Set Up a Private Transportation Services Business in the UK
A concise road map from 3E Accounting on how to set up a private transportation services business in the UK.
Transportation has come a long way from the pony or horse-drawn carts used in the olden days. Technological evolution has now digitalised transportation with such industry disruptors as e-hailing, on-demand rides, shared rides, etc. Private transportation as a business can be quite lucrative for the discerning entrepreneur. Wondering how to set up a private transportation services business in the UK? Here are a few insights to get you started on your road trip of business success.
Accelerating on the Road to Success
As of the end of 2020, there were 38.8 million registered vehicles in the United Kingdom. Statistics indicate that daily travel is dominated by car use (61%), and 16.7 million people either drive or get a lift. The taxi and private hire vehicle (PHV) industry had a pre-pandemic revenue of GBP9 billion.
Private transportation in the UK is primarily categorised as taxis (black cabs or hackney carriages) or PHVs. Taxis are highly regulated; the local authorities control fares and the number of taxis. While taxis are allowed to trawl the streets looking for fares, PHVs are not. They require prior bookings before picking up their customers.
While most taxis of PHVs are self-employed, this does not mean you must operate as a sole trader. Options such as partnerships, limited companies or limited liability partnership (LLP) will also work. It will all depend on your budget, the type of service, your location of work, insurance, and your commitment.
A well-written business plan with market and competition research will indicate what works best for you. Consider if it will be better for you to niche, such as private city rides, school runs, etc. If your start-up capital indicates you have the budget for it, you may wish to operate as a fleet. In this case, you may need to invest in fleet management software, etc. Website, logo design and branding will play a key role here.
These considerations should guide you in choosing the right structure for your business. Once done, you will need to register with HMRC for taxes. It should be noted that eligibility for VAT, insurance, and capital allowance is also available. Besides opening a bank account, you will also need secure e-payment gateways to make payment more convenient for your customers.
Location – i.e., inside or outside London – also matters as it will affect your licencing and registration. Licencing inside London is handled by Transport for London (TfL), while the local authorities govern approvals outside London. All private transportation businesses are also required to have an operating centre. This may require you to own or lease physical premises.
Further, you or your drivers will also need a valid driving licence. The UK Government website has plenty of information and guidance on approvals needed for the transport business. These include:
- Vehicle operator licenses
- Taxi licence
- Private transportation licences (inside and outside London)
- Radio licence from Ofcom
If this business idea gets your motor running, get in touch with 3E Accounting. We offer in-depth guidance on how to set up a private transportation services business in the UK. Our company formation packages and solutions are both customisable and flexible. All our services are fully digitalised, providing only the very best solutions, all delivered with impeccable professionalism. Contact 3E Accounting today to get your business future-ready.