Taxi business market research: is there room for another firm in my town?

Every town already has taxi firms. The question is whether they leave work on the table that a new firm could take. This guide shows how to answer it with public figures and an afternoon of your own checks: the official licence counts and how to read them, the 2am phone test, where the work in a town comes from, and how to check what people search for. No one publishes the size of a local taxi market, so you build the picture yourself. The numbers then go into your taxi business plan.

Is there room for another taxi firm in my town?

There's room if you can find work the existing firms don't do well, and you can do it better. A town full of taxis can still have gaps: nights when nobody answers, an airport run nobody wants, a business park with no account firm, a school contract up for tender.

There's rarely room for a copy of what's already there. If three firms pick up the phone at all hours, charge fair prices and send cars on time, a fourth doing the same thing has to win customers one at a time from them. That can work, but it's slow, as how to compete with bigger taxi firms explains.

So the research has two jobs. Find out how much work there is, and find out where the current firms fall short.

What do the official licence numbers tell you?

The Department for Transport publishes licence counts for every council in England and Wales: taxis, private hire vehicles, driver licences and private hire operator licences. Table TAXI0105 also gives licensed vehicles per 1,000 people, using the Office for National Statistics' 2024 population estimates. Here are five areas and England, at 1 April 2026:

The last column is our own sum: private hire vehicles divided by operator licences. It hints at how a market is shaped. Bath and North East Somerset has many small operators. Plymouth has fewer, larger ones. In a town run by a few big firms, look for the work they find fiddly. In a town of many small firms, look at nights and the phones.

Find your own council in tables TAXI0104 and TAXI0105, and compare it with two or three similar towns nearby.

Why can licence numbers mislead?

Because a car licensed in one council can work somewhere else. The DfT says so plainly: the number of licensed vehicles recorded for a licensing authority "does not necessarily reflect the number of vehicles operating within that authority's area".

Wolverhampton is the extreme case. The DfT says it licensed 13.1% of all private hire vehicles in England in 2026, which "reflects where vehicles are licensed, not necessarily where they operate". Sefton's 20.7 per 1,000 is more than three times England's 5.8. The DfT doesn't explain every council's figure, so treat any number far above the national rate as a question to ask, not an answer. A high figure in your town may mean cars licensed there work in a city nearby. A low figure may mean cars licensed elsewhere work in your town.

So use the licence counts to start the picture, never to finish it. The rest of the research tells you what's actually happening on your streets.

Who answers the phone at 2am?

Ring every firm in town at the hours that matter, and write down what happens. This is the single most useful test in taxi business market research, because it shows the gaps a customer feels.

Make the same calls at four times: 2am on a Saturday, 7am on a Tuesday, 5pm on a Friday and Sunday lunchtime. For each call, note:

• Did anyone answer, and after how long?
• How soon could they send a car, and what did they quote for a standard local run and the nearest airport?
• Could you book by app, website, text or WhatsApp?
• Did they take a pre-booking for next week?

Then read each firm's Google reviews for the same complaints over and over: no answer, late cars, no-shows on early airport runs. A pattern there is a gap you can plan around. If you find the night calls are the gap, plan how you'll answer them before you open. An AI phone agent answers your booking line when your office doesn't, quotes your own fixed prices and books the job into your Dispatch AI account, and missed calls in a taxi office covers the other ways.

Where does the work in your town come from?

From the places people travel to and from: stations, airports, nights out, schools, hospitals and businesses. Most of them have public figures you can look up.

Station and airport passengers aren't all taxi passengers, so don't multiply them into a forecast. Use them to compare towns and to decide where your marketing goes. A growing airport with no firm specialising in it is a gap. Our guides to winning more airport work, council school transport contracts and getting corporate taxi clients take each one further.

Public contracts have moved, too. The Procurement Act 2023 came into force on 24 February 2025, and Find a Tender is where public sector buyers now publish notices about procurement opportunities and contracts. Search it for your council's name and "transport".

How do you check search demand for taxis in your town?

Look at what people type into Google, and who shows up when they do. Google's Keyword Planner gives estimates of how many searches a phrase gets and what advertisers pay per click, but Google says you must finish setting up a Google Ads account, with billing details, to use it.

Search the phrases a customer would use: "taxi [town]", "[town] to [airport] taxi", "taxi near me" while standing in the town centre. Note who appears in the map results, how many reviews each firm has, and who's paying for ads. A firm with a weak listing and many searches against its town is a gap you can close with a better Google Business Profile. Don't publish or rely on a search volume figure without checking it against your own calls and bookings later.

A one-afternoon research checklist

You can do the desk work in an afternoon and the phone test over one weekend. Eight checks, in order:

1. Download DfT tables TAXI0104 and TAXI0105 and find your council and three similar towns.
2. Work out vehicles per 1,000 people and vehicles per operator for each, and note anything unusually high.
3. Read your council's public register of operators, if it publishes one, and list every firm licensed near you.
4. Look up your nearest stations and airport in the ORR and CAA figures.
5. Count late-night venues on your council's premises licence register.
6. Search Find a Tender for school and council transport notices in your area.
7. Search Google as a customer would, and note the map results, reviews and ads.
8. Ring every firm at 2am on a Saturday and at the three other times, and write down what happens.

Then write one page: where the work is, who does it now, where they fall short, and what you'd do differently. If you can't fill that page, you've learned something too.

What does the research tell you?

Your research tells you whether to open, and what to open as. The same town can be crowded for one kind of firm and wide open for another.

A crowded town isn't always a no. It can mean opening as a specialist: airport runs only, account work only, or nights. Whether the numbers stack up after that is the subject of is a taxi business profitable in the UK, and your first customers are covered in getting your first taxi bookings.