How To Start A Private Hire Business In The UK

June 16, 2019

Are you thinking of starting up a chauffeur company or private hire business? Great, you need to start off by putting your best foot forward. Here are some tips for private hire business to start the company responsibly.

First thing first, you need to get permission from the local governing body. For this, you have to apply for a private hire license from the local council. Every local council has a different process for medical tests and office risk assessments.

But before starting off this information, you need to know the difference between black cabs and private hire vehicles.

Taxi or Black Cabs: They pick up people from the street without advance booking. In urban areas, these cabs are regulated and fares are controlled by the local councils. They are self-employed and go through a rigorous test before getting the license.

Private Hire or Chauffeurs: They have to be prior booked before picking up the passengers. They are linked by a radio circuit to stay informed about the location of driver and passengers. These chauffeurs face penalties if discovered offering services to random people from the street.

1. Knowledge about the Industry

It’s no surprise that London chauffeur industry has witnessed a shift in recent years due to on-demand chauffeur apps. This shift has mostly affected metropolitan areas. In the past years, chauffeur apps have taken a large share of this market. Still, there is a lot of opportunity for a chauffeur, private hire vehicle, and chauffeur services business.

How to make a profit in this competitive market? Well, a great way is to find a niche to stand out from the crowd.

The hyper-local chauffeur service can be profitable in rural areas. There are chances that moving location may not be of your convenience but different options available here can make sense from a business perspective for you.

Some of the Options Available for you are:

a) City Centre

It will offer you with an interesting environment for driving and various ranges of prospective passengers. Undoubtedly it can get frustrating, costlier and hectic for you. You can get a license either for the entire Greater London or for maximum nine suburban sectors by TfL.

b) Airport Chauffeur Company

You can choose to serve only for airport transports or any particular transport route from the city center to the airport. This is a competitive place as many businesses are already in the market due to constant passenger supply. You need a PHV license to provide airport transfer services. Similarly, a train station is also a known source of passengers.

c) Local Chauffeur Service

Do you want to drive on less traffic? In such condition, suburbs are a better choice than driving in the city. This also means less lucrative fares.

d) For Clubbing

Drunken people are always in need of chauffeur service to avoid charges of drink and drive. You can enter into a bond with a club or bar to drive punters from bar to their destination and even take some commission for your service.

e) School Chauffeurs

People who don’t own a car or working parents can be the targeted customer for a school chauffeur business. You will require an enhanced DBS check for this as they will be checking if you are fit to transport their children.

f) Buy Chauffeur Business

You can look for an existing chauffeur business that is for sale if you want to run a fleet. There are a few things that you need to consider before buying an existing business. Look at the turnover and reason behind it getting sold. After that, you need to work out on managing sufficient capital.

Perform intensive research in the areas to find gaps in the market for your business. You can venture into town area or any niche that isn’t exploited yet.

You can research online reviews to see the complaints of the customers and how you can improve upon the service.

g) Female Chauffeur Driver Company

The chauffeur industry comprises of male drivers that make it a potential niche to have a female chauffeur company. Your riders can be female passengers who feel safe and comfortable with female drivers and parents who put their trust on female drivers.

h) Contact Removal Companies

Many people in London move from one place to the other. When the people move house, they need a cab service in case if they don’t have their own. You can offer chauffeur service to such people and make them reach their new place where they have moved. The APS-Plymouth Removals can be contacted for the same.

2. Name your Chauffeur Business

If you are a self-employed driver then there is no need for a business name but a private firm with multiple vehicles can reap benefit from creating a name and brand identity. In case you have no idea about website design, go for web hosting services. You will find plenty of designs to start or you can hire a website designer to do the work for you.

3. Make your Chauffeur Business Plan

A detailed and thorough business plan is crucial to generate profit. You need to make a costing plan for buying a chauffeur, radio equipment, GPS software, and fuel cards and then your potential earning. At the time you need more funds than what you have initially planned. In such cases, bridging loans can help you. Bridging loans for business are there to meet the immediate short term requirements of the businesses. Having a complete scenario in mind will give you an idea about how much charges you need to keep for the fares to ensure profitability.

4. Buying Chauffeurs

It is a great idea to lease your fleet to ensure your cars are meeting the standards. This way you will receive full service and warranty. As most of the providers maintain their car in better condition, fleet insurance will be cheaper for you.

There are a number of things you need to consider before making sure you have the right vehicles to the job for you. Some local council asks for chauffeur and PHVs to have a certain size of engine and seat width. Below are the vehicle requirements for a chauffeur:

• Safety: Your cars have to be rigorously tested for safety of passengers and drivers.
• Reliability: Get a car that runs smoothly and has a minor chance of any breakdown.
• Cost: This depends on your budget, but it is sensible to start from affordable cars.
• Luggage Space: You need to consider the boot space if you want your car to pick up passengers from the airport. You don’t want to miss on customer due to lack of luggage space.
• Manual or Automatic: Manual is more efficient but automatic will offer you a smoother experience when you have to start and stop your car in traffic the entire day.
• Engine: With lower carbon dioxide emissions, you will pay less VED tax.

5. Breakdown Cover

With your business growing, certain wear and tear can happen. You need to prevent them by servicing your cars regularly. But you still can’t stop sudden breakdowns from happening. You need to have a reliable breakdown cover for your chauffeurs to stay prepared as you want your vehicle to hit the road as soon as you can. This will keep your customers and drivers happy.

6. Trained Employees for Safety

You should consider the safety of your employee, especially in a high-risk environment. The selected drivers’ should go under rigorous official training to check their ability. A formal assessment is required to maintain the safety of drivers and customers. This way drivers are accountable for the actions and it will minimize the risk.

Not just training but a proper background check is required to ensure no criminal records and a clean driving license.

7. New Technology

You need to fit your fleet with the data system to track your cars and know the destination. It can show the accurate location of your car and jobs can be sent via text or onboard computers. The drivers can also have six standard responses that they can send back like ‘Soon to Clear’, ‘POB’ etc.

8. How to make Profits from this Business?

You can’t guarantee success by getting a license or the right equipment. Public perception is the key point to get your business going.

The “word of mouth” has to be on your side. Many types of research have shown that customer form judgment just after their first ride.

Even if you plan to operate with just two or three cars from a spare room, your car condition and driver’s behavior will build up a loyal customer base for you.

Some of the factors that work are:

• Turning up to the destination promptly
• Showing courtesy to the customers
• Competitive Pricing Policy

A great way to attract customer is by offering new features like text bookings and internet booking. This works among the younger audience who are most of the time on their phone.

Hope these tips will help you start a private hire business. All the best for your business!

Featured Image : TTstudio / Deposit Photos