A business venture is a never ending approach to fill the black hole named startup. You need to give all of yourself to make your business stand out and prosper against competition. But for today let’s skip the motivational side and get into the technical requirements for running a taxi business.

There are many aspects to be considered and even more things required to start a taxi cab company. In this article, we will get into all the taxi business requirements whether they are legal documents, inventory for the company or any other accessories.


There are many frequently asked questions that we have answered in this article like:

  • What is required to start a taxi cab business?
  • How much does it cost to set up a taxi business?
  • How to start an Independent Cab Company?
  • How to Get a Taxi Cab Business License?
  • How to insure your taxi cars
  • What is the cost to build taxi service app
  • How to start a taxi and private hire firm?

Our goal is to inform you about the most important requirements to start a taxi cab business and we will bifurcate all these requirements into 3 general categories:


Inventory will consist of all the physical resources that you would be using in your business. Showing you all the requirements for running a taxi business excluding all the trivial items we would concentrate only on the bigger investments.


The first and foremost requirement for running a taxi business is to own at least one car. To buy a new car would cost you around $15,000 or more according to the company and the make and model of the car. A more affordable option is to go for used cars which fit in your budget. You can get a used car for as low as $3000 but buying the cheapest car will always cost you more in maintenance and repairs, sometimes more than a new car would have cost. So it’s advisable to go for a car in the range of $6000 to $10,000 as per your budget.

Taxi Equipments

The car just as itself will not work as a taxi. You need to accessorize it with taxi top lights, taxi meter, paint or decals with your taxi company logo. The goal is to make your taxi visible in traffic so that potential riders can easily spot your vehicle and call for your service. All these accessories will cost you around $1500 if you are going with the decals instead of paint. Choosing paint over decals will increase this cost substantially higher.

Communication System

Every taxi cab car should be installed with communication systems like radio or cell phone so that the admin/operator can contact and instruct all the drivers about the traffic and guide through the quickest routes. There is an alternate solution to this costly taxi business requirement: Taxi cab service app (we will talk about this later)

Read More: How much does it cost to start a taxi business?


All the administrative paperwork and procedures will be taken into documentation section. These documents are the most important taxi business requirements concerning legal section to start an independent taxi cab company.


A business license is a must, regardless of the city or town you have set up your business in. In larger cities like New York, a “medallion” system is in place to regulate the taxis running in the city. Only a certain number of these medallions are issued every year, giving permission only to the holder of this medallion to operate a taxi service. If you can’t wait your turn you can buy a medallion from existing drivers who are willing to sell and this is completely legal.


Insurance is not mandatory in all of the cities but still, it is advisable to have one for each of your cab cars. These insurances are given by government insurance as well as various private insurance companies.


Just like any other business you need to file taxes for your Independent taxi cab business. Generally, Transportation is not a taxable service, but you need to obtain your Employer Identification Number from the IRS.

Read More: How to Buids a taxi app like uber?


To reach your target people in this digital world you will need a tech bridge; taxi booking app like Uber, Lyft or DiDi.

There are many Top taxi app development companies that specialize in independent taxi cab service app development. A mobile app for your taxi company is a key taxi business requirement in this time and age.

You need to build an app like Uber, Lyft that has 3 separate panels for customers, drivers, and admin. The customer will use this taxi app to book a ride and give their location of pickup and drop off. While the driver will receive the entire ride related information and a ride map which also saves money on radio communication systems. These features make a taxi cab service app an important taxi business requirement that you need to fulfill. If we come to the cost of developing an app for your cab service, it depends on what type of services you are choosing to offer.

Aspects Higher cost Lower cost
App building model Build from scratch Use Uber-like app clone
Features High-end additional features Only basic working features
Company In-country development company Out-sourcing
Platform Native App Hybrid App

These are just basic points to give you an overall idea, to get in-depth information about taxi cab service app building visit here.

Get updates of the latest tech news

Register with your email ID to get the first bite of the most trending news.


This article gives you a complete idea about taxi business requirements. All the questions whether about documentation, inventory or IT, all are answered in this article in a simple and self-explanatory manner.

So, you don’t need to rush to Google for any other information as every data given here is self-sustaining. Also, there are additional links given across the article to the topics which you might be interested in further researching.

Download Ebook
The Complete Guide of How Uber Makes Money

If you are thinking of starting your own taxi business, then building an app is the first and foremost thing to begin with.

Paresh Sagar

Article By

Paresh Sagar

The CEO of Excellent WebWorld and a digital marketing expert. Paresh loves to experiment with new techniques and strategies. The posts written by Paresh are awesome for businesses who are seeking for marketing ideas.