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Running a Taxi Fleet

Posted by Francis Isberto | Labels: | Posted On Tuesday, December 8, 2009 at 6:38 AM




What is a Taxi? A Taxi or a Taxicab is a type of vehicle for hire with a driver. A taxicab conveys passengers between locations of their choice. In New York, you will see a yellow taxicabs piled in one line stuck in a traffic jam. In Mexico, you will notice the "Vochos" (green Volkswagen taxi beetles).
In Hong Kong, the red taxicabs is the most familiar one. And in the Philippines, where the most common is the white sedan.

So how do you operate a Taxi or a Taxi Fleet? First off is you should choose which the type of car will you use. Normally the top Japanese car models are the best (Toyota, Mitsubishi, Nissan). Their resale value is better than other Korean car models and passengers would prefer riding in a Japanese car model for no reason at all.
Toyota has the best economical spare parts and the availability is almost everywhere. So I suggest get a Toyota Vios. It is not that expensive, it's fuel efficient (1.3 L), and has good leg room and ample space.

Getting a brand new car for a taxi is much better than buying a 2nd hand taxicab. It will cost you big at first but will save you money in the long run because 2nd hand cars will require more maintenance and gas consumptions is way of the chart. I advised you get a 2-3 year old car and convert it to a taxicab. This will save you around Php 100,000 - 200,000. That amount can be used for getting a franchise.

Next is the permits and licenses. Get a taxi franchise from LTFRB (Land Transportation and Franchising Regulatory Board)

Then the most important part.... looking for a driver. This is the most common problem of a taxi operator. There are only a few taxi drivers that are trust worthy and reliable. I suggest you hire somebody that you know. A distant relative in your province who needs a steady job or maybe the husband of your child's yaya. Give your driver a good share so that he will stay longer and he will treat your vehicle with proper care.

Taxi is a lucrative business if your drivers are well experience in driving cabs and knows the in and outs of metro manila. Normally the boundary is Php 1,300 a day. That is what the owner gets. The rest of the gross income will go to the driver. Gasoline expense is generally covered by your driver. So minus the number-coding scheme, your taxi cab will be on the streets for 6 days in a week which can accumulate up to Php 7,800 a week or Php 31,200 a month.
That is gross income. You still have to pay taxes and leave allowance for maintenance like tires and batteries.

Here are some tips to save your taxi business money by lowering the operating cost:

1.) Get a trusted mechanic and electrician to fix all mechanical and electrical repairs. Remember that your taxicab runs almost 24/7 and will wear out for the everyday use. You need to take care of your car. You will lose money if your taxicab is not running. You need your taxicab to be in good running condition to reach your target income.

2.) Get a smaller engine car (1.3 L) or install an LPG on your taxicab to save on gasoline expense. This will help your taxi driver to reach the boundary faster and will take care of your vehicle better.

3.) Start first with one unit. Get the feel of it. Know all the problems them expand by acquiring more units. It's not practical to only have one. What if your only one unit was smashed by a truck. Your taxi business will die immediately. You need a few more units to cover the expense of the smashed taxicab. 20-30 taxicab units will be feasible.

4.) Get a good and reliable source of tires, batteries, spare parts for your units. Befriend with your source and get a good price. Buy in volume if you have to.

5.) Give incentives and bonus to your drivers. Remember that your drivers not your vehicles runs the show. Discontented drivers will just leave your vehicle out of nowhere giving you all the problems. Take good care of your drivers. Your income will be steady if you keep your drivers happy.

But the most important of all, be "hands-on". Just like in every business you should be on top of things. You presence and dedication to the taxi business will give you success.

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