Do you want to start a taxi business with one car in Dubai? If YES, here is a complete guide to starting a taxi business in Dubai with no money or experience.
Dubai is one of the cities in the world that attract a high influx of visitors all around the year. For this reason, a taxi cab business is indeed one profitable business one can start in the city. So, if you are contemplating starting a business in Dubai, then you should look towards starting a taxi business.
The truth is that taxi is a profitable and easy to start business not just in Dubai, but in any city in the world. With comfortable taxis, the right location, top-notch service and good marketing, you can serve a lot of customers who require taxi services.
It is important to note that starting a standard taxi cab business with over a handful of taxis and drivers needs significant capital investment, solid planning, and attention to detail in order to keep your business profitable.
If you are serious about starting a standard taxi cab company in any part of the world, you are expected to have done your feasibility studies and market survey before committing your capital in the business. If you have been tinkering with starting your own taxi cab company in Dubai, but do not know how to go about it, then you should consider going through this article; it will give you the needed direction and information.
Steps to Starting a Taxi Business With One Car in Dubai
1. Understand the Industry
Taxi services business is grouped under the transportation, logistics, and storage industry in Dubai and the industry is made up of passenger transportation, cargo transportation, warehousing, freight forwarding and other value-added services for cargo.
Recent studies show that the United Arab Emirates is ranked number one in road infrastructure worldwide. Passenger transportation has assumed great importance due to the growing population. The Roads and Transport Authority’s (RTA) goal is to boost public transportation in the city to deal with this issue.
While the Metro (the most widely used form of public transport) and tram are expected to become the most convenient options for city travelers, the future focus is on integrating the entire transport network.
The report shows that the number of taxis in Dubai has grown at a CAGR of 6 per cent between 2012 and 2016. While this has added to pollution levels, the RTA also has plans to introduce hybrid taxis and convert at least 50 per cent of its taxi fleet to hybrid engines. For example, in 2016, the DTC lifted about 94 million riders compared with 92 million riders in 2014.
Also in 2015, the DTC posted that the total profits amounted to AED280 million after deducting franchise fees paid by the DTC to Public Transport Agency against plate fees, and booking and distribution fees among others. While in 2014 the DTC recorded AED 270 million in total revenues.
The global Taxi and Limousine Services industry has experienced remarkable growth in recent time. The growth of the Dubai (UAE) economy has indeed directly benefited the industry as business expense accounts have grown and clients have been more willing to spend on small luxuries such as taxi and limousine rides.
In addition, increased demand from corporate travelers, tourists and private households is expected to result in steady growth for this industry.
Please note that when it comes to advertising your taxi cab services company, there shouldn’t be any limit to how far you can go.
You could start with handbills and distribute them in airports, corporate organizations and public places. If you have the cash, you can place adverts on Newspapers, TV and Radio, and if you don’t have enough cash, you can start with the worldwide web. As a matter of fact, the internet has become one of the cheapest and most potent advertising platforms.
Some of the factors that encourage entrepreneurs to start their own taxi business is that the business is easy to set up and it is a thriving and profitable venture that an entrepreneur with enough startup capital can set up.
In summary, starting a taxi services business in Dubai is just the way to go because the city is built in such a way that you will not struggle to attract customers and you can break even in record time. This is because all over the world, the business is enjoying good patronage particularly if they have comfortable taxis, professional drivers, if they are well positioned and if they know how to reach out to their target market.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of a taxi company in Dubai is all encompassing and is not restricted to any particular group of people or gender.
3. Decide Which Niche to Concentrate On
Depending on the level you intend operating, you have the option of running a one-man taxi business, a standard taxi company with several drivers and taxis, and you can also run a taxi cab company that leverages on software apps and freelance drivers just like Uber. Dubai is indeed very open to any niche idea in the Taxi and Limousine Services industry.
The Level of Competition in the Industry
Let us clearly state that the level of competition in the taxi business in Dubai is tough because Dubai is a city that is open to all niche ideas in the taxi and limousine services industry. To add to that, Uber has active presence in the city of Dubai and you must be ready to compete with them alongside other topflight taxi companies for the available clients.
The bottom line is that if you are ready to start a taxi business in Dubai, then you must come up a workable marketing plan that will help you attract customers and keep the business profitable.
4. Know Your Major Competitors in the Industry
It is only but natural that in every industry, there are always brands that perform better or are better regarded by customers and general public than others.
Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. Here are some of the leading taxi services companies in Dubai;
- Metro Taxi Company LLC
- Uber Taxi
- City Taxi Company
- Dubai Taxi Corporation
- National Taxi
- Avis Chauffeur Drive
- Union Taxi
- One – Road Taxi LLC
- Uptown Mirdif Taxi Stand
- Citi Taxi LLC
- Private Limousine LLC
- AL-SAFAR RENT A CAR L.L.C
- Presidential Transport by Luxury Vehicles LLC
Economic Analysis
Dubai is one city that is known for its fast growing economy, and no matter the business you are operating in the country; you must be ready to adopt to the ever changing factors that influence the performance of businesses. In order to successfully start and run a taxi business in Dubai, you must be able to spend money to acquire standard and comfortable cars.
You should be able to meet the standard requirements as stipulated by the regulatory body and you should be able to maintain an office, parking lots and a workforce. These are factors you should pay attention to when working on your economic analysis.
The bottom line is that in order to get things right, you are expected to hire experts that will help you with a comprehensive economic analysis. If you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you want to start a taxi services business in Dubai, you would have to start from the scratch because there is no known taxi company that is into the sale of franchise. Besides, the nature of the business does not permit franchising except you want to work as a freelance taxi driver with your car under Uber or another taxi service companies.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own taxi company in Dubai, one of the major challenges you are likely going to face is the presence of well – established taxi companies, e- hailing taxis, and other form of executive transportation services who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.
Some other threats that you are likely going to face as a taxi services company operating in Dubai are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn which usually affects purchasing / spending power.
There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you are considering starting a taxi services business in Dubai, the legal entity that is open to you will be determined by your status (citizen or visitor) and the capacity of the business you intend starting the city. There are various options available in UAE for Investors.
The Investor can opt for either Mainland License or Free Zone license. In Dubai, Mainland LLC formation falls under Commercial category and can be formed with a minimum of Two shareholders or a maximum of 50 shareholders in the license.
The liability of the shareholder is limited to the shares invested in the company. In this license, the 49 percent shareholders will be an Expat and 51 percent shareholder can be a Local Emirati.
These are some of the factors you should consider before choosing a legal entity for your taxi services company in Dubai; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.
Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business. If you are considering starting your own taxi services company, here are some catchy names that you can choose from;
- Emirati Connect© Taxi Services, LLC
- Al National™ Taxi Services, Inc.
- Dubai Emirate® Taxi Services, LLC
- Executive Taxi Services, Inc.
- Your Taxi Services, LLC
- Arab Network® Taxi Services Company, Inc.
- Green Taxi Services, LLC
- Alpha Plus Taxi Services Ltd.
- Alfa Bin® Taxi Services, Inc.
- Emirate Brothers© Taxi Services, Inc.
- United Services® Taxi Services, Inc.
- Dessert Warrior®Taxi Services, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United Arab Emirates (Dubai) and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your taxi services company.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own taxi services company in the city of Dubai;
- General insurance
- Motor vehicle insurance (comprehensive insurance)
- Health insurance / Medical insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own taxi services company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your software app, your company’s logo and other documents that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the appropriate authority in Dubai.
11. Get the Necessary Professional Certification
Please note that you can successfully run a taxi services company in the United Arab Emirates (Dubai) and in most countries of the world without necessarily acquiring professional certifications as long as you have acquired the required skills to build and manage the business.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in Dubai cannot be overemphasized. It is a fact that you cannot successfully run any business in the city of Dubai without the proper documentations.
If you do, it won’t be too long before the long hand of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own taxi services company in the city of Dubai;
- Business and liability insurance
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Copy of your passport (Notarized)
- Residence proof which includes 2 telephone and utility original bills which are not older than 3 months
- Reference letter from Bank in English / Original Bank Reference Letter
- Insurance Policy
- Online Terms of Use
- Online Privacy Policy Document (basically for online payment portal)
- Company Bylaws
- Memorandum of Agreement (MOA) & Notarization (On receiving Initial approval, the MOA needs to be drafted in English & Arabic and get it notarized from Dubai court)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
If you are considering starting a taxi business in Dubai, you must be ready to spend money because if your taxi cab is not measuring up with other cars, you will hardly attract clients hence the need to spend money in acquiring the latest cars that are used for taxi business in Dubai.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your taxi services company in Dubai;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grant and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and friends.
14. Choose a Suitable Location for your Business
Choosing a location for a taxi services company Dubai can be in two phases. Firstly, it must be located in a city that has need for such services and also in a city that has good road network. So also, you are expected to secure administrative office in a visible and busy location.
Indeed, location has great influence on the success of your taxi services company. If you have taken your time to study the taxi and limousine services industry, you will realize that players in the industry are willing to pay expensive rents in order to stay in a metropolitan city; a place where business and financial activities are at its peak.
It cannot be overemphasized that the location you choose to open your taxi services company in Dubai is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and organizations with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for a business such as taxi services company in Dubai, then you should feel free to talk to a business consultant or a realtor to help you out.
15. Hire Employees for your Technical and Manpower Needs
If you want to run a taxi services business, then you should be ready to build an effective taxi or transport and logistic software app that can stand the test of time and is compatible with all internet enabled devices. You will also need car tracking devices, computers/laptops, internet facility/server room, telephone for your call center, fax machine and office furniture (chairs, tables, and shelves) amongst others, and all these can be gotten as fairly used.
When it comes to choosing between renting and leasing an office space, the size of the taxi services company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard taxi services company, then you should consider the option of leasing a facility.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Accountant, IT Specialists, Business Development Executive / Marketing Executive, Transport and Logistic Manager and Customer Service Officers or Call Center Executives and Taxi Drivers. You would need a minimum of 15 to 35 key staff to effectively run a medium scale but standard taxi services company.
The Service Delivery Process of the Business
If you are making plans to start a taxi services business in Dubai, then you should look at what is obtainable in the city in terms of service delivery. Basically, a taxi services company gets customers via online bookings, via special arrangement by hotel and tourist companies and by flag down on the road.
Customers are charged based on the distance they travel and they can either pay via their credit card or with cash or even mobile money transfer. But if they are executive clients, the organization hosting them will be responsible for paying whatever charges they accrue throughout their stay in the city of Dubai.
It is important to state that a taxi services company may decide to improvise or adopt any business process and structure that will guarantee them, good return on investment (ROI) efficiency and flexibility; the above stated business services process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
As a taxi services company owner, you would have to prove your worth over and over again before attracting high profile clients.
So, if you have plans to start your own taxi services company in Dubai it will pay you to build first build a successful career in the industry either as a support staff or a taxi driver. Here are some of the platforms you can utilize to market your taxi services company;
- Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, hotels, travel and tour companies, households and international business community in the city of Dubai.
- Advertise your business in relevant transportation magazines, radio and TV stations
- List your business on local directories/yellow pages
- Attend international transportation expos, seminars, and business fairs et al
- Create different packages for different category of clients in order to work with their budgets
- Leverage on the internet to promote your business
- Join local chambers of commerce and industries around you with the aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing
17. Develop Iron-clad Competitive Strategies to Help You Win
The taxi and limousine services industry is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to operate safe and affordable services.
Another strategy that you can adopt is to ensure that cars under your platforms are of great shape and drivers under your platform are highly professional and friendly. You can also offer free training for all the drivers that sign under your platform.
18. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your services delivery, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why clients source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also attract new customers.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secret of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
If your intention of starting a taxi services company in Dubai is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your business.
Below are the platforms you can leverage on to boost your brand and to promote and advertise your taxi services company in Dubai.
- Place adverts on transportation magazines and related newspapers, radio and TV stations.
- Encourage the use of word of mouth publicity from your loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote your business.
- Ensure that you position your banners and billboards in strategic positions all around your city
- Contact corporate organizations, hotels, travel and tour companies, households and international business community et al and also car owners with cars that meet your specifications who may be willing to use their cars as taxis by calling them up and informing them of your taxi company and the services you offer
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your official cars and ensure that all your staff members wear your branded shirt or cap at regular intervals.