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App Development

How to Start a Taxi Business in India?

written by Nitin Garg | Apr 03, 2023
taxi app development company

With ongoing technological advancements, the taxi market is buzzing all around the world. The ever-increasing demand for the taxi market has led the taxi business to grow by leaps and bounds. With the emergence of taxi giants like Ola, Uber, and Lyft, anyone in any corner of the world can now hail a taxi from their smartphone. This massive paradigm shift from traditional taxis to the taxi-hailing model is very profitable and has urged entrepreneurs to invest in this lucrative industry. 

One of the most prominent questions investors are asking is “How to start a taxi business in India?” Are you also looking to invest in this lucrative industry and enjoy hefty returns? Fret not, this blog will provide an in-depth guide on how you can start a taxi booking business and provide information on a cab business plan in India. 

What Seeks You to Invest in a Taxi Business Plan?

Today advancement has changed the way we commute in our everyday lives, be it for short routes or long routes. These days we are looking for a taxi that picks us up from our desired location at affordable costs. 

India is a land of optimistic approach as India’s approximate population is more than 1.4 billion, which provides great potential and a huge opportunity for the taxi business. 

Online Taxi Booking Business has significant growth as it works as a market aggregator, it’s like a pool of people providing the services with their own cab under one particular brand name. OLA and Uber’s enormous success has revolutionized hope in every young aspirant’s life. It brings a perfect market opportunity to aspire to young talent to get things done and how to start a taxi-hailing business in India that gives you immense growth. 

In a taxi booking business, Chauffeurs are as important as customers. Because they are the ones who play a vital role in the success of a taxi booking business, they are the one who serves the customers and are responsible for customer satisfaction. So to make sure they work efficiently, you need to provide the resources and tools to run your business efficiently. 

Hire a reputed taxi booking app development company that caters to all your business needs and helps you grab the attention of millions while providing impeccable taxi booking app development solutions.

Providing them with an application would be the first step in progress. Like your customers, drivers also need an application for some tasks like accepting/rejecting bookings, locating a location, taking payment, etc. You can hire a taxi app developer to develop an application for your drivers’ team. 

According to a survey conducted about taxi app usage across India in September 2019, surge pricing was the biggest issue for a majority of the respondents, at 39%. App-based taxi services have become an integral part of daily commutes for Indian citizens. (Source)

Market Statistics of the Taxi Booking Industry

India’s Taxi Booking Business is in the hold of two dominant players in the market. Ola and Uber, both cabs, are trying their best to battle out for market share. In countries like India, Taxi booking app usage is in merging mode; it is still in metro cities and big cities, and people in small cities and towns are using local taxis and other non-mobile services. 

India’s Taxi Booking App Revenue

YearTaxi App Revenue
2015$3.8 billion
2016$5.3 billion
2017$6.3 billion
2018$6.9 billion
2019$7.5 billion
2020$3.7 billion

Corresponding to the US, India has been hard-pressed to find revenue from its massive user base. While most of the taxi industry remains off-the-books, Uber had to implement cash payments to gain market share against Ola Cabs. 

While not as large as China, India is rapidly gaining traction as more populace comes online. Ola and Uber are becoming commonplace in major cities while still unavailable in large parts of the country.

>>>Read More: Key Features and Development Cost of a Taxi Aggregator app like UBER<<<

Features of a Taxi Booking App

Here are some emerging and unique features of the taxi booking app that are integral in offering an enhanced user experience to users as well as drivers. Let’s take a look- 

Feature of Taxi Booking App

User Panel Features

Features Description
User OnboardingIt is important to provide a simple user interface where users can register and log in to the taxi booking app without any hassle.
Booking InterfaceUsers are able to book a taxi from the booking interface without any hassle.
GPS TrackingAn API is integrated into the taxi booking app which shows real-time GPS tracking in the taxi-hailing app. 
Cab TypeUsers can choose which type of cab they want to ride in. Some options include Bikes, Autos, Mini Taxis, Sedans, and SUVs.
Pick-Up and Drop LocationUsers can choose the pickup and drop location for ease of convenience.
Estimated Ride FareAn estimated ride fare is calculated according to the distance and traffic of the route you have selected.
Live TrackingThe users can also track the live location of the driver before and during the ride.
Payment GatewaysSafe & Secure payment gateways are integrated into the taxi booking app so users can make payments without any hassle.
In-app MessagesUsers can connect with the driver through the in-app messaging and call feature and coordinate with the driver accordingly.
Ratings & ReviewsThe users can rate their rides and drivers according to their experience. 

Driver Panel Features

Driver OnboardingA simple user interface where the driver can register and login into the application. 
Driver ProfileAll the personal details about the driver are listed in the driver profile including identity verification.
Ride AlertThe driver gets a notification whenever someone books their ride through the app.
GPSThe driver has real-time location services in the app so they can reach the users without any hassle.
DashboardThe dashboard functions like the home screen of the app where the driver can monitor and manage all the rides.
Push NotificationsDrivers receive push notifications whenever a user books or cancels a ride and other application functions.
Ride FareA ride fare is shown to drivers according to the distance and traffic of the ride. They can either choose or decline the ride. 
Booking HistoryAll the rides the driver has completed can be monitored by the booking history feature. 

Read More:- Everything You Need to Know about On-Demand Taxi App Development

How to Start a Taxi Business in India? Step-by-Step Guide

In order to learn how to start a taxi business in India, we must follow a step-by-step guide that allows us to streamline the whole process. Let’s take a look at the steps to start a taxi booking business in India. 

Start a Taxi Business

1. Choose Your Business Structure

First and foremost, you must decide on your taxi booking business structure. The business structure majorly affects various characteristics of your cab business plan including documentation, taxes, and legal responsibility. You can have your company registered from any of the following options- 

  • Private Limited Company
  • Public Limited Company
  • One-Person Company

2. Purchasing Cars and Taxis

If you take a look at your jurisdiction’s rules, you will realise that starting a taxi business in India is an arduous and time-taking process if you don’t have the necessary vehicles. Budgeting is also a very important part of your business as buying a number of cars is quite expensive. A business loan can be viable to acquire the funds to buy additional vehicles. Moreover, in a country like India, you have to ensure that the vehicles are commercial and economically viable. 

3. Important Registrations and Licenses

The next step is to acquire important licenses and registrations that are integral to a cab business plan. 

A. Driving License

It goes without saying, that you will require a driver’s license if you want to demonstrate your ownership and competency in driving a car. Moreover, if the vehicle is being used for commercial purposes, you will need a commercial license that is different from a regular driver’s license. In India, RTO is the governing body that issues driver’s licenses throughout the states. ‘

B. Registration with RTO

You will have to register your vehicles with the Regional Transport Office to drive your vehicle on the road. It is required that the vehicle must be registered within 7 days of purchase according to Section 39 of the Motor Vehicles Act, 1998. Driving an unregistered vehicle will make you liable for a fine of up to Rs.2,000. 

C. Fitness Certificate and Insurance

Every vehicle in India must possess a valid fitness certificate that states that the vehicle is fit to be driven on the roads. Also, third-party insurance should also be purchased for the cars. In case of an accident, third-party passengers are protected by third-party insurance. Moreover, it is also important to insure the cars to cover your losses in case of a breakdown or accident. 

4. Apply for GST Registration

Taxi services like Ola and Uber are taxed under the GST Act in India. Moreover, popular taxi aggregators like Uber and Ola are subject to GST when they offer services to users. If you want to start a taxi business in India, you will have to apply for GST Registration. 

5. Market Your Business Online

In the current era, all kinds of services are available online. Taxis are also being booked online through Taxi aggregator apps. If you wish to set up a taxi business plan in India, you must have a strong online presence. You can build a website to take your business online but make sure to have a Trademark Registration to protect your branding. Once you have finished building your website, you can use SEO or PPC to divert traffic toward your website. 

Read More:- Taxi Booking App Solutions For Your Business- A Detailed Guide

How Much Does it Cost to Start a Taxi Business?

Taxi businesses can be counted on to grow leaps and bounds, but not all are that lucky or aware of the nitty-gritty of the business. There are a few points that need to be well aware of before starting a business and about how much it costs to start a taxi business.

Registration: Getting your business registered in India is a vital way to play it safe from all kinds of fraud and miscellaneous activities in the future course of action. Getting a licence can vary your costs as per the need, the behaviour of your business, and the business’s location.

App development: The overall development costs of the taxi booking app are directly proportional to the app’s features with core values.

Licensing: To get proper licensing, a user needs a license to be registered under LLP or any other desired public or private entity. The cost of getting a license is generally value for money.

Integrated with offline vendors: Before starting any business, collaborate with other offline taxi vendors to use their vehicles under your business. Users need to pay a certain amount of money to collaborate with local taxi vendors. 

Hire Drivers: Hiring a driver for the full time required a large amount to run the business more effectively. 

These initial costs can determine your taxi business’s fate; the overall costs are revolving around multiple factors above mentioned. While estimating how much it costs to start a taxi business, it can be around $25,000 to $30,000 with the availability of cars that can easily fulfil customer requirements. Starting a taxi business remains a feasible option that holds great potential in this leading market. Proper cost, effective strategies and other adaptive plans lead to imperative opportunities for successful taxi business growth

Read More:- Taxi App Development: All The Steps You Need to Know

Funding Options for Your Taxi Business

A Taxi business is the most profitable business of all time, be it online or offline. But if we take a look at reports, any business fails in the first year of operation in a few months and the reason behind it is the lack of funds. 

Let’s take a look to know how strategically you can raise capital for your business and generate revenue to run and provide valuable services to our customers.

1. Bootstrapping 

It is a great option for those who want to build their own business with their funding or savings. Bootstrapping can be a way of using your own savings to start your own business and incur all the expenses on your own.

Bootstrapping amounts can be taken by yourself, your family, friends or your close ones to start your business at the initial point of your startup.

2. Crowdfunding 

Crowdfunding is like taking a loan or contribution to your idea before starting or at the starting phase of your business. These kinds of businesses have become the prime source for young entrepreneurs to get their dreams accomplished from one or more entities’ funding or investment at the same time. 

Crowdfunding is a competitive place to get funding. To get the job done, one must need to give detailed information and ideas about their taxi business with core functionality and the respective USP of their services. If all goes well with your ideas to prospective investors, you will get the funding to enhance your business. 

3. Angel Investments 

Angel investment is nothing but an investor who is willing to invest in your top business  startups; these individuals have surplus funds and are willing to invest in emerging startups with a good business idea and mindset.

Google, Yahoo, and Alibaba are also part of angel investment to help these prominent companies run. Angel investors are willing to take risks for a better return in the future course of time. 

4. Incubators and Accelerators

Everyone needs a shelter that protects any individual or business during their weak days. Like shelter incubators and accelerators, it works as a core aspect for a business to grow and nurture in the upcoming days. Incubators are like mentors and investors, who advise, help and provide assistance during the initial phase. While accelerators are like micro things that give you support in a small way but work in the same way but in a less portion.

Read More:- Uber Like Taxi App Development Cost & Features: A Detailed Guide

Final Words

The taxi aggregator industry is rapidly growing, so investing in taxi app growth is a wise move. Travelling by taxi has become a lot more affordable since the introduction of taxi booking apps, compared to when these apps were not available. These are popular because of the low rates, instant bookings, and large variety of cabs. 

If you want to develop a cutting-edge taxi booking app, BR Softech can help you streamline the process. Our developers utilise their in-depth knowledge and expertise to develop cutting-edge and feature-rich Taxi booking applications that have the potential to attract millions. 

Quick Contact Us : 

Call/WhatsApp:  +1-650-727-6690+91-998-220-1414



Frequently Asked Questions(FAQs)

Q.1 What is the cost of developing a taxi booking app?

The cost of developing a taxi booking app is influenced by factors such as features, location of the developers, tech stack, etc. On average, it takes around $20,000 to $25,000 to develop a taxi booking app. 

Q.2 Is it profitable to invest in the Taxi hailing industry?

Yes, the taxi business is booming right now and it is very profitable to invest in the taxi industry right now.

Q.3 Do you provide customized taxi Booking app development solutions?

 Yes, we offer completely customized taxi booking app development solutions that are tailored to our client’s requirements. 

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Nitin Garg

I am Nitin Garg Founder of BR Softech PVT LTD - an Award-winning mobile game development company. We are armed with 180+ geeks & 2753 clients worldwide, I have driven by the spirit of entrepreneurship and dream to build a billion-dollar-company.

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