must be insured.
For taxi companies, the expenses will not end with buying a few cars and hiring a couple of drivers. Modern cab companies have state-of-the-art radio equipment, with many splashing out on new technology such as GPS.
It is also worth getting your operating centre and any equipment (radios, GPS systems, etc.) insured too.
The ATDA says if you work the unregulated hours that are available, you can make up to $1,000 a week, but “if you want a family, a life and to drive safely, you earn about $120 a day, [on] average.”
An average day
According to the ATDA, taxi drivers pick up about 30 passengers during the course of what is generally a 12-hour shift.
“Taxi driving is a great start for new workplace entry, and for many it’s the only exit choice after displacement from ‘regular’ work,” the association says.
“For some, it does become a career. For perhaps most, they are only driving in between having a proper job. Only one quarter of drivers can ever be owner-drivers – three quarters will always remain bailee drivers.”
Australian Taxi Drivers Association
Australian Taxi Industry Association
07 3847 3711
Australian Government Small Business Support Line
1800 777 275
Australian Chamber of Commerce and Industry
02 6273 2311
03 9668 9950