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How to Start a Taxi Business in India?

14 May 19  

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a girl calling a taxi from the road

The online taxi industry in India has been a huge success story, Indian taxi market has got the potential to help your taxi management to be more profitable and attractive. It is all about how you place your resource and get the best out of it. This won’t be a hard task since this is a quickly emerging market in India.

Online taxi business is simply a lucrative business that involves transporting passengers from one location to another with the help of a taxi dispatch software. The best thing about this online taxi dispatch solution is that you don’t need to be a specialist in the transportation field before you begin this kind of business. You have to comprehend and look into this industry to have the capacity to know the competitiveness of this business and needs of the public. 

So, for those eager to venture into the taxi business, here is a detailed report on how to start a taxi business in India.

Market in detail

This is an open and ever-growing market since the price of the fuel and mode of public transportation is not satisfying the public. Online taxi market in India is vendor driven with moderate barriers to entry into the market.

The scope of the market

When taking a look at the big picture, the market looks very crowded, however, the market is very flexible for new entrants. You should have a niche before starting taxi software solution business since it is a mature market. When compared with recent years, there has been an increase of 25% in the taxi fare in India. There are more chances for such businesses to be successful in a city than in rural areas.


Since this is one of the most flexible businesses in India, you can hire good human resources or hire or lease out taxis on a percentage basis from drivers who already own taxi. All you need is an online cab dispatch software to manage the booking and an admin to manage the services. However, you would need a large open space to accommodate all the taxis.

Return on investment

On a general basis, you would have to spend a major amount on spacing. It would cost considerably a huge amount of startups. The expense would be much higher in the initial stages. The best way to tackle this situation is by providing the drivers with a percent based compensation. This may take time to bring your business to the right track but would certainly help to increase the profitability of the business on a long-term basis.

Growth in the Market

By offering excellent services, you can avail 40% of the market share within the first few years. There are success stories of well-established online taxi dispatch systems who have poured more than 600 crores into their business. The primary thing to do is to market your services to commoners. Fulfilling the needs of the existing customers is the primary element of profit in this business.

Another thing to consider is to provide a subtle but resourceful HR. You should always try to improve the interaction between the drivers and customers as this would improve the brand value of your company. Apart from this, there are many such factors that determine the fate of your taxi business such as location, no of cars, and most importantly, your business model.

Client Base

Every person who is in need of a taxi service will belong to your client base. With the help of an online taxi software solutions, you can improve the reach and flexibility of your taxi business. Try to innovate your service by providing lady drivers to female customers to gain more visibility for your services.

Important Tips

  • Don’t expect a high revenue within the initial stages as every business has its own hardship. If you can break even within the first year of service, it means that you are on the right track.
  • If you are able to entertain your existing customers, you will gradually pick up in terms of customer base.
  • Advertising is a key element for the success of every business. The way you market your service determine the growth rate.
  • Online taxi booking services and taxi dispatch app would help you to attract more users to your business. 

As mentioned earlier, this is a mature industry. But still, there are many unexplored areas in online taxi dispatch services. It is important to understand such area and strategize your taxi dispatching software to suit that niche. If you are planning to start an automated taxi dispatch system, this would be the ideal time to enter the market with the best taxi dispatch software and get your revenue generated.

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