How to Start a Taxi Business in India

How to Start a Taxi Business in India

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How to Start a Taxi Business in India
How to Start a Taxi Business in India

Want to start a taxi business in India? A taxi business is one of the attractive and profitable businesses of the present scenario. So, before starting a taxi business in India, the individual must be well aware of every detail related to the starting of the Taxi business. Here are some factors that are essential in order to start a Taxi Business in India.

How to Start a Taxi Business in India
How to Start a Taxi Business in India
  1. 1. Business Structure– Firstly, the business structure of the Taxi business must be decided. It can be based on sole proprietorship, private limited company, partnership or limited liability partnership model as business structure affects your personal liability, paperwork, taxation of the business etc.
  2. 2. Commercial Driving License– Any person, who owns a vehicle and drives it, must have a Driving license to prove his authorization to use it. In case the vehicle used by the person is for commercial purpose, then the person using it, must have commercial driving license to prove his authorization to drive it. A Driving license is issued by a Regional Transport Authority (RTO) of a particular state, and it is absolutely necessary to have the license, as per the Motor Vehicle Act.

Criteria for obtaining Commercial Driving License

·         Driver must be at least 18 years of age.

·         Driver must be at least educated up to class 8.

·         A learner’s license in necessary.

·         Training from Government Motor School is necessary.

·         The application for the license can be made through both online and offline modes.

·         A driving test is mandatory to access the driver’s skill.

·         A medical fitness certificate of the driver is also necessary.

Documents required for the application of the Commercial Driving License

  • Identity Proof
  • Address Proof
  • Multiple passport size photos
  • Application fee
  1. Obtaining Permit as per the Provisions of the Motor Vehicle Act.
  • Makes Compulsory for the owner of the transport vehicle to obtain a permit from the Regional or State Transport Authority.
  • It mandates a taxi owner to submit an application to the Regional Transport Authority to grant a permit to carry passengers under a contract to a fixed destination within or outside the state.
  • Taxi owners can choose to obtain an All India Permit under which, there is the All India Tourist Permit (AITP). An application must be made to The Transport Authority along with the prescribed legal fee.
  • It is mandatory for every motor vehicle to register his motor vehicle before driving it.
  • It mandates procurement of a fitness certificate for every transport vehicle. The certificate may be issued by an authorized testing station or a prescribed authority after ensuring that the transport vehicle complies with all the requirement of the act.
  • It necessitates insurance of the motor vehicle in use against any third party risk.
  1. Taxation Norms- After the enforcement of GST, the meter taxis will not be liable for GST. If you a cab owner then, 5% GST would be applicable on the passenger fares.
  2. Environmental Regulations- As a taxi business owner, he must be aware of all the norms imposed by the state as well as centre with regard with the Environment. It is very important to run taxis as per the environmental regulations to not run into a legal dilemma.
  3. Finances- Financing the business all on own would be taxing and frustrating tax. Therefore, the company should look forward to take loans from the banks. Nowadays, the banks are taking initiatives to support the upcoming businesses in India.
How to Start a Taxi Business in India
How to Start a Taxi Business in India

Therefore, recently two taxi businesses have profited a lot by their unique of business structure. Ola and Uber are the upcoming taxi businesses that are fulfilling the needs of the people by their varieties of services. So, when all the above factors are taken into consideration, then the taxi business could be started smoothly.


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