Taxi Business

Is this scenario possible? let's say I have P400 K, i buy 4 2nd hand kia prides worth around 100K so i end up with 4 kia prides which i convert to taxis. daily boundary for a taxi is P500. assuming i let them run for only 20 days a month, that would be P10 K a month per taxi that would mean that i recover my P400 investment in 10 months. My deal with the taxi driver would be he would get the car free after 5 years. with my plan, i expect a return of P16 M GROSS after 10 years.

10 months Gross Profit New/OldTaxis Profit No. of Taxi x4
1 P400 K - P400 K 0 2
2 P800 K - P800 K 0 4
3 P1600 K - P800 K P800 K 6
4 P2400 K - P800 K P1600K 8
5 P3200 K - P800 K P2400K 10
6 P4000 K - P400 K P3600K 9
7 P3600 K - P400 K P3200K 8
8 P3200 K - P800 K P2400K 6
9 P2400 K - P800 K P1600 4
10 P1600 K - P800 K P800 2
11 P800 K - P0 K P800K 0

Total P17200K/P17 Million

if i only get 60% of the total that would still be P10320 K or P10 Million
i don't actually know if this is feasible. i think this would require a lot of determination and headaches, imagine taking care of 40 taxis at one time. That is a whole lot of car spare parts, accidents, and a really big parking lot. hehehe. just a plan i thought of yesterday. follow at your own risk. comments are welcome.



  • weapon_x11weapon_x11 close but no cigar PExer
    You'll be lucky if the 2nd hand Kia used as a taxi don't need maintenance after a month. You should take this into consideration. I think the taxi business depends so much on having a dependable taxi driver (i.e. marunong kumilatis if somethings wrong with the cab). Some (if not most) Pinoys kasi don't think long-term so binabawi nila kada labas ng taxi. Kung makakuha ka ng malas na driver - baka 1 month lang ang itagal ng Kia mo at lugi ka pa sa maintenance.
  • aticusaticus Laker fan for life ✭✭
    Don't forget to factor in fees such as insurance, registration, taxi meter inspection, etc.

    That, plus the cost of gas is very prohibitive, so factor that in too. :)

    Oh, and don't forget the bribes to police and other officials for "looking the other way" in case of violations. Those add up too. :lol:
  • blue[]ceblue[]ce Member PExer
    Hehe! I have to agree. I talked to some other people and they pointed out those things. I had an uncle who had 4-5 taxis and he said it was a real pain to handle that little number. It had something to do with random calls at night from ur friendly taxi driver telling you he got into an accident :) as for other figures, that would be the reason i only got 60% of the total profit because i alloted 40% for those miscellaneous expenses. Ah well, is the taxi business a good business venture or not?

    If I were the taxi operator, I would hire really good mekanikos to fix those cars, pay higher but hopefully you get value. my so-called insurance against my taxi drivers would be offering them ownership of the car after 5 years. hehe, kaso sigurado eh laspag na laspag na yan lalo :D

  • weapon_x11weapon_x11 close but no cigar PExer
    Try mo isang taxi lang muna so that you can have a feel of the business (extra cash lang gamitin). Tapos kung panalo, saka ka na lang sumugal ulit. I think the experience alone of being in the transport business is worth the relatively small risk. Also make sure na madaling kumuha ng piyesa para sa taxi model na bibilhin mo. :D
  • BadGiRLBadGiRL procrastination specialist PExer
    Hindi ba more than 1k ang boundary?
  • bagyoboybagyoboy Just do it! PExer
    Suggestion: On top of the daily boundary, set aside a certain "bond" for every driver, say P100 or P50, para maramdaman niya yung bigat ng maintenance - para ingatan niya ang taxi mo.
  • gumacaniangumacanian crock`0`shite PExer
    Never make calculations like the one in your first post!! They usually never come close!! Start with 0ne cab and the most trustworthy driver you can find..Preferably a family member..
    Run your cab for two months and recalculate...
    Let us know how you get on!!
  • blue[]ceblue[]ce Member PExer
    I am not actually planning to go ahead with this. i was just doodling around and thought of the idea. i am sure that it will not work in the real world, only in my make believe world where cops are not corrupt and the traffic does not exist =) Anyways, thanks for the inputs. I posted this here in pex just to remind myself and others that there is a way to get rich. you just have to find it and work hard on it. when i find mine, ill tell you guys =) Till then, ill be stuck doodling some other ideas. hehe.

    on a personal note, i sincerely believe the taxi business is not quite bad. i would want to be the taxi king of the world!!! :D
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    Originally posted by gumacanian
    Never make calculations like the one in your first post!! They usually never come close!! Start with 0ne cab and the most trustworthy driver you can find..Preferably a family member..
    Run your cab for two months and recalculate...
    Let us know how you get on!!

    Now this is the kind of growth plan I can agree with. Sometimes getting rich is a matter of preventing yourself from getting poor.
  • muff_puffmuff_puff Member PExer
    My budget is 120k..I'm planning to buy a second hand Toyota XL taxi with franchise and line already. Can you please help me what are the things I need to know about this business? Like how much should the boundary be, what are the good car brands? (I saw second hand Kia and Daewoo Racer and Espero taxis that cost only 50k..I thought of buying 2 initially but our mechanic advised they are not good brands :( )..To those who are already in this business, tips and advices please? Thanks! :)
  • mitch888mitch888 Member PExer
    im planning to have a taxi business and i really dont know it yet if its good or what. so please if u have some advice there it wud b a great help. pls email me [email protected]
  • w_boyw_boy Member PExer
    Mr. mitch888,

    Based on a relative's experience, a taxi business will have a very good chance of working ONLY IF either you or a trusted friend/relative will drive the cab. If not, you'll be in for a rough time.

    You can make the mental calculations pero if what I suggest above is not possible, brace yourself for all or any of the following expenses/costs:
    1. Regular maintenance
    2. Repairs due to wear and tear of parts
    3. Repairs due to accidents
    4. Financial losses resulting from an untrustworthy driver's misconduct
    5. Replacement of supposedly stolen car accessories or parts (stereo, tires, radio, etc.)

    It's quite a difficult business to get into because it requires a significant amount of capital. Unless you or a trusted person will do the driving, the chances of earning a good return from this investment may be quite low.

    I do not mean to discourage you but I just wanted to share what my aunt experienced when she had this business. Needless to say, she discontinued this business about 2 years ago. Please don't take this to mean that I'm stopping you from engaging in this business. My advice is if you decide to proceed with this business to just proceed with a lot of caution. Regards.
  • ron_pacmanron_pacman Member PExer
    ok yan ah!!! pero 1k ata boundary per day e..
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  • alyssafoxalyssafox Geisha PExer
    hi to all

    im planning to have a taxi business
    maybe 1-2 taxi first just to try

    what if i buy a new car to make it a taxi,
    kelangan puti ang kotse?

    does anyone here the process of starting a taxi business/francise?
  • I agree with the posters here saying that it's a difficult business to get into. "Difficult" = sakit sa ulo due to problems with the driver, repairs, maintenance, etc...

    When I was younger, my parents operated a small taxi business on the side (3 units). After 3-4 years, they closed it down. I can't really comment on how they managed it (I was too young to know then), but they always kept on saying "ang sakit sa ulo ng repairs and dishonest na mga driver."

    Aside from those problems (and all the other problems mentioned above), anyone wanting to get into this business should know the state of the industry right now. Is it over-saturated? How are the current taxi owners doing (business-wise)? I don't have any figures to back it up, but it is very much possible that the industry as a whole may be declining (declining numbers of people taking cabs - may be due to the MRT/LRT, hence declining profits for owners).

    But nevertheless, if one were to decide to get into this business, economies-of-scale would be provide substantial benefits.

    Imagine if you had a fleet of 150 units:

    1. Overhead costs (e.g. administrative costs) would be significantly lower;

    2. Having an in-house repair and maintenance team (including a tow truck) would be very economical (the cost savings in repairs would be tremendous);

    3. Bargaining power with suppliers - you'd probably get a VERY BIG discount in purchasing the units, and also in procuring parts for repairs;

    I think the best thing to do would be to interview current owners of taxis / taxi fleets and ask them for inputs.

    If you find out from them that it's a business that they're just continuing because they're already in it (and they would really want to get out of it if given the choice), then don't don't start it at all.

    Better to do this than invest your hard-earned cash and regret it in the end.

    The taxi business can be likened to a commodity in the sense that people aren't really aware (nor do they care) about taxi companies (or brands). They're essentially all the same. As long as a taxi looks ok, they don't really have qualms about riding in them. But unlike commodities (where pricing is the main factor where companies compete in), pricing is the same for all taxis (unless "de-contrata" yung pagsakay mo).

    There is essentially no differentation between taxis. The "best" taxi companies just work on increasing efficiency (lower down time), thereby increasing revenue. They also focus on achieving lower costs (mainly through economies of scale) and thereby increase their profits. Some may be focused in promoting a culture where the driver feels a higher degree of "ownership" in the business (through a sound system of rewards and punishments) which of course translates to better performance of the company as a whole.

    Given this, my brother and I were recently talking about how we could innovate or provide additional value to this line of business.

    People view taxis as just a way of getting from one place to another. But what if you could put up a company that differentiates itself from the rest of the pack by "offering something more."

    It is entirely possible to come up with "high-end" taxis (that don't charge more - because they CAN'T) whereby the cost structure of the business doesn't radically change but the offering can be something really different. Additional value can be offered without significantly increasing costs. Riding in "that" taxi then becomes more than just a way of getting from point A to point B, but it becomes a "pleasant experience" at no additional cost.

    Some differentiation factors that I can think of are in areas such as music (played inside the taxi), courtesy (from the driver), and cleanliness of the taxi cabin.

    Obviously, market research has to be conducted and a more thorough analysis has to be done. But I believe that there is some potential in this endeavor.

    To those planning to put up a taxi company: I wish you the best!

  • alyssafoxalyssafox Geisha PExer
    thank you so much for the info
    very helpful and i really appreciate it

    actually yung brother or my brother in law will be the driver of the taxi
    gusto ko kasi sana magkatulong sa kanya kumita and since di masyado maganda yung job nya

    at since i always work abroad so wala akong masyadong time for other business.. im confused now what kind of business is good for me :confused:
  • jhun101jhun101 Member PExer
    Just for clarification...

    Is having FX taxi better than sedan taxi?

    Marami kasing nagsasabi na mas maganda ang kita ng ganon... cuz instead of using ur meter u'll charge each passenger..

    wat do u think?

    pero syempre mas prone sa huli..... hehehehe
  • esep esepesep esep Member PExer
    Interesting thread :-)

    Say I want a brand new unit, would anyone know what are my financing options?

    Appreciate replies.
  • KirhatKirhat Member PExer
    Check out the article on how to operate a taxi business in this blog:

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