by Stewart Harding
Setting up and running your own taxi or private hire firm is by no means simple as there
are regional differences and management styles are very different in different parts of
the UK.
2005-2006, the private hire and taxi industry was worth approx £2.6 billion. Over
500,000 drivers in the UK. Taxi use has steadily increased over the last 20 years - 32
per cent of the public use a taxi every month, compared to just 16 per cent in the
mid-1980s.
What’s the difference between taxis and private hire vehicles?
Although both serve the same purpose (to transport paying customers to their
destination, help with their luggage etc.), taxis and private hire vehicles have
significant differences.
Hackneys
Hackney Carriage taxis (black cabs) are able to pick up people off the street (flag
down) without a prior booking. Mostly found in urban areas, black cabs are highly
regulated, with fares controlled by local councils and numbers restricted by many local
authorities.
Drivers of black cabs are essentially self-employed and have to go through rigorous
checks and tests before they are awarded their license. Some Hackney Carriage operators
form co-operatives and drive saloons and MPV’s, However most Hackney drivers prefer the
traditional London style MetroCab or TX1 and TX2 Vehicles made by LTI.
Private Hire
Private hire vehicles, or minicabs, have to have a prior booking when picking up
passengers.
Minicab owners will be prosecuted if they are found touting their business or behaving
like a Hackney or Taxi.
Most private hire drivers are self-employed owner drivers and pay a minicab company a
circuit fee for taking the bookings and scheduling the work. The minicab operator
charges for the call centre and in most instances they will probably rent the radios end
even provide data terminals or PDA dispatch systems if they have computerised booking
and dispatch software.
If you want to be self-employed and make profit on your own without having to pay
minicab circuit fees, become a licensed black cab driver and go it alone. Some black cab
owners form co-operatives where they team up with other drivers to increase profits and
run operations much like a small business. Computer Cabs in London, was built around a
small fleet of black cabs. They now boast a fleet of over 3,500 taxis, taking 10-20,000
bookings a day. They also have one of the most advanced computer booking and dispatch
and data systems in the City, they can process credit cards and track their vehicles by
GPS.
It is possible to mix fleets, Hackney Carriages can cover private hire bookings if the
street hires are quiet. It is however illegal for the Private hire vehicles to stop if a
member of the public attempts to solicit them.
Rules and regulations
There are over 400 council licensing authorities in the UK and as there is no central
body the regulations for each council will vary according to their particular management
style. There are however basic regulations that are common to all authorities..
Private hire car regulations
Minicabs have suffered a bad reputation in the past due to the previously unregulated
nature of their work. Rogue drivers would pick up stray passengers and charge them
extortionate prices or worse. It is estimated that at least one woman a week is raped in
illegal minicabs in London alone, a shocking statistic which blights the good name of
the industry.
Some manufacturers of taxi booking and dispatch systems have features such as Text back
www.textback.me.uk which ensures that just prior to the private hire vehicle arriving
the passenger is informed by SMS the vehicle registration, description and driver name.
These essential passenger personal safety features are likely to make you more popular
with the female clients.
In 1998 The Private Hire Vehicles (London) Act, handed the responsibility of regulation
of minicabs and private hire to the Public Carriage Office, which until then only looked
after black cab licensing.
Minicab and private hire firms must now hold a private hire operator license before they
can accept bookings - your company will not be able to trade without one. In order to
get a license, you will have to prove that you are ‘a fit and proper person’. Any
criminal convictions, bankruptcy or breach of health and safety rules will count against
you.
You should also prove you hold any relevant radio licensing or insurance documents and
you must diligently ensure that your drivers vehicles and documents are in order. Some
software packages will provide a comprehensive record of all friver and vehicle
documentation and automatically lock drivers out if the documents have expired. For
further information look at the Diplomat Navigator product on the website at the bottom
of this article.
Your home address can be your operating centre, a licensing officer may be sent to
inspect the premises.
An application fee which runs for five years will be charged by the local authority.
Private hire cars are not required to have meters but may choose to install them. If
they are installed they will have to prove they are compliant when the vehicle attends
its regular road safety check 3 times a year, there is no restriction as to what a
minicab or private hire operator can charge.
Except for exceptional circumstances the vehicles must be less than 5 years old. Drivers
must have held a full EU driving license for 12 months, pass a medical and make a
declaration in relation to any criminal convictions. In some areas, drivers have to pass
a ‘knowledge’ test, similar to black cab licensees, in order to operate.
Hackney carriage (black cab) regulations
If you are planning to go it alone in a black cab, you need to meet certain
requirements. To get your license, you need to be 21 or over, have a full EU driving
license for at least 12 months and be able to drive a taxi competently. you will need to
prove that you are a ‘fit and proper person’, and you will be checked by the criminal
records bureau .(minor crimes may not automatically disqualify you.) and will require a
full medical, A ‘knowledge’ test may also be required.
London’s black cab laws are slightly more complex. You need to decide to apply for a
‘green badge’ (which allows you to operate in central London) or a ‘yellow badge’ (which
allows you operate in the suburbs.)
The Public Carriage Office allows two years for applicants to pass their central London
knowledge test, and six months to pass the suburbs knowledge test.
Training
There is currently no compulsory training programme, although in 2000 the Intermediate
Certificate in License Education for Taxi and Private Hire was introduced to provide a
nationally recognised qualification for drivers.
To get involved with a training programme, contact the Private Hire, Hackney Carriage
and Chauffeur Training Organisation on 0191 296 0814.
Useful contacts
The National Private Hire Association represent over 400 private hire firms. To find out
what they can do for you, call them on 0161 280 2800
If you are thinking of becoming a taxi driver, you should firstly contact your local
council to find out their particular fees. The Licensed Taxi Drivers Association will
also be able to help you out - you can contact them by calling 0207 286 1046.
Startup costs
As with much to do with the taxi industry, where you live and what sector you are
working in (black cab or private hire) greatly affects the costs involved in setting up
your own firm. You should contact your council to get exact figures, although there are
some solid estimates that you can work from.
Hackney Carriage costs
From last year, the Disability act requires black cabs have to include wheelchair access
and induction loops for the hard of hearing, although the timetable for compliance with
the new regulations has been put back pending an announcement by the government.
Nevertheless, it could cost you several thousand pounds to modify second hand black cabs
to keep up with the new rules. Brand new cabs currently cost £25,000 for a manual,
£27,000 for an automatic.
Taximeters are obligatory for Hackney Carriages and cost around £150-£300, although it
is possible to rent them out on a monthly or yearly basis. For further information
contact Diplomat on the link at the bottom of the article.
As well as the cost of a license, drivers also have to pay for an additional driving
test and area knowledge test - again, these costs vary according to the licensing body.
The outlay doesn’t stop there - a medical examination will cost you between £60 to £80.
Private hire costs
As with Hackney Carriages, the costs of getting your private hire fleet on the road will
vary depending on which licensing authority you are dealing with. You will need to pay
for operator, driver and vehicle licenses before you can get your Certificate of
Compliance from the council, which allows you to start taking bookings.
A private hire operator’s license costs anything between £250-£300, while a license for
your vehicle will range from £75 to £300. A license for your drivers will cost between
£25 to £200.
Insurance
You must be insured, Cars, drivers and third parties (i.e. passengers) must be insured,
with special private hire insurance available to minicab firms. It is also worth getting
your operating centre (if it is not your house) and any equipment (radios, GPS, PDA’s
and computer booking and dispatch systems etc.) insured too.
Premises
This can be any building you like as long as it conforms to Health and safety and has
all the appropriate licenses for equipment.
If you are going to be operating a VHF two way radio system try to choose a site that is
on high ground so as to maximize your transmission coverage area. Some companies will
provide you with computer coverage predictions before you even talk to the potential
landlords. For more details on this service please contact Diplomat.co.uk
Your operating centre should be easily accessible to customers who wish to walk in and
make bookings, rather than call.
What equipment is needed?
Modern cab companies have state-of-the-art radio equipment, this often integrates with
Global Positioning Systems (GPS) so the vehicles can be tracked on the booking and
dispatch computers using the bespoke dispatch software to co-ordinate the jobs and
vehicles. Another useful feature is to have full data so that the job details are
transmitted in digital form to the cars and can appear on pocket PC’s mounted in the
cars or simply texted to the drivers phone. This enables a few operators in the office
to control a large number of cars and it also prevents confusion when people may be of
different nationalities and have widely changing accents. Once the vehicles have Pocket
PCs fitted then the drivers can also choose to have in vehicle navigation systems such
as Tom Tom and destinator.
Radio licensing
Almost all private hire firms have some sort of radio communication, ranging from simple
hand held mobile devices to complex computerised systems that are able to track and
interact with drivers. Before you consider your options, however, you must get a proper
license from Ofcom
The licence costs between £5 and £10 per car per year depending on the size of the fleet.
You can contact the RLA by calling 020 7211 0211 or by clicking on www.radio.gov.uk
Radio equipment
Small operators may wish to dispense with the cost of any two way radio equipment and
just use mobile phones.
It is however far more cost effective in the long run to use two way radio as unlike a
mobile phone contract there is no monthly line charge associated with such systems
Make sure you get the right equipment for the area you cover. VHF is good for long range
communication and is best over long straight lines. Be sure to purchase radios that are
data compatible as many radios being offered at bargain prices are not. For further
information on data compatibility phone Diplomat on 01256 381656
To take the next step up to cover a wider area, you would need to lease a line on one of
your area’s telephone masts. Space on these transmitters is owned by companies such as
NTL and Crown Castle, who then lease out space to local operators.
New technology
With new technology you can track your cars using specialized software that knows the
destination address and automatically places the car in the rank when they are clear. In
addition to this GPS can be used to accurately pinpoint a car and jobs can be sent
digitally to onboard computers or even text messages to mobile phones..
Previously high tech software and GPS systems have been out of the price range for most
start-up minicab firms, but now there are firms that specialize in startup packages such
as Diplomat which offer a single seat of their software complete with National street
data for less than £1.00 a day. This package can then integrate with SMS dispatch or
full vehicle data systems complete with GPS for under £300.00 per vehicle.
Once your fleet is fitted with a data system you can talk to them in the conventional
way and send them text details about pick ups and so on. The drivers have five or six
standard responses that they can send back to you, ranging from ‘Picked up and on our
way’ to ‘Help! I’m being attacked!’ or please call me I need to talk to you.
Making a profit
Getting the right equipment and licenses doesn’t provide a guarantee that your private
hire firm will be successful - your whole enterprise can survive or fail due to public
perception, so it’s essential that you get this right.
It is important that ‘word of mouth’ is on your side. Carding (putting business cards
through letterboxes) is also very important. Research shows that most customers make
their judgment on a minicab or private hire firm after just one journey.
Even if you are operating just two cars from out of a cramped spare bedroom in your
house, if your drivers make a good impression, you could see a loyal customer base build
up, thus enabling you to take on more drivers and vehicles.
Factors such as turning up promptly, treating the customer with courtesy and having a
competitive pricing policy is vital in building up repeat customers so invest in booking
and dispatch software and always be polite and courteous on the telephone.
A good way to attract customers is to offer new features such as online internet
bookings and text bookings, this appeals greatly to the younger generation as they can
book entirely by SMS, modern booking and dispatch software will instantly translate the
text to a job and bypass the telephonist all together. Please contact WWW.DIPLOMAT.co.uk
for further information.
::About the Author::
Stewart Harding is the CEO of Windowview Ltd.
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