# Questions to ask before starting a taxi company, and the honest answers > The questions to ask before starting a taxi company come in three stages: before you start (money, the operator licence, drivers, cars, premises and your town), the first months (bookings, phones, a controller, cash) and the weeks when bookings are thin. A London operator licence alone can take up to 16 weeks, so ask the money and licence questions first. By Joe, founder of Dispatch AI. Updated 2026-10-21. The web page: https://dispatchai.co.uk/guides/questions-to-ask-before-starting-a-taxi-company/ These are the questions to ask before starting a taxi company, written the way owners ask them over a cup of tea. Each one gets a short, straight answer and a link to the full guide on this site. They run in the order you'll meet them: before you start, the first months, and the weeks when the phone goes quiet. The licensing detail follows England and Wales outside London. In London the licensing body is TfL, and Scotland and Northern Ireland have their own systems. ## Which questions should you ask before starting a taxi company? Ask the money and licence questions first, because they take longest to answer and they shape everything after them. The rest follow in three stages. | Stage | The question | Full guide | |---|---|---| | Before you start | Is a taxi business profitable? | [Is a taxi business profitable](https://dispatchai.co.uk/guides/is-a-taxi-business-profitable-uk/) | | Before you start | How much money do you need? | [Cost to start a taxi business](https://dispatchai.co.uk/guides/cost-to-start-a-taxi-business-uk/) | | Before you start | How much will you earn as the owner? | [Taxi company owner salary](https://dispatchai.co.uk/guides/how-much-do-taxi-company-owners-earn/) | | Before you start | Which licence, and how long does it take? | [How long an operator licence takes](https://dispatchai.co.uk/guides/how-long-to-get-a-private-hire-operator-licence/) | | Before you start | Do you need to own cars? | [Starting without your own cars](https://dispatchai.co.uk/guides/start-a-taxi-company-without-owning-cars/) | | Before you start | Where will drivers come from? | [Finding your first drivers](https://dispatchai.co.uk/guides/finding-your-first-drivers/) | | Before you start | Can you run it from home? | [Running the firm from home](https://dispatchai.co.uk/guides/run-a-taxi-company-from-home/) | | Before you start | Is there room in your town? | [Room for another taxi firm](https://dispatchai.co.uk/guides/is-there-room-for-another-taxi-firm-in-my-town/) | | Before you start | Can you start with no experience? | [Starting with no experience](https://dispatchai.co.uk/guides/start-a-taxi-company-with-no-experience/) | | First months | Where do the first bookings come from? | [Your first taxi bookings](https://dispatchai.co.uk/guides/getting-your-first-taxi-bookings/) | | First months | What phone system do you need? | [Phone number and phone system](https://dispatchai.co.uk/guides/phone-number-and-phone-system-for-a-taxi-firm/) | | First months | When do you hire a controller? | [When to hire a controller](https://dispatchai.co.uk/guides/when-to-hire-a-taxi-controller/) | | First months | What if a driver doesn't turn up? | [When a driver doesn't turn up](https://dispatchai.co.uk/guides/what-to-do-when-a-taxi-driver-doesnt-turn-up/) | | First months | What should the first 90 days look like? | [The first 90 days](https://dispatchai.co.uk/guides/first-90-days-of-a-new-taxi-firm/) | | Bookings thin | Why aren't you getting bookings? | [Why bookings are thin](https://dispatchai.co.uk/guides/why-is-my-taxi-business-not-getting-bookings/) | | Bookings thin | What can you fix on a small budget? | [Low budget marketing](https://dispatchai.co.uk/guides/low-budget-marketing-for-a-taxi-firm/) | | Bookings thin | How do you win corporate work? | [Getting corporate taxi clients](https://dispatchai.co.uk/guides/how-to-get-corporate-taxi-clients/) | | Bookings thin | How can a small firm compete? | [Competing with bigger firms](https://dispatchai.co.uk/guides/how-to-compete-with-bigger-taxi-firms/) | ## Is a taxi business profitable? A taxi business can make a profit, but nobody publishes a reliable average margin for UK firms, so be wary of anyone who quotes one. Profit depends on how you're paid. A firm working as its drivers' agent earns commission or weekly rent. A firm that owns the cars or employs drivers takes the whole fare and carries the costs. Count your own hours as a cost. A firm that only pays because the owner works 70 hours a week for nothing isn't profitable yet. Our guide to [whether a taxi business is profitable](https://dispatchai.co.uk/guides/is-a-taxi-business-profitable-uk/) works through both models, and [taxi business profit margins](https://dispatchai.co.uk/guides/taxi-firm-profit-margins/) shows where the money goes. ## How much money do you need to start a taxi company? Budget for licence fees, insurance, and running costs until bookings cover them. Licence fees are the part you can pin down today. Bristol City Council charges £1,058 for a five-year operator licence and £251 a year for each vehicle licence. A basic DBS check costs £20 from 5 October 2026, and Bristol wants one for each applicant. Insurance, phones, software and marketing come on top, plus wages if anyone answers the phone for you. The full list is in [what it costs to start a taxi business](https://dispatchai.co.uk/guides/cost-to-start-a-taxi-business-uk/), and a [taxi business plan](https://dispatchai.co.uk/guides/taxi-business-plan/) turns it into the number of jobs a week you need. ## How much will you earn as the owner? You earn what's left after every cost, so it depends on how many drivers you have, how you charge them and how many hours you work yourself. No reliable published salary figure exists for taxi firm owners. The worked examples in our guide to [taxi company owner salary](https://dispatchai.co.uk/guides/how-much-do-taxi-company-owners-earn/) make one point plainly. A 5-car firm where the owner also drives and a 20-car firm that pays night controllers end up with similar take-home pay for the owner, because the bigger firm pays for its office. ## Which licence do you need, and how long does it take? For private hire work you need an operator licence from the council where you'll take bookings, or from TfL in London, plus a licence for every driver and every car. GOV.UK says all three must come from the same authority. Section 55 of the Local Government (Miscellaneous Provisions) Act 1976 lets a council grant an operator licence for up to five years. Timings vary. TfL says a typical application can take up to 16 weeks, and Bristol says up to 4 weeks. Knowingly operating without a licence is an offence under section 46 of the same Act, so take no bookings until it arrives. See [how long an operator licence takes](https://dispatchai.co.uk/guides/how-long-to-get-a-private-hire-operator-licence/) and [getting a private hire operator licence](https://dispatchai.co.uk/guides/private-hire-operator-licence-uk/). ## Do you need to own any cars? No. Section 80 of the 1976 Act defines operating as making provision for the invitation or acceptance of bookings, so the operator licence is about taking bookings, not owning vehicles. HMRC's VAT Notice 700/25 describes drivers who buy or rent their own vehicle and work on a self-employed basis. You're still responsible for every car and driver you send. Read [starting a taxi company without owning cars](https://dispatchai.co.uk/guides/start-a-taxi-company-without-owning-cars/), and if you do buy, [choosing vehicles for a taxi fleet](https://dispatchai.co.uk/guides/choosing-vehicles-for-a-taxi-fleet/). ## Where will your drivers come from, and how will you charge them? Your first drivers have to come from people licensed by your own council, because your drivers, your cars and your operator licence must all come from the same authority. Former colleagues, drivers unhappy at a bigger firm and newly licensed drivers are good places to start. Then decide how they pay you. Commission rises and falls with the work, and weekly rent stays the same whether the week is busy or dead. Our guides to [finding your first drivers](https://dispatchai.co.uk/guides/finding-your-first-drivers/) and [driver commission or weekly rent](https://dispatchai.co.uk/guides/driver-commission-or-weekly-rent/) go through both, and [self-employed or employed drivers](https://dispatchai.co.uk/guides/self-employed-or-employed-taxi-drivers/) covers the legal side. ## Can you run a taxi company from home? Often, yes. TfL says an operating centre can be your home address, and Hull City Council lets operators work from home within its boundary, saying they should have one or two private hire vehicles at most. Liverpool City Council says you need planning permission even when the business runs from home. Planning, business rates, your mortgage or tenancy and drivers parking outside all come into it. See [running a taxi business from home](https://dispatchai.co.uk/guides/run-a-taxi-company-from-home/) and [operator premises requirements](https://dispatchai.co.uk/guides/private-hire-operator-premises-requirements/). ## Is there room for another taxi firm in your town? There's room if you can name work the existing firms do badly: late pre-books, unanswered phones at night, airport runs or account work. The Department for Transport counted 290,000 licensed private hire vehicles in England on 1 April 2026, up 13% on 2024, and 19,000 licensed operators, up 17%. Those numbers say the trade is growing. They don't say your town needs you. Spend a week booking your rivals and timing their answers, then read [is there room for another taxi firm in my town](https://dispatchai.co.uk/guides/is-there-room-for-another-taxi-firm-in-my-town/). ## Can you start a taxi company with no experience? Yes. The law doesn't ask for trade experience: section 55 of the 1976 Act asks whether you're a fit and proper person to hold an operator licence. Bristol's application asks for your safeguarding, complaints and training policies, so you'll have to learn the rules before you apply. What you lack is knowing the drivers, the roads and the busy hours. Hire or partner with someone who does. More in [starting a taxi company with no experience](https://dispatchai.co.uk/guides/start-a-taxi-company-with-no-experience/), or consider [buying an existing taxi firm](https://dispatchai.co.uk/guides/buying-an-existing-taxi-firm/) instead. ## Where will your first bookings come from? Your first bookings come from people who already know you, then from local search, then from businesses near you. Friends, family and regulars from your driving days book first. A Google Business Profile with a local number and real reviews brings the next wave. Business work takes longest but lasts. Our guides to [getting your first taxi bookings](https://dispatchai.co.uk/guides/getting-your-first-taxi-bookings/) and [your Google Business Profile](https://dispatchai.co.uk/guides/google-business-profile-for-taxi-firms/) set out the order to do it in. ## What phone number and phone system do you need? Get a local number you'll keep for years, and a way to answer it when you're driving, asleep or already on a call. Don't plan to take bookings at the wheel: GOV.UK says holding and using a phone while driving can bring 6 penalty points and a £200 fine. A call divert to a second person, an answering service or a phone agent covers the gaps. 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. Compare the options in [phone number and phone system for a taxi firm](https://dispatchai.co.uk/guides/phone-number-and-phone-system-for-a-taxi-firm/), and count what's ringing out with [missed calls in a taxi office](https://dispatchai.co.uk/guides/missed-calls-in-a-taxi-office/). ## When should you hire a controller? Hire a controller when the bookings you lose to unanswered calls are worth more than the wages. The National Living Wage is £12.71 an hour at 21 and over from 1 April 2026. Covering 6 hours every evening for a year is 2,190 hours, or £27,835 before employer National Insurance. Anyone taking bookings or dispatching goes on your register of booking and dispatch staff, and the Statutory Taxi and Private Hire Vehicle Standards expect a basic DBS check on each of them. Read [when to hire a taxi controller](https://dispatchai.co.uk/guides/when-to-hire-a-taxi-controller/) and [night cover without a night controller](https://dispatchai.co.uk/guides/taxi-night-cover-without-a-night-controller/). ## What do you do when a driver doesn't turn up? Have the plan before it happens: a back-up driver, a rule for when you ring the passenger, and a licensed operator you can pass the job to. Section 55A of the 1976 Act lets you sub-contract a booking to another licensed operator, including one in another district. Section 56 still treats the contract as made with you, so the passenger is your responsibility either way. See [what to do when a taxi driver doesn't turn up](https://dispatchai.co.uk/guides/what-to-do-when-a-taxi-driver-doesnt-turn-up/) and [cross-border hiring and subcontracting](https://dispatchai.co.uk/guides/cross-border-hiring-and-subcontracting/). ## What should the first 90 days look like? Spend the first 90 days counting: calls in, calls missed, jobs done, drivers' hours and cash in the bank. Those five numbers tell you what to fix before your savings run out. Get the paperwork habits right at the same time. The Statutory Standards suggest keeping booking records for at least 6 months, and London operators must keep them for 12 months. If you hold passengers' details, pay the data protection fee to the ICO: £52 on tier 1 and £78 on tier 2 since 17 February 2025. The week-by-week plan is in [the first 90 days of a new taxi firm](https://dispatchai.co.uk/guides/first-90-days-of-a-new-taxi-firm/), and the numbers to watch are in [taxi business numbers to track](https://dispatchai.co.uk/guides/taxi-business-numbers-to-track/). ## Why aren't you getting bookings? Check whether people can find you, reach you and book you, in that order. A firm nobody can find gets no calls. A firm that rings out loses the calls it gets. A firm with a slow or awkward booking process loses people halfway. Fix the first broken step, not the one you enjoy fixing. Our guide to [why a taxi business isn't getting bookings](https://dispatchai.co.uk/guides/why-is-my-taxi-business-not-getting-bookings/) has the checks, and [winning back lost customers](https://dispatchai.co.uk/guides/how-to-win-back-lost-taxi-customers/) covers passengers who've drifted away. ## What can you fix on a small budget? Fix the free things first: your Google listing, how fast you answer, and asking happy passengers for a review. Then spend small amounts where you can count the result, such as leaflets to one estate with their own phone number or offer code. See [low budget marketing for a taxi firm](https://dispatchai.co.uk/guides/low-budget-marketing-for-a-taxi-firm/) and [whether taxi leaflets still work](https://dispatchai.co.uk/guides/do-taxi-leaflets-still-work/). ## How do you win corporate work? Start with businesses near you that already book cars: hotels, solicitors, schools, care homes and offices with visitors. Ask who books their taxis now and what goes wrong, then offer to fix that one thing. Agree payment terms in writing. GOV.UK says statutory interest on late business payments is 8% plus the Bank of England base rate. Our guides to [getting corporate taxi clients](https://dispatchai.co.uk/guides/how-to-get-corporate-taxi-clients/), [pricing corporate taxi accounts](https://dispatchai.co.uk/guides/pricing-corporate-taxi-accounts/) and [getting on an approved supplier list](https://dispatchai.co.uk/guides/getting-on-an-approved-supplier-list/) take it step by step. ## How can a small taxi firm compete with bigger ones? Compete on what a big firm finds hard: knowing regulars by name, the same driver for the school run, and a person who sorts a problem on the first call. Don't try to win on price alone, because a bigger firm can cut fares for longer than you can. Read [how to compete with bigger taxi firms](https://dispatchai.co.uk/guides/how-to-compete-with-bigger-taxi-firms/), and when you're ready to grow, [growing from 5 to 20 cars](https://dispatchai.co.uk/guides/how-to-grow-a-taxi-firm-from-5-to-20-cars/). ## Frequently asked questions ### What should you ask the council before you apply? Ask where your base has to be, what planning evidence they want, which fee band you fall into, how long applications take and which documents they need. Telford says an operator licence can't be transferred from one person, partnership or company to another, so ask in the name you'll trade under. ### Are the new national licensing standards in force? Not yet. Chapter 6 of Part 3 of the English Devolution and Community Empowerment Act 2026 covers taxi and private hire licensing, but section 108(2)(c) kept it out of the parts that started on Royal Assent. Separately, the Department for Transport consulted from 8 January 2026 on cutting licensing authorities from 263 to 70. Check its page for the outcome. ### Can you start part-time while you still drive? Yes, as long as your driver licence comes from the same council as your operator licence. The problem is the phone. You can't safely take bookings at the wheel, so arrange cover for the hours you're driving before you take on other drivers. ### Should you set up a limited company before applying? Decide first, because the licence is granted to a named person, partnership or company, and Telford says it can't be transferred to another one later. A limited company keeps the firm's debts separate from you. An accountant can tell you which suits your plans, and [registering a taxi company](https://dispatchai.co.uk/guides/registering-a-taxi-company/) covers the paperwork. ## Sources - [Taxi and private hire vehicle statistics, England: 2026 (Department for Transport)](https://www.gov.uk/government/statistics/taxi-and-private-hire-vehicle-statistics-england-2026/taxi-and-private-hire-vehicle-statistics-england-2026) licensed vehicles and operators at 1 April 2026, published 13 August 2026 - [Operator licences for private hire vehicles (GOV.UK)](https://www.gov.uk/operator-licence-private-hire-vehicle) same-authority rule for driver, vehicle and operator licences - [Local Government (Miscellaneous Provisions) Act 1976, section 46 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/57/section/46) operating without a licence - [Local Government (Miscellaneous Provisions) Act 1976, section 55 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/57/section/55) fit and proper test, licence for up to five years - [Local Government (Miscellaneous Provisions) Act 1976, section 55A (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/57/section/55A) sub-contracting a booking - [Local Government (Miscellaneous Provisions) Act 1976, section 56 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/57/section/56) contract made with the operator who accepted the booking - [Local Government (Miscellaneous Provisions) Act 1976, section 80 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/57/section/80) definition of "operate" - [Private hire operator licence (Transport for London)](https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/private-hire-operator-licence) home address as operating centre, up to 16 weeks - [Private Hire Vehicles (London) (Operators' Licences) Regulations 2000, consolidated text (Transport for London)](https://content.tfl.gov.uk/phv-operator-licence-regulations-2000-consolidated-sept-2022.pdf) regulation 16, booking records kept twelve months - [Apply for an operator licence (Bristol City Council)](https://www.bristol.gov.uk/licences-permits/apply-for-an-operator-licence) fees, documents, up to 4 weeks - [Apply for a new vehicle licence (Bristol City Council)](https://www.bristol.gov.uk/business/licences-and-permits/taxis-and-private-hire-licensing/apply-for-a-new-vehicle-licence) £251 for one year - [Private hire operator (Hull City Council)](https://hull.gov.uk/licences-permits-registrations/private-hire-operator) operating from home with one to two vehicles - [Licences for taxi operators (Liverpool City Council)](https://liverpool.gov.uk/business/licences-and-permits/taxi-licences/licences-for-taxi-operators/) planning permission when run from home - [Apply to become a private hire operator (Telford and Wrekin Council)](https://www.telford.gov.uk/public-protection/licensing/taxi-and-private-hire-licences/apply-to-become-a-private-hire-operator) licences can't be transferred - [How VAT applies to taxis and private hire cars, Notice 700/25 (HMRC)](https://www.gov.uk/guidance/how-vat-applies-to-taxis-and-private-hire-cars-notice-70025) section 2.1, owner drivers - [DBS reduces fees for checks and Update Service from 5 October 2026 (GOV.UK)](https://www.gov.uk/government/news/dbs-reduces-fees-for-checks-and-update-service-from-5-october-2026) basic check £20 - [Rates and thresholds for employers 2026 to 2027 (GOV.UK)](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027) National Living Wage £12.71 - [Statutory Taxi and Private Hire Vehicle Standards (Department for Transport)](https://www.gov.uk/government/publications/statutory-taxi-and-private-hire-vehicle-standards/statutory-taxi-and-private-hire-vehicle-standards) paragraphs 8.2 and 8.3, booking staff and records - [Changes to the data protection fee (ICO)](https://ico.org.uk/for-organisations/data-protection-fee/changes-to-the-data-protection-fee/) £52 and £78 from 17 February 2025 - [Using a phone while driving: the law (GOV.UK)](https://www.gov.uk/using-mobile-phones-when-driving-the-law) 6 points and a £200 fine - [Charging interest on late commercial payments (GOV.UK)](https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt) 8% plus base rate - [English Devolution and Community Empowerment Act 2026, section 108 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/2026/23/section/108) taxi licensing chapter not commenced on Royal Assent - [New proposals set out to reduce out-of-area working for taxis (Department for Transport)](https://www.gov.uk/government/news/new-proposals-set-out-to-reduce-out-of-area-working-for-taxis-and-boost-passenger-safety) consultation from 8 January 2026, 263 to 70 authorities Dispatch AI is a trading name of CABO TECH SOLUTION AI LTD, registered in England and Wales, company no. 16255667.