How to start a taxi business

by Startacus Admin

Rules and Regulations

This is the point at which our heads begin to ache a little … there is simply no way to pin down all of the rules and regulations which govern the hackney cab and hire car businesses in the UK because there are hundreds of local licensing authorities who all have differing expectations.

However there are some standard rules which apply no matter where in the UK you are operating:

Hire car firms- In order to operate a hire car firm, you will need to be in possession of a ‘private hire operator licence’ (or PHVL). These licences normally last for around 5 years and can be obtained by applying to your local council licensing authority. There is a charge for the administration of this process, however most councils will operate a scheme whereby the fee may be reduced or waived in the case of small operators with just a few vehicles in their fleet.

It is also essential that your fleet is covered by a private hire taxi insurance policy, which will provide you, other road users and your passengers with the necessary cover should you have an accident. The premium for these policies will be much higher than that of a typical car owing to the fact that you will be travelling many more miles. In addition to this, taxis are required to undergo their MOT test 3 times a year rather than the standard single test per year.

It is a common misconception that as a private hire taxi firm you will be required to have an office… this is not the case, but you will be required to have at least one centralized “Operating Centre” within which the booking for your services are made. Fortunately this “operating centre” can be your home, meaning that your taxi hire company may have little or no premises expenditure.

Hackney Cabs - The first thing that you will need to do in order to become a black taxi driver is successfully complete the Driving Standards Agency Taxi Assessment which includes an eyesight test, theory examination and advanced practical driving test.

The rules and regulations which govern the operations of black cab drivers vary significantly depending upon which council area you are in. In London, for example drivers must pass an infamous test called “The Knowledge” to show that they have a high enough level of experience of London's geography. London ‘cabbies’ operate under a badge system which dictates which area they may ply their trade within. A yellow badge denotes those taxis which operate within suburban areas and a green one allows drivers to work right across the city.

For more information on how to become a black cab driver within your local area, you will need to contact your local licensing authority.

Hopefully you have found quick guide to the basics of setting up a taxi firm/ hackney cab useful, next we will go into some of the specifics you need to know about including marketing, finance and business practicals.

Don't forget to check out some of our other "How to start a..." posts, including....

How to start a B & B

How to start a cleaning business

How to start a restaurant

information provided correct at time of publication but please do check current legislation as rules and regulations do change. 

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Published on: 9th March 2014