How to Start a Successful Taxi / Private Hire Business in the UK? The Ultimate Guide

Starting a taxi business in the UK or anywhere in the world is not complicated as you think. But, it's not that easy as well. You have to put some effort into it and work hard to beat your competition.

If you want to start a taxi service in the UK, there are great opportunities in cities like London, Essex, Manchester, Edinburgh, Birmingham, Bradford, and many more...

This eBook carries every necessary step you should know and follow to start a successful taxi business in the UK.

Moreover, from the latest statistics to steps to start a taxi business in the UK and from the cost to choosing the best taxi dispatch software UK – you will explore everything in detail.

By the end of this eBook, you will get a clear roadmap for your taxi startup idea in 2025. You will also be able to start your taxi business hassle-free.

Let’s begin.

But wait! Before you jump on the long journey, getting immediate help from the expert may be something you need.

With this concept in mind, below is the poll for your help.

See if the question relates to your requirement and help yourself get free assistance from the expert.

What help does your business need?

Latest statistics: The new taxi market industry in the UK and at the global level

• The global market for online taxi services is estimated to reach $56.37 billion by 2027 at a CAGR of 10%.

• As per the survey of businessofapps, the taxi app market is expected to reach $283 billion by 2028.

• More than 300 million people use taxi apps across the world. And about 150 million use DiDi and Uber apps. (Source)

How to start a taxi business in the UK?

Now that you know the latest statistics about the taxi business, it's time to explore the steps to start a taxi business in the UK.

Starting a taxi or private hire business in the UK requires careful research, planning, compliance with local regulations, and much more.

In addition, you also have to follow other significant steps to give life to your innovative business ideas in the UK for starting a successful taxi business.

Let’s explore each step in detail below.

Research and planning

Before diving into the business, thorough research and planning are essential:

• Market Research

First comes first. And that’s market research. Understanding the demand for taxi services in your area is crucial.

Hence, start by thoroughly analyzing your local market.

Then identify your target audience and see who are the daily commuters, tourists, or corporate clients.

Next, look at existing competitors to see what services they offer, their pricing, and their strengths and weaknesses.

These 3 basic steps will help you identify gaps in the market and opportunities for your taxi business in UK.

Business Plan

When you have an innovative business idea, create a detailed business plan that outlines your business model, startup costs, revenue

projections, and marketing strategy.

But make sure, your business plan covers the following questions: (pretend “you” as “I”)

What type of services will I offer or can offer (i.e. standard taxis, ride-hailing, executive cars, airport transfers, and private hire)?

• How many hours can I work?

• How much will my startup cost?

• What all expenses will my startup business idea in the UK will include?

• How much will I earn based on my business model and the market research?

• How will I attract and retain customers?

• Shall I advertise, partner, or promote my business?

Abi Hussain, the transport manager at Cabzilla says that: The process of writing a taxi business plan was difficult. We had to consider several factors like:

• Our premises – where would we be based?

• Who would drive for us?

• And where would we find them?

We also had to consider licensing costs and insurance, as well as completing a;

• Competitor analysis

• Market analysis

• And financial forecasting

This comment from the taxi company manager justifies how significant it is for you and every startup to ask questions and follow the process.

Choose a business name

Pick a name that is unique, easy to remember, and reflects the nature of your business. Also, register your business legally.

If you are planning to launch your startup with online booking, check the name on domain buying platforms.

One of the examples where you can check and buy a domain is - ‘Godaddy.com’.

Choose business location

Experts suggest starting a business where you belong. It means from the hometown just like Ola and Uber did.

However, if you find any other location than your hometown as a good opportunity for your taxi business in the UK, you should establish your operations office there.

Consider factors like the;

• Demand in different areas

• Competition

• And accessibility

Remember, your selected location should be convenient for both – your drivers and target customers.

Legal and regulatory requirements

After you are done with all the above steps, your next move should be to legalize your taxi business in the UK.

Yes, this is one of the key steps for every taxi business startup to step into the UK taxi market.

Complying with the regulatory and legal requirements of the UK is crucial. Here is what you need to ensure;

Licensing

To operate your taxi business legally in the UK, you will have to fulfil the licenses and legal requirements like:

• Driver's license: You need a valid UK, NI or EU driving license. And it should be at least 12 months old.

• Taxi operator license: Obtain a taxi business operator’s license from your local council. Remember, operational conditions may vary based on location. Hence, get your licenses and operational requirements checked and verified thoroughly with your local council.

• Business license: This is a common and mandatory license you will always need anywhere in the UK. This license will help you legally run your business hassle-free.

Insurance

Insurance is a must for every vehicle on the road. And it becomes mandatory when you are running a taxi business.

Being in the taxi transportation business, the taxi driver will spend more time on the road while carrying passengers.

This increases the risk of accidents. Plus, as per UK law, your drivers can only ride a taxi if it is insured.

Hence, make sure you have the appropriate insurance coverage for your vehicles and drivers.

Vehicle Standards

Your vehicles must meet the standards set by the licensing authority. This usually includes regular inspections to ensure they are safe, clean, and suitable for use as taxis.

You’ll also have to keep up with maintenance and repairs to stay compliant with UK transportation laws.

Setting Up Your Fleet

The next step is setting up your fleet. Your fleets are the backbone of your taxi services.

It determines how effectively you can meet your customer's needs and ensure you comply with regulatory standards.

Vehicle Procurement

Decide whether you can purchase vehicles or get on a lease.

If you buy, you will get full ownership whereas leasing can be more flexible and reduce upfront costs.

Choose vehicles that meet the UK’s regulatory standards and are appropriate for your target market and passengers – consider factors like fuel

efficiency, comfort, and size.

Branding

Brand your vehicles with your company logo and contact information. This will make your taxis easily identifiable.

Another way, you can offer your service online and on-demand on your brand name like Uber does is by creating an app like Uber or implementing

the taxi dispatch software Uk.

Yes, with the help of white label taxi dispatch software UK, you can build your own taxi booking app that will have your;

• Brand/company logo

• Brand name

• Color of your choice

• Selected features from the huge feature list

• Launch on Play Store (Android)

• Launch on App Store (iOS)

Implementing taxi dispatch software

Till now, you have discovered all about offline activities. Now comes the key factor that has played and is playing a vital role in helping

taxi companies like yours grow. No matter if you are in the UK.

Implementing taxi dispatch software is key to running a smooth operation.

Here’s how to choose and use the best software for your taxi business needs.

Choose the Right Software

Invest in a robust taxi booking software like Yelowsoft. This software offers features such as

• Real-time tracking

• Automated dispatching

• Driver management

• Reports & analytics and more

These features help you to improve efficiency, reduce wait times, and enhance your customer satisfaction.

Training

Train your staff and drivers on how to use the taxi booking app. Make sure everyone is comfortable with the technology and understands how to use it effectively.

This will ensure smooth operations and improve service quality.

Features to include in your taxi app

Whether you opt for building a taxi dispatch software from scratch, buying a clone script, or partnering with the best cloud-based ready-to-use

white label taxi booking software provider, below are the features that make the software or taxi business software the best among all.

And the below features will play a vital role in helping you to beat your competitors.

Hence, when you start a taxi business in the UK by having a taxi management software on your side, make sure it has these features.

First of all, your taxi dispatch platform should have these separate solutions;

• Driver app

• Passenger app

• Dispatcher app

• Admin panel

• Web booking

Once you are sure that the taxi cab dispatch solution has these solutions, make sure it has these advanced features.

• Reports and analytics

• 3rd party integrations

• Advanced scheduling

• Email and SMS notifications

• Multi-lingual support

• Map view

• eWallet

• Localization

• Multi-currency

• Multi-payment

• Driver and document management

• Surge pricing

• Dynamic fare calculator

• Route optimization

• SOS features (security)

• Auto trip assignment

• Round-the-clock customer support

• Ride cancellation

• Loyalty programs

• In-app communication

• Feedback & reviews and more…

Marketing and promotion

Promoting your taxi business in the UK with the help of various forms of marketing is extremely crucial to succeed in today’s digital era.

Here is a simple strategy that you can use to attract customers and business growth:

Digital Marketing

Use social media to get exposure on various social media channels, search engine optimization (SEO) to reach a mass audience using Google, and

online advertising to reach potential customers.

Partnerships

Partner with local businesses, hotels, and event organizers to offer exclusive services. These partnerships can provide a steady stream of

customers and enhance your business’s reputation.

Customer Service

Customers are the reason you become a brand and earn massive revenue. Providing excellent customer service is key to encouraging repeat

business and generating positive reviews.

To ensure better customer service, train your drivers to be;

• Professional

• Courteous, and

• Helpful

Managing operations

Managing your business operations manually is a headache. Here you will explore how implementing the taxi business software can help you manage

operations smoothly and keep on track.

• Driver Management

Hire reliable and professional drivers who have experience in driving and treating passengers. Ensure they are well-trained, motivated, and

understand your company’s values and standards. Good drivers are essential for providing a high-quality service.

But, here comes the challenge now.

How will you manage drivers? If you are running a business manually, it becomes challenging to manage drivers and other driver-related operations.

Hence, you should have taxi dispatch software that will empower you to manage drivers from anywhere and perform all the activities online. This

will save you time, effort, and even unwanted expenses.

• Fleet Maintenance

Regularly maintain your vehicles to avoid breakdowns and ensure safety. This includes routine checks, servicing, and repairs. Keeping your

fleet in good condition is crucial for reliability and customer satisfaction.

• Financial Management

Keep track of your finances carefully. Monitor your income and expenses, manage cash flow, and reinvest profits back into your business. Good

financial management is crucial for sustaining and growing your business.

How much does it cost to start a taxi business?

The cost of starting a taxi business is based on various factors. Initially, you can start with minimal equipment and expand as your business grows.

Isn’t it a fantastic surprise?

In this competitive market with so many companies offering taxi booking app development, Yelowsoft stands out by providing a UK-based taxi

dispatch software that is white-label, future-ready, feature-rich, scalable, and trusted by taxi companies across the globe.

Why Yelowsoft?

Yelowsoft is not just a typical white label taxi dispatch software provider. It is a trusted brand providing taxi dispatch software solutions worldwide.

The software does not just take your taxi business online. But, it solves the real problem your taxi business has.

Yelowsoft is the best option if you are looking for Uber clone app, Bolt clone app, Lyft clone app, Careem clone app and more…

With over 500 taxi companies using Yelowsoft’s reliable taxi dispatch software and enjoying growth and success daily, we want other taxi companies in the UK like you to get the same.

If you have already started your taxi business in the UK, but need help with the technology (advanced taxi dispatch platform), feel free to reach out to Yelowsoft.

Conclusion

Starting a taxi or private hire business in the UK requires careful planning, adherence to regulations, efficient management, reliable taxi dispatch software with advanced features, and smart marketing and promotion.

By following this guide and leveraging advanced taxi dispatch software like Yelowsoft, you can establish a successful and profitable taxi or private hire service.

For more information on how Yelowsoft can help streamline your operations, contact Yelowsoft today or request a demo.