How To Make A Taxi Business Profitable

Most taxi business owners see their business as “just another taxi company” and here lies the root of all their problems. You can’t make money and be successful if you are “just another taxi company.”

How do you stop being one of those? You do so by being different. You look at what everybody else in the business is doing and do the opposite.

Most taxi companies provide “one size fits all” service to all of its customers. The owner of the taxi business fails to see and understand that different customers have different needs. Hence, they need to be talked to differently, marketed to differently and serviced differently. In most of the cases when failing to see that, the taxi service owner advertises low price (because that’s all he knows) and attracts customers who want low price.

The problem with price buyers is that there’re never loyal to your taxi company. They are loyal only to low price. As soon as your competitor offers price lower than you, these price shoppers go to your competitor and you’ve lost a customer. If you want to attract low price shoppers, then, by all means advertise low price. But if you want to attract people who are willing to pay for the service they receive (so you can make money), don’t advertise price.

What should you advertise? Well, that depends on the type of customer. Customers of a taxi service can be divided into following groups:

1.Affluent customers. They want experience and exclusivity. Better cars. Better drivers. Drivers they can choose, be it because they want to have a conversation or not talk at all. Amenities in the car. On-time guarantee. A VIP number to call the service that is not advertised to the public.

Such customers don’t really care about the price. Sure, if you are “just another taxi company,” they’ll beat you up on price and demand a deal. If they do so, it means that you are failing to provide an experience they’ll cheerfully pay a premium for. If that’s the case, chances are you aren’t doing anything I have just described. You fail to provide an experience and then can’t figure out why someone with money turns into a cheapskate. 

2.Frequent business travelers. Since they travel a lot, they really value their time. To them the deciding factor when choosing a transportation provider is predictability. They want to be sure that you’ll be there and you’ll be there on time. Every time. Their travel is usually paid for by an expense account and if you are doing things right, they will have no problem paying a premium price for the service.    

3.Train station commuters. They don’t really care about the cars and/or drivers. They want you to be there on time and take them to the train station

4.Local rides. Some of them are taken by people who can afford their own car, yet choose not to have one. Some of the customers take a taxi because they can’t afford their own car. Usually they are very price sensitive and not loyal customers.

5.Senior citizens. Frequently they have canes/walkers/wheelchairs. They mostly get of the house during the daytime. They want attentive drivers who will let them take their time when getting in and out of the car, help them with their walker, etc. Don’t send a minivan to pick them up, because it’s extremely hard for them to get into the freaking thing. Make sure their walker/wheelchair will fit into the car.

6.Students. The cheapest possible customer you’ll ever get. Never loyal. Will be out of college at some point, so you can’t build long-term repeat business with them.

And, to name a few more:

7.Bar crowd.

8.Hotels/convention centers.   

In order for your taxi business to be successful and profitable, you need to talk and market to all these customers of your taxi service differently.