How to start a taxi or cab business in India

Choose the kind of trips you will run

Most small taxi businesses start with one or two kinds of trips, because each kind needs a different car and a different way to find guests. For example, airport transfers are short and frequent, so you need a driver who is ready at odd hours. Outstation trips earn more per booking, but the car and the driver are away for one or more days.

The common kinds of trips are:

• Airport and railway station transfers
• Outstation trips between cities
• Day trips and local sightseeing
• Office travel for companies, on a monthly contract

Pick the trips that fit your city. For example, a town near a hill station gets tourists in season, and a city with large offices gets weekday office travel.

Get the car ready for commercial use

A car that carries paying guests has to be registered as a commercial vehicle, and a commercial car gets a yellow number plate with black letters. You can't use a privately registered car for paid trips, and a private car's insurance won't cover an accident on a paid trip.

First, register the car as a commercial vehicle at your RTO. If you are buying a new car, the dealer can register it for commercial use from the start. Second, buy commercial vehicle insurance for the car. Third, get a fitness certificate from the RTO, because every commercial vehicle needs one and has to renew it on a schedule.

If you don't own a car yet, you can still start. Many operators begin by taking bookings and sending cars that belong to other owners who already have commercial registration, and owners call this attaching a car. You agree on a share of each fare with the owner, and you can buy your own car once bookings are steady.

Apply for the permits

A commercial car needs a permit that says where it may carry guests. For trips inside your state, you apply to your RTO for a contract carriage permit. For trips that cross state lines, you apply for an All India Tourist Permit under the All India Tourist Vehicles (Permit) Rules, 2023, and you can apply for it online. Fees and documents differ by state and by vehicle type, so check the current list with your RTO before you apply.

Hire drivers you can trust

Your drivers need a valid driving licence, and in November 2024 the Supreme Court ruled that a driver with an ordinary car licence (LMV) may drive a transport vehicle under 7,500 kg, which covers sedans, SUVs and most MUVs used as cabs. Some states still have their own rules, so confirm with your RTO what your drivers need. Before a driver's first trip, ask for police verification, and keep a copy of the driver's licence and ID proof on file.

Register the business

You can start as a sole proprietor under your own name, and you can change to a partnership or a company later if the business grows. Many operators also register on the government's Udyam portal, which is free and records you as a small business. Open a current account in the business name too, so that guest payments and fuel costs stay separate from your personal money.

GST registration becomes compulsory once your yearly turnover crosses ₹20 lakh in most states, or ₹10 lakh in some smaller states. Companies that book office travel often ask for a GST invoice from the first trip, so some operators register early. Ask a chartered accountant which GST rate applies to your trips, because the rate depends on whether you claim tax credit on your own costs.

Set your fares before the first booking

Guests compare fares before they book, so write your fares down before you take your first call. Most operators in India price outstation trips per kilometre, with a minimum number of kilometres charged for each day. On top of the kilometre rate, they add a daily allowance for the driver, and they charge tolls, parking and state entry tax at cost. Airport transfers usually have one fixed price for each route, because guests want to know the full fare before they land.

Keep your fares in one place, e.g., a sheet with one row for each car type, so that everyone who answers the phone quotes the same price. PingTab's free cab fare calculator works out one-way, round-trip and hourly fares from your own rates, and it makes a quotation that you can send to the guest on WhatsApp. The free toll calculator shows the toll at every plaza on a route, so you can add tolls to the quote.

Find your first bookings

Most new taxi businesses get their first bookings from people they already know, and then from guests who search online. The common places to find guests are:

• A Google Business Profile, which is a free listing that shows your business on Google Maps when someone nearby searches for a taxi. Ask every guest who was happy with the trip to leave a review.
• Your own website with your fares, so that a guest who finds you online can see a price and book without waiting for a call back.
• Travel agents and hotels, which send their guests to operators they trust.
• Companies near you, which need office travel on weekdays.

Most guests in India will message you on WhatsApp. Reply quickly, and keep each guest's details in one place, so that a booking doesn't get lost in a long chat.

Keep a duty slip and a bill for every trip

Every trip needs a duty slip, which is the sheet the driver carries during the trip. The driver writes the start and end kilometres and times each day, and the guest signs the slip. After the trip, you make the bill from the duty slip, so the kilometres and the extra charges on the bill match what the guest signed.

You can make both for free on pingtab.com without signing up. The duty slip maker gives you a printable duty slip as a PDF. The taxi bill maker gives you a bill as a PDF or a WhatsApp image, with GST, the advance paid, the balance due and a UPI QR code.

Keep the guest informed on the day of the trip

Guests worry most in the hour before pickup, especially at an airport. Send the guest the driver's name, the car and the car number before pickup, so the guest knows which car to look for. A tracking link that shows the car on a map lets the guest see the car arrive without calling you or the driver.

Take bookings direct when calls and notebooks stop being enough

Calls, WhatsApp and a notebook run a taxi business with a few cars, but bookings start to slip as you add cars and drivers. PingTab is a direct booking platform for cab operators, which means guests book with you on your own website, and each guest stays informed until the car arrives. With PingTab you get:

• Your own booking website, where guests see your fares and book.
• One inbox for booking requests from your website and your chats.
• A driver app, where the driver opens the trip and shares the car's location until the trip ends.
• A live tracking link for guests, which opens in the browser and needs no GPS device in the car.

Setup takes about 10 minutes, and the first 7 days are free with no card needed. See how PingTab works, or see the plans.