How To Start A Taxi Service In A Small Town?

Taxis are a reliable means of transportation these days. At any place, both tourists and natives require a way to commute and taxi services are an easy method to do so. And hence, a taxi service is also a scalable business. So, if you’re wondering about how to start a taxi service in a small town, we’ve got you covered!

Before expanding into additional regions, it is always a good idea to start and establish the business in a few towns or cities. In a small town, starting a taxi service requires careful planning and execution. Starting a taxi service in a small town can be a rewarding and profitable business venture if properly planned and carried out.

And here’s everything you need to know!

Quick Steps to Start A Taxi Service

  • Do good research
  • Look for funding
  • Register the business
  • Issue required licenses
  • Get the taxi
  • Get your vehicles & business insured
  • Start the business
  • Hiring drivers
  • Layout your business
  • Advertise & market it

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How To Start A Taxi Service In A Small Town?

Starting a taxi service requires following a set of steps, like any business. They are listed below:

1. Do good research

To learn about the local demand for taxi services, conduct market research. Examine the competition, the local population, and the number of visitors and tourists. Determine the town’s busiest times and locations. No matter how small a town is, its people require ways to commute. However, it’s important to consider a more populous town, where you’ll automatically find more customers. 

2. Look for funding

Determine the funding sources from which arrangements must be made. If a bank loan is to be considered, then you will need documents. Ensure that all operations, infrastructure, insurance, marketing, and legal and statutory aspects are taken care of with bank funds. 

3. Register the business

Register your taxi service with the Secretary of State, in the town where you intend to operate. This might necessitate submitting articles of organizations, making payments for registration, and getting a business license. 

Then make an application to the Internal Revenue Service (IRS) for a Tax Identification Number. Your company will be identified with this number for tax purposes.

4. Issue required licenses

Starting a taxi business requires a commercial taxi driver’s license as well as insurance since it has become a commercial business. This is required by some states and you cannot start a business on just a personal driver’s license. The taxi company can easily obtain a license for a few hundred dollars from the local department of motor vehicles.

5. Get the taxi

Getting taxis is the first thing that comes to mind when thinking about how to start a taxi service in a small town. You should go with a car that isn’t too expensive or the cheapest because you need to factor in the cost of repairs and maintenance. 

Choose a taxi that falls within your price range. You’ll need to paint these cars a particular colour, and add the logo, cab meters, roof lights, and more to make them part of your fleet.

6. Get your vehicles & business insured

At the very least, the business must have the minimum amount of coverage for everything from the vehicles and the drivers to the office/garage. Review these plans over time to better adapt to the evolving business. The purpose of vehicle insurance is to protect your fleet from unexpected damages.

7. Start the business

It won’t cost a lot of money to start a taxi business. Instead, you can start small by parking one or more taxis in your garage, which is a cheap place to start working. You can expand your business by adding a new garage to park a lot of taxis as you begin to expand and gain traction.

8. Hiring drivers

Depending on the backgrounds of the candidates, hiring drivers for your taxi fleet can be easy or difficult. There are a few things to keep in mind when you plan to hire drivers for the taxi company as full or part-time employees. 

To start with, it’s important to interview people properly and run background checks. Additionally, employees should be given a set of rules and ethics to abide by. This dictates the company’s integrity and that’s how anyone builds a customer base.

9. Layout your business

A number of prerequisites are needed to kick-start any business. For taxi service, no matter where it is, it is important to adopt certain software and technology. Set up GPS-based software that can locate drivers, connect them to dispatch, and give you central visibility of the vehicles. 

Software for customers could be downloaded by them and used over the internet or mobile networks to book taxis. It can also be used to get in touch with drivers, pay for services, and rate them. This not only keeps things transparent but also helps expand the business. 

10. Advertise & market it

Create a strong and recognizable brand identity for the taxi service. This includes creating a tagline that reflects your business’s values and distinctive selling point as well as selecting a colour scheme.

To advertise it, build a website and use social media platforms such as Facebook, Twitter, and Instagram to promote your taxi service. Post updates about special promotions, events, and discounts. Share customer reviews and testimonials to build trust and credibility.


If you’ve been contemplating how to start a taxi service in a small town, know that it’s not as tough as you think. Surely, starting any business requires a long-drawn process, but things can run smoothly if you have the correct knowledge. 

Research the local market to understand the demand for taxi services, and obtain the necessary licenses and permits. Then purchase or lease appropriate vehicles, hire reliable and experienced drivers, and set up a dispatch system to efficiently manage and schedule rides. 

It’s also important to develop a strong brand identity, establish partnerships with local businesses, and advertise and market your taxi service.

With the above-listed detailed steps, you can easily start and run your taxi service in a small town!

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