Starting a Taxi Business in India

Starting a Taxi Business in India is not a piece of cake anymore. Indian taxi market was attractive but it is not so attractive now, every tom dick & harry is now in this business. Anyone who doesn’t know anything can come in this line,  because of google maps, you don’t need to have any knowledge of roads.  

Still, in long run, this business will prove beneficial to those who can sustain because like any other business this business has too much competition. With big corporate to individual taxi owner each trying to exploit the market. You have to bear breakdown cost &  accidental cost. Have to handle manpower in the form of drivers and some rude customers too.

Type of Taxi Industry

When you are thinking of getting into the taxi business in India the first thing that you need to take care of is the selection of the type of taxis you are going to use. As the taxi line is having lots of branches such as Tourist taxi which is generally used for travelling outside the city, intracity cabs like ola & uber or taxi for corporate offices like a call centre. Each one has different requirement plus you can also opt for 4 seaters or 6 seater cab or a combination of both type of car in your fleet.

Fuel Choices

Regarding the type of fuel, I would suggest going for Petrol CNG because:

• Petrol only & Diesel fuel are too costly.
• Diesel engine permit for the commercial car is for 5 years only right now in Delhi NCR.
• Frequent change of laws for diesel taxi.
• Right now the difference between diesel and petrol price is not much, also a commercial petrol cum CNG car gets 10-year permit to compare to 5 years of diesel hence chances of earning is more in petrol CNG car.

Go for brand new car purchase only but always purchase car on loan, there are few benefits for this.

• Maintenance cost will be less of a new car.
• In case of an accident, your entire amount is not wiped out though you would get claim it takes time.
• It is easier to sell a car which is on loan as the down payment amount is low.
• You can pay the down payment of the car from the car itself.

Suppose you had a bank balance of 20 lacs for business then you can keep 10 lacs as a backup

and for other 10 lacs, you can buy at least 6 cars on EMI.

Avoid going for a used car as you don’t have any warranty on any parts and doesn’t matter how good a mechanic you go to he will not be able to diagnose a sleeping problem.

Now comes the most important component.

DRIVER

A driver is the captain of the ship, you have to acknowledge that and have to give him due respect for the same. But at the same time, you should make him accountable too. Do some research on how much salary is the norm in your area. Generally, the taxi line is very wide comprising of outstation, ola uber, call centre etc and each one has there own rule for salary.

You should also do accord with the driver. In case of any physical damage to the vehicle due to the accident, the driver alone will be responsible for any amount which is not covered in insurance. Generally, most of the expenses are covers by insurance. But still depending on case to case 5000 to 10000 rs is charged.  You also don’t get any “no claim” bonus too when you renew the insurance.

Regarding permits and all other stuff, you will be guided well by the vehicle seller.  They will charge a hefty commission in the name of delivering of various completed documents at your doorstep, which if you do by yourself will cost much cheaper but will cost you time.

GPS

You don’t need to have a large garage in order to park your taxi.  You can ask the driver to park the car in his backyard but do have GPS installed in them otherwise, the driver will take for a run. Get an online presence with the help of Google and local players like justdial, so that people can call your company up whenever they are in need of a taxi.

Another factor which plays a crucial role in this business pertains to the drivers. Make sure you do not get rash drivers but responsible and good ones because they are the ones who would be responsible for your taxis. So choose your taxi drivers wisely because they can make or break your taxi business in India.