Beginner’s Guide on Starting a Taxi Business in the United Kingdom

Starting a Taxi Business in the United KingdomThe demand for the transportation industry is very competitive, especially when technology is involved for the convenience of people. If you’re thinking of starting a taxi business, it’s important to generate firm and realistic details of your services. Anyone could book in a few steps.

Hence, if you want to indulge with this brand-new getaway, you could start with your business’s initial research and foundation: what’s your target market? Specifics in transport services? Hiring capacity? Equipment and relocation sites? And what about the employees and their licensing value? Here, we gather the practical prerequisites in founding your taxi business in the United Kingdom.


What Is a Taxi Business?

Taxi companies generally serve passengers by transporting them to locations of their choice. This type of business generates revenue by splitting fares with licensed drivers or leasing profit depending on the number of clients and overall earnings. It usually starts small but would eventually expand as you hire more drivers and extend the company’s range. Nevertheless, the taxi industry is way different compared to a decade ago. The emergence of apps has impacted a shift in service.

Additionally, it needs an unyielding business model. People just don’t go fares and book fare vehicles whenever they want to. You have to understand it needs double effort during peak holidays and the busiest days. Starting a taxi business is more than owning cabs and partnering with drivers; consider cab facilities and maintenance workflow that also needs to be operated.

Decide your niche and specific market. Potentially, you could operate within a city centre, giving you a wide range of passengers going to different locations. Such locations have hustling culture, and taxis are considered forms of convenience. It’s also interesting to cater only to students for transfer services. You could expand your horizons with the help of 3E Accounting.

Duties and Responsibilities

You would need to consider two types of taxis: licensed hackney cabs, where clients can hail from streets, and licensed private cabs for pre-booked appointments. Both are seemingly normal. Hence, you’re generally obliged to do the following:

  • Pick up and transport delivering passengers
  • Take the fastest and safe routes
  • Assist clients in loading and unloading stuff
  • Maintain cleanliness of vehicle inside as well as its externals
  • Usage of correct fare and accurate calculations

Arrival of Opportunities

Obviously, you would need to hire taxi drivers or employers in pursuit of your business. Note that you shouldn’t discriminate against potential employees based on their characteristics that wouldn’t affect the operations at all. Hence, this applies to drivers when picking up passengers. There have been many cases of microaggressions prevalent in the interview process itself. Give everyone equal chances.

Drivers’ Assessment and Qualifications

You might want to check out the qualifications of taxi drivers in the UK, whether a cab, private, or minicab hire. This ensures that your potential passengers and overall business operations are in the safe and right hands.

  • Submitted driving skills assessment
  • At least 18 years old (some sectors require 21)
  • Passed on the background and medical checks
  • UK or EU driving license (A full DVLA, Northern Ireland, and specific area state driving license)
  • Level 2 Certificate in Road Passenger Vehicle Driving (added value)
  • Level 2 Certificate in Introduction to the Role of the Professional Taxi and Private Hire Driver (added value)


Taxi Business Registration Process

Before we proceed with company registration in United Kingdom, determine first which type of taxi business you’re planning to operate. However, most businesses are registered as sole traders, partnerships, or limited companies.

Sole traders are merely responsible for their financing and some accounting duties. You run your business as an individual. Hence you keep all the taxes and are in charge of declaring guidelines. Note that some rules apply to operating a business. Contact us for a hands-free approach and experience working with professionals on a business scale.

Limited companies have separate finances, thus, have management obligations. Meanwhile, partnerships are simply having two or more business people handle the company operations. You share responsibilities. Here are the steps:

  1. Determine your taxi business structure
  2. Register company name
  3. Detail business information to the companies house (office, directors, and shareholders)
  4. Fill in company shares
  5. Submit Memorandum and Articles of Association

When starting a taxi business in the United Kingdom, you submit all the necessary documents and undergo a legal process. The procedure is indeed intimidating, as you could be held responsible for legal issues. A majority of businesspeople seek company incorporation services to ensure that their firm is valid and constitutional. You wouldn’t want to miss out on the regulations settled by the state.


Taxi Business License and Legal Compliance

Starting a taxi business requires you to comply with the Transport for London (TfL) or Passenger Transport Licensing Division (PTLD) of the Department for Infrastructure; it could also depend on your local authority’s issued guidance and conditions on the vehicle before obtaining a license. You might want to check on the following (depending on your location):

  • Taxi Drivers Assessment (Driver and Vehicle Standards Agency)
  • London Taxi and Private Hire (LTPH)
  • Passenger Transport Licensing Division (PTLD)
  • Taxi licensing section of the Driver and Vehicle Agency (DVA)

Note that local licensing permits restrict the number of operators (if applicable) you could hire, depending on your scale. Some don’t have the limit. Meanwhile, you ought to know the following duties and moral responsibilities to institute upon the management:

  • Smoking is banned in workplaces UK-wide, including taxis, for both drivers and passengers. Thus, it would be best if you put a “No Smoking” sign on the vehicles.
  • Comply with the employment, health, and fire safety legislation
    Insurances are also recommended in case of unforeseen circumstances.

There are various legislation and business processes that a founding firm must be compliant with. And you have to ensure your business operations are valid and legal. Hence, as a United Kingdom corporate service provider, we’re here to assist you with quality formation services as we understand how complicated establishing a company can be.

Starting a Taxi Business in the United Kingdom