Long-distance operators can earn R37,000 in profit a month. The average taxi fare for the route is around R16 a trip. Taxi business owners can range from $30,000 to $100,000 per year. Expenses include vehicle maintenance, fuel costs, insurance, licensing fees, advertising, and employee wages. Taxi drivers are self-employed. They earn money by charging passengers. Most taxi drivers pay for their own fuel. Profits depend on location, fleet size, expenses and market conditions. Urban areas offer more earning potential with high demand. Working hours directly affect earnings. Startup costs range from $3,200 to $7,400. Costs include a vehicle down payment and signage. Fare rates vary but usually include a flat base charge, a charge per mile, and an hourly wait time rate. Profit margin after fuel and insurance is about 80%.
On the route between Johannesburg to Durban (595km), the average profitability is R37,000 a month – an increase of R2,000 from 2018.
You may choose to purchase new or used vehicles or lease your vehicles on a monthly basis. Selecting the right locations for both storing your taxi fleet and identifying hot spots for operation is crucial for the efficiency and profitability of your taxi business. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business. Personal: Self-fund your business via your savings or the sale of property or other assets. Bank and SBA loans are probably the best option, other than friends and family, for funding a taxi business. The taxi industry is labour-intensive: annual revenue per employee is about $70,000.
How profitable is a taxi business?
- It can be profitable. Working as a taxi driver can be extremely profitable. If you set up a taxi business whereby you hire other taxi drivers, this could result in high profits, as you will likely take a significant cut of their earnings or charge them a set fee. Owning a taxi business has high-income potential.
How does a taxi driver make money?
- They can get paid in two different ways: either by a percentage (usually about a third) of the gross fares, or by renting the cab by the day or week and paying all fuel costs. If they rent, it is usually about $100 per day for their cabs plus fuel.
How much do taxi owners make?
- The typical annual salary of taxi and chauffeur drivers in the United States is $30,000. Taxicab company owners make far more than their drivers do.
The Lucrative Business of Taxi Companies: How They Make Money.
- Companies generate revenue through fare splitting, leasing, terminal fees, and additional services. Proper fleet management, vehicle maintenance, fuel efficiency measures, and favorable insurance/supply rates can reduce costs. There are expansion opportunities in the global taxi and ride-hailing market to reach $330 billion.
Key money-making factors for taxis:
- Fares and tips from transporting passengers
- Value-added services like parcel delivery
- Advertising/brand partnerships
- Leasing or renting vehicles to drivers
- Fare splitting with leased/rented drivers