Albert Adam
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Albert Adam Posted on : Insider Community

Legal Requirements For Running A Taxi Business


When setting up your taxi business, there are many things you think about. Not only you have to worry about the obvious steps - such as hiring drivers and buying vehicles, you also have to consider legal requirements which you need to follow, as well as insurance. In this article, you'll find more about what you'll need in order to set up your taxi firm.

Picking A Location

Make sure your taxi headquarters are in a good location, since this can make or break your business. If you'd like to target walk-in customers, set up the office in a public place in which there'll be plenty of passers-by. An example of a good location is an out of town supermarket which is hard to reach through public transportation.

Another option is opening a headquarters where you simply answer the phone and delegate jobs to the drivers. This way you'll have a lot more freedom in selecting your office's location. If you'll be using two-way radios to communicate with the drivers, choose an office in a strategic location, preferably high up - since the location of the office will determine the range at which drivers can communicate. Picking a location which is surrounded by buildings will give you a range of of about 4 miles, while one at the top of a hill could give you over 20.

Taxi Driver Licences

Before running the taxi business, you'll need to apply for an operator's license. This is a document which proves you're an official taxi driver - it can be obtained from your local council. Usually, there are two types of licence to apply for:

A 'private hire' licence, which allows you to carry only pre-booked jobs. It's the best choice if you operate from a location which does not encourage passing trade.

A 'hackney' licence, which allows you to pick up customers off the street as well.

Local authorities often impose rules which determine the sort of vehicles which can be licenced, as well as their colour and age - so it's important to check the rules in your are before buying the vehicles. Usually, the drivers will need to be licensed as well, by a local licensing authority.


It's very important that you take taxi insurance into account as well suggests Ian Beevis of taxi insurance provider Multi Quote Taxi Insurance. When running a taxi company, not only it's a very good idea, but it is a legal requirement as well. At very least, you want road risks as well as public liability insurance, but it's a good idea to choose a more extensive one in order to make sure your business is protected in other areas as well. As you'll employ drivers, you'll also need to get employee's liability insurance, protecting them if they happen to be injured at work.

When operating from your premises, you may also want to take premises insurance, in case your business is disrupted by theft, a fire, or other types of damage. If you're operating from home, though, you're allowed to use it only as a base station - if drivers will come back to the house in between the jobs, the business will need its own premises - this requires planning permission.