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How to start a Mini Cab or
Private Car Hire Business


A taxi business is a potentially profitable venture that you can invest on particularly if you live in the city and there are plenty of people who need the services of cabs. The taxi business is also a good business idea especially nowadays that people are already acknowledging the advantages of using public transportation over driving their own cars.


Hackney Carriage taxis (black cabs) are able to pick up people off the street (flag down) without a prior booking. Mostly found in urban areas, black cabs are highly regulated, with fares controlled by local councils and numbers restricted by many local authorities.

Drivers of black cabs are essentially self-employed and have to go through rigorous checks and tests before they are awarded their license. Some Hackney Carriage operators form co-operatives and drive saloons and MPV's, However most Hackney drivers prefer the traditional London style MetroCab or TX1 and TX2 Vehicles made by LTI.

Private Hire

Private hire vehicles, or minicabs, have to have a prior booking when picking up passengers.

Minicab owners will be prosecuted if they are found touting their business or behaving like a Hackney or Taxi.

Most private hire drivers are self-employed owner drivers and pay a minicab company a circuit fee for taking the bookings and scheduling the work. The minicab operator charges for the call centre and in most instances they will probably rent the radios end even provide data terminals or PDA dispatch systems if they have computerized booking and dispatch software such as Cab Management System.

If you want to be self-employed and make profit on your own without having to pay minicab circuit fees, become a licensed black cab driver and go it alone. Some black cab owners form co-operatives where they team up with other drivers to increase profits and run operations much like a small business. There are quite a few cab companies in London, was built around a small fleet of black cabs. They now boast a fleet of over 4,500 taxis, taking around 20,000 bookings a day. They also have one of the most advanced computer booking and dispatch and data systems in the City, they can process credit cards and track their vehicles by GPS.

It is:

Rules and regulations:

There are over 400 council licensing authorities in the UK and as there is no central body the regulations for each council will vary according to their particular management style. There are however basic regulations that are common to all authorities.

Private hire car regulations

Minicabs have suffered a bad reputation in the past due to the previously unregulated nature of their work. Rogue drivers would pick up stray passengers and charge them extortionate prices or worse. It is estimated that at least one woman a week is raped in illegal minicabs in London alone, a shocking statistic which blights the good name of the industry.

Some manufacturers of taxi booking and dispatch systems have features such as Text back which ensures that just prior to the private hire vehicle arriving the passenger is informed by SMS the vehicle registration, description and driver name. These essential passenger personal safety features are likely to make you more popular with the female clients.

In 1998 The Private Hire Vehicles (London) Act, handed the responsibility of regulation of minicabs and private hire to the Public Carriage Office, which until then only looked after black cab licensing.

Minicab and private hire firms must now hold a private hire operator license before they can accept bookings - your company will not be able to trade without one. In order to get a license, you will have to prove that you are 'a fit and proper person'. Any criminal convictions, bankruptcy or breach of health and safety rules will count against you.

You should also prove you hold any relevant radio licensing or insurance documents and you must diligently ensure that your drivers vehicles and documents are in order. Some software packages will provide a comprehensive record of all friver and vehicle documentation and automatically lock drivers out if the documents have expired. For further information look at the Cab Management System.

Your home address can be your operating centre, a licensing officer may be sent to inspect the premises.

An application fee which runs for five years will be charged by the local authority.

Private hire cars are not required to have meters but may choose to install them. If they are installed they will have to prove they are compliant when the vehicle attends its regular road safety check 3 times a year, there is no restriction as to what a minicab or private hire operator can charge.

Except for exceptional circumstances the vehicles must be less than 5 years old. Drivers must have held a full EU driving license for 12 months, pass a medical and make a declaration in relation to any criminal convictions. In some areas, drivers have to pass a 'knowledge' test, similar to black cab licensees, in order to operate.

Hackney carriage (black cab) regulations

Useful contacts

Startup costs

As with much to do with the taxi industry, where you live and what sector you are working in (black cab or private hire) greatly affects the costs involved in setting up your own firm. You should contact your council to get exact figures, although there are some solid estimates that you can work from.

Hackney Carriage costs

From last year, the Disability act requires black cabs have to include wheelchair access and induction loops for the hard of hearing, although the timetable for compliance with the new regulations has been put back pending an announcement by the government.

Nevertheless, it could cost you several thousand pounds to modify second hand black cabs to keep up with the new rules. Brand new cabs currently cost £25,000 for a manual, £27,000 for an automatic. Taximeters are obligatory for Hackney Carriages and cost around £150-£300, although it is possible to rent them out on a monthly or yearly basis. As well as the cost of a license, drivers also have to pay for an additional driving test and area knowledge test - again, these costs vary according to the licensing body. The outlay doesn't stop there - a medical examination will cost you between £60 to £80 .

Private hire costs

As with Hackney Carriages, the costs of getting your private hire fleet on the road will vary depending on which licensing authority you are dealing with. You will need to pay for operator, driver and vehicle licenses before you can get your Certificate of Compliance from the council, which allows you to start taking bookings.

A private hire operator's license costs anything between £250-£300, while a license for your vehicle will range from £75 to £300. A license for your drivers will cost between £25 to £200.


You must be insured, cars, drivers and third parties (i.e. passengers) must be insured, with special private hire insurance available to minicab firms. It is also worth getting your operating centre (if it is not your house) and any equipment (radios, GPS, PDA's and computer booking and dispatch systems etc.) insured too.


This can be any building you like as long as it conforms to Health and safety and has all the appropriate licenses for equipment.

If you are going to be operating a VHF two way radio system try to choose a site that is on high ground so as to maximize your transmission coverage area. Some companies will provide you with computer coverage predictions before you even talk to the potential landlords. For more details on this service please contact   www.cfone.co.uk

Your operating centre should be easily accessible to customers who wish to walk in and make bookings, rather than call.

What equipment is needed?

Modern cab companies have state-of-the-art radio equipment or Global Positioning Systems (GPS) so the vehicles can be tracked on the booking and dispatch computers using the bespoke dispatch software to co-ordinate the jobs and vehicles. Another useful feature is to have full data so that the job details are transmitted in digital form to the cars and can appear on pocket PC's mounted in the cars or simply texted to the drivers phone. This enables a few operators in the office to control a large number of cars and it also prevents confusion when people may be of different nationalities and have widely changing accents. Once the vehicles have Pocket PCs fitted then the drivers can also choose to have in vehicle navigation systems such as Tom Tom and Copilot.

Radio licensing

Almost all private hire firms have some sort of radio communication, ranging from simple hand held mobile devices to complex computerised systems that are able to track and interact with drivers. Before you consider your options, however, you must get a proper license from Ofcom.

The license costs between £5 and £10 per car per year depending on the size of the fleet.

You can contact the RLA by calling 020 7211 0211 or by clicking on www.licensing.ofcom.org.uk

Radio equipment

Small operators may wish to dispense with the cost of any two way radio equipment and just use mobile phones.

It is however far more cost effective in the long run to use two way radio as unlike a mobile phone contract there is no monthly line charge associated with such systems.

Make sure you get the right equipment for the area you cover. VHF is good for long range communication and is best over long straight lines. For further information on radio equipment contact www.cfone.co.uk

To take the next step up to cover a wider area, you would need to lease a line on one of your area's telephone masts. Space on these transmitters is owned by companies such as NTL and Crown Castle, who then lease out space to local operators.

New technology – Computer based Booking and Dispatch System

With new technology you can track your cars using specialized software that knows the destination address and automatically places the car in the zone when they are clear. In addition to this GPS can be used to accurately pinpoint a car and jobs can be sent digitally to onboard computers or even text messages to mobile phones.

Previously high tech software and GPS systems have been out of the price range for most start-up minicab firms, but now there are firms that specialize in startup packages such as Cab Management System which offers a advance software complete with National street data for £20 per week per PC. This package can then integrate with SMS dispatch or full vehicle data systems complete with GPS for under £1.50 per week per vehicle.

Once your fleet is fitted with a data system you can talk to them in the conventional way and send them text details about pickups and so on. The drivers have five or six standard responses that they can send back to you, ranging from 'POB', ‘Soon to Clear’ or 'Panic' and many more.

Making a profit

Car for Private Taxi ?

Taxi cabs are your most important requirement to start a taxi cab business. It will be up to you to decide what car model you will use but it is best to inquire first from your licensing agency because there may be particular types of car that are required for use by taxi businesses. Operators of taxi businesses also have the option in choosing whether they will buy second hand cars or purchase new cars for their taxi business. If you prefer to use new cars for your taxi cab business, it is important that you understand it will require you to have more start up capital. You may, however, check out financing programs that you can avail of when purchasing your taxi business vehicles. Maintenance of taxi cabs will make up a bulk of your taxi business expenses so it will be wise to find a mechanic who can repair and provide maintenance of your taxi cabs on a regular basis.

Hours of operation

These could vary significantly. In cities people never sleep, therefore one might need to run cabs 24 hours a day. If you are the only driver than it might be up to you to decide when the best hours are for business.

Minimum number of people required to run a cab business:

It may only require one person to run this enterprise if one plans to go into it solo. The number of people needed is dependent on how many cabs someone plans on having and plans on using.




CMS Desktop

The heart of the CMS is the control centre software. This includes our CMS Desktop dispatcher software which allows each call-taker to book jobs, track Vehicles on a live map display, view the activity in the system, and resolve problems. Our computerized booking handling system offers efficient, easy to understand and hassle free booking handling by taking the advantage of modern technology but at the same time keeping the interface simple to understand and use.

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CMS Mobile

The CMS Mobile is a user friendly application for cab drivers and part of the CMS solution. Based on Windows Mobile and completely touch screen menu driven and paired with the CMS Desktop and GPS navigation the software streamlines the dispatch process by assigning the jobs to the driver closest to the pickup point. It also provides the driver with all the job details and directions right in the palm of his/her hand. The GPS data also enables the controller to tack the fleet at all times.

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CMS Online

CMS Online allows customers to make their bookings directly on your web site. They can book from any PC, Mac or even mobile device at anytime and from anywhere. Once a booking is made the customer is immediately sent an email confirming their booking. The dispatcher can decide how the bookings will be posted into CMS Desktop. Either the controller can allow the booking to be posted directly into CMS Desktop without controller intervention (e.g. for your best account customer).

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