Public transit in most Indian cities is inconvenient, with congestion and poor hygiene facilities the most typical issues. Taxis are in high demand because of this. Additionally, with the rise of apps like Ola and Uber, anybody with a smartphone can now hail a cab from the comfort of their own home. Taking advantage of this expanding demand has proven to be a rewarding investment for many taxi business owners. In this article, you will learn stepwise methods to start taxi business in India.
What is the Taxi Business in India?
Typically, there are two sorts of taxi businesses: traditional taxis and radio taxis.
- Individual taxis
- Radio Taxis or Businesses holding a lot of vehicles & consequently conducting taxi business. Currently, many choose to use Radio Taxis rather than regular taxis since they are more convenient to use and more accessible.
Radio taxis have GPS systems so that the taxis can be booked online and the taxi driver’s route can be traced. The taxis can also be tracked. For example, Ola Cabs, Uber, and other app-based services are examples of Radio Taxis.
Detailed Procedure to start taxi business in India
Decide the Business Structure
To start, the corporate strategy of the Taxi business must be worked out. Business structure influences your legal responsibility, documentation, and taxes of the business. You can have company registration from any of the following options to start taxi business in India:
- Private Limited Company Registration
- Public Limited Company Registration
- One Person Company Registration
Financing and Purchasing Cars or Taxis
Budgeting is a primary priority if you wish to start taxi business in India. If you look at the country’s rules and regulations, you’ll see that starting a cab company is difficult if you don’t already have the necessary cars.
A business loan may also be required to fund the acquisition of additional vehicles as part of the growth plan.
Furthermore, When acquiring vehicles for taxi business purposes, one must guarantee that the vehicles are taxi-type and economically viable.
Get Mandatory Registrations and Licenses
- Driving License
Any individual who owns and operates a car must possess a valid driver’s license to demonstrate their ownership and skill to drive a taxi or car.
If the vehicle is being used for business purposes, the individual behind the wheel must hold a commercial driver’s license to demonstrate his right to operate the vehicle.
A driver’s license is granted by a regional transportation authority (RTO) of a certain state, and it is required under the Motor Vehicle Act.
- Registration with Regional Transport Office
Section 39 of the Motor Vehicles Act, 1988 mandates that a vehicle must be registered within seven days after the date of purchase.
Transport authorities offer owners a certificate of registration. Driving an unregistered car is a criminal offense punishable by a fine of Rs.2000/-.
- Fitness Certificate and Insurance
An official certificate of fitness for the vehicle must be obtained before it may be used anywhere in India. Furthermore, Third-party liability insurance should also be purchased for the cars.
In the event of an accident caused by the owner or driver of the vehicle, the third-party riders are protected through insurance.
Similarly, it is also beneficial for you if you additionally insured the cars, since they serve as a source of income for you.
Apply for GST Registration in India
Taxi services are considered taxable services under the GST Act. Furthermore, Taxi aggregators like Uber and Ola are subject to GST when they provide services. Hence, if you start taxi business in India, you must get a GST Registration and do GST Return Filing.
Benefits of GST Registration for Taxi Business
- In the month of purchase, taxi owners are eligible for ITC on their vehicles. After registering for GST, many of these multiple-stage taxes are abolished, and you may be required to pay only one multi-stage, all-inclusive tax, the GST.
- You may effortlessly create e-way bills and e-invoices online.
- GST registration simplifies the process of submitting tax returns since there are fewer taxes and therefore fewer compliances to worry about.
- GST registration can help your organization develop a more effective and efficient logistics system.
Take your Business Online & Do Online Marketing
These days many people book or search for taxi services online. Hence, if you wish to start taxi business in India, you must have an online presence.
Trademark Registration is the best way to protect the branding of your website development and overall brand.
Once completing this, you must choose either SEO or PPC to attract the relevant audience and expand your business effectively.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.