The taxi industry is one which can be both rewarding and lucrative so it is easy to see why so many people start their own taxis firms. There is one big decision that people must make when entering this field – is it better to go public or private with your taxi business?
What is the Difference?
So, what exactly is the difference between a public taxi and a private hire vehicle? A taxi has the license to pick people up on the side of the road. Whereas a private hire vehicle only has permission to pick people up who have arranged bookings – not just any person who is looking for a ride. It can take longer to become qualified to become a taxi driver because you need to have the knowledge, but this can bring many benefits.
Ultimately, it will come down to personal preference, but it is worth looking at the statistics which could guide you towards a decision. In England, the total number of licensed taxi and private hire vehicles (and licensed drivers) reached record highs of 285,400 in 2018. Interestingly, this is made up of 74% of private hire vehicles and just 26% taxis.
This suggests that the private hire vehicle market is somewhat saturated and fiercely competitive. Per one thousand people, there are 5.1 licensed taxis and vehicles offering private hire services, highlighting that the demand is still there.
It will depend on where you decide to operate because in London taxi availability is high and there is an above-average passenger satisfaction percentage of 70% compared to the national average of 67%.
This is why it is a smart idea to look at places that have a below-average passenger satisfaction percentage because these are the areas where it is difficult for people to get a lift. Rural areas are well below the UK average with a satisfaction percentage of just 60% so these could be good areas but you may struggle with less demand than in metropolitan areas (ideally the business will be set up where you can benefit from both).
Another important area to consider is wheelchair accessibility. 58% of licensed taxis were wheelchair-accessible (100% in the capital) while just 2% of PHVs were wheelchair-accessible in 2018. This is, clearly, a figure that is alarmingly low and any new private hire taxi firm should look into securing wheelchair accessible vehicles from places like Cab Direct.
If you are thinking of setting up your own taxi or private hire vehicle business then there is a lot to consider. While they may seem similar, the two are actually very different businesses and you will need to think carefully and consider key factors like location, wheelchair accessibility, and competition just to name a few.