Questions to ask before starting a taxi company, and the honest answers

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.

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 works through both models, and taxi business 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, and a 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 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 and getting a private hire operator licence.

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, and if you do buy, 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 and driver commission or weekly rent go through both, and self-employed or employed 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 and 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.

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, or consider 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 and your Google Business Profile 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, and count what's ringing out with 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 and 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 and 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, and the numbers to watch are in 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 has the checks, and winning back lost 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 and whether 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, pricing corporate taxi accounts and 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, and when you're ready to grow, growing from 5 to 20 cars.